The CEOs and Chairmen of two of the largest utilities in the United States were brought together on stage Friday morning in Southern California at the Wall Street Journal ECO:nomics event. Although there are large differences in where and how they source their respective fuels and feedstocks, when it comes to the subject of nuclear power, clean coal, carbon capture, carbon and government sloth -- they tended to be in violent agreement.
American Electric Power (AEP) gets about 80% of their electricity from coal while FPL gets only 4% of their energy from coal. FPL Group (FPL) is the biggest U.S. producer of wind power, operates in 27 states and generates about $16 billion in annual revenue.
FPL has two large nuclear projects for which they are trying to get licensing. Lewis Hay III, the CEO of FPL, said, "I'm a big fan of nuclear," as is Michael Morris (the CEO of AEP). Hay adds, "The 103 nuclear plants we have in the U.S. are cheap and safe."
FPL is looking to build about 2,400 megawatts of new nuclear power near Miami, FL. But it's a $16 to $18 billion bet and takes $150 million just to process the license with the the Nuclear Regulatory Commission -- with a goal of a 42-month completion.
According to Hay, money from Washington is not enough, "We need some measure of certainty besides loan guarantees." Hay is looking for more certainty from government and the NRC. The AEP CEO urged us to "think of the idiocy of Yucca Mountain -- we've spent $30 billion with $10 billion still in a lock-box."
When polled, 66% of the audience at this conference believes America should build more nuclear plants.
On Carbon Capture and Sequestration (CCS)
AES has drilled a number of two-mile holes in the ground and is experimenting with CCS. However, it's not the technology of CCS that keeps the CEO of AEP awake up at night, but the government. In Michael Morris' view, the technology is there and it's just a matter of making it scalable. AES has looked at two technologies -- an amine process and a chilled ammonia process -- and has chosen to go with the ammonia process with their partners from Alstom.
Morris claims that CCS results in a small efficiency penalty but that 90% of the carbon can be captured from the facility. AES wants to prove that is scalable by 2014 or 2015.
Is there a liability associated with a CO2 storage system? Yes, according to Morris, but it's the same liability with stored propane stored or radioactive waste. If the liability comes from mishandling, it becomes a shareholder issue. But it's insurable, and in the event of disaster, a fissure or a massive escape -- there is insurance for that as well.
The majority of the polled audience believes that coal can be clean.
On Climate Change, Carbon, and American Leadership
Morris of AEP said, "A carbon price would allow us to be better about planning."
According to Hay of FPL, "We all know that the carbon footprint is growing. Whether it's 2 inches or 20 feet of ocean rise -- there is sufficient data to move ahead with this. If we're wrong, all we've done is made the world a better place."
A few years ago it would have been inconceivable to hear a utility CEO utter those words but today it is being spoken regularly.
Morris added, "There is no secret that we are affecting the world. If we don't act, it will be devastating -- it needs to be global and cost-logical. It can't be done for free. America can lead the world if we get this done."