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U.S. regulators moved a step closer on Thursday toward clearing the country's first nuclear reactors since the Three Mile Island accident in 1979, even as the industry struggles against plunging natural gas prices and safety fears after Japan's Fukushima disaster.

 

The U.S. Nuclear Regulatory Commission said it had approved the latest version of Westinghouse Electric's AP1000 reactor.

 

The commission must next decide on applications by U.S. power companies Southern Co and Scana Corp to build AP1000s in the U.S. Southeast. Both firms have started limited construction on the units, which would be the first reactors built in the United States in more than 30 years.

 

The Obama administration has painted the resurgence of nuclear power as an important step toward cutting U.S. dependence on greenhouse-gas-emitting power sources such as coal.

 

However, public and political opposition over the AP1000 design and nuclear power in general has swelled following the accident at the Fukushima nuclear plant in Japan that resulted from a massive earthquake and tsunami in March.

 

But the NRC has for the most part kept fairly close to its schedule to approve the latest version of the AP1000 as a safer alternative to existing plants, and the industry remains optimistic that construction approval will come soon.

 

"The process has probably taken a little longer than we hoped but that is OK," Scott Shaw, a spokesman for Westinghouse, owned by Japan's Toshiba Corp, said earlier in the week.

 

"The NRC has to make sure everything works. We are still on schedule for Southern to get a COL (combined construction and operating license) in time to get the first reactor built by 2016," Shaw said.

 

Westinghouse has said the AP1000 would have withstood the Fukushima earthquake and tsunami due to its passive safety features that would cool the reactor after an accident without the need for human intervention, AC power or pumps.

 

The NRC said it found good cause to follow a proposal by Southern to make the rule certifying the AP1000 immediately effective once it is published in the Federal Register, which is expected within seven business days. NRC rules normally become effective 30 days after publication, and the certification will be valid for 15 years, the commission said.

 

The NRC certified an earlier version of the AP1000 in 2006. Westinghouse submitted an amendment request to the NRC in 2007 and later revised that request to comply with the agency's aircraft-impact rule issued in 2009.

 

Gas competition

In addition to environmental hurdles, the U.S. nuclear renaissance faces stiff competition from rising production of cheap natural gas now flooding the market as development of shale fields sweeps across the country.

 

U.S. natural gas prices have plunged to near $3 per million British thermal units this week, half of the 2010 peaks, as the healthy cushion built by higher output helped counter seasonal winter gains.

 

Without new rules to limit carbon emissions that would curb natural gas use, the economics of nuclear fuel face a tough competitor.

 

A 1,000-megawatt natural gas plant takes just a few years to develop and build and costs up to $1 billion for the most efficient, combined-cycle model. A similar-sized nuclear reactor could take more than five years to develop and build and would cost over $5 billion.

 

Southern and partners are spending about $14 billion to build two reactors at the Vogtle nuclear plant in Georgia, with the first new unit expected to enter service in 2016 and the second in 2017.

 

Scana and partners are investing about $9.8 billion to build two reactors at the Summer nuclear plant in South Carolina. Those new units are expected to enter service in 2016 and 2019.

 

Southern and Scana expect the NRC to approve licenses for their proposed reactors within a month or two of certifying the AP1000 design.

 

Separately, the Tennessee Valley Authority (TVA), a federal power agency, is completing the construction of a reactor at the Watts Bar plant in Tennessee and another at the Bellefonte plant in Alabama. TVA started building the units before the Three Mile Island accident but stopped work in the 1980s.

 

Among U.S. utilities, the 1,100-MW AP1000 is the most popular of the proposed new reactor designs the NRC is evaluating, accounting for 16 of the 37 proposed new reactors in the United States, according to the NRC website.

 

(Reporting By Scott DiSavino in New York; Additional reporting by Roberta Rampton in Washington; Editing by Matthew Robinson and Dale Hudson)

 

Copyright 2011  Reuters Environmental Online Report