Concern is mounting in the Obama Administration over a growing number of nuclear reactors that are being closed prematurely. For the wrong reasons.
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On Thursday, Dr. Peter Lyons, Assistant Secretary for Nuclear Energy told attendees at the Platts 10th Annual Nuclear Energy Conference that the U.S. Department of Energy is reviewing recent nuclear plant closures, and how they will affect our ability to reduce carbon dioxide emissions to the levels we need (Greenwire).
Even more dire, is the possibility of closing 30 more reactors in the near future solely from “artificial market conditions”.
Referring to the closing of the Kewaunee and Vermont Yankee nuclear plants, Lyons said “This is a trend we are clearly very, very concerned about.”
As well we should be. Without a robust nuclear energy program, and without getting as much energy as possible out of each reactor, America cannot reach its ambitious climate goals. Under the President’s Climate Action Plan unwrapped last June, America would cut present emissions almost 15 percent by 2020.
Since nuclear power provides the majority of low-carbon electricity, with hydroelectric providing most of the rest and wind bringing up the rear, it is impossible to meet these goals if nuclear takes a sucker punch from a concocted market.
Even worse, if new GenIII nuclear plants and small modular reactors do not grow to replace the existing nuclear fleet, carbon emissions will actually begin to rise by 2020. Whether you care about this or not, the accompanying losses of baseload electrical supply, energy security and energy diversity are bad enough by themselves.
The only reason emissions have decreased at all in the last few years is that we’ve replaced dirty coal plants with cleaner natural gas. That’s great, but the fact that gas saves maybe a third, or less, of coal’s carbon emissions only takes you so far (Union of Concerned Scientists).
Although we seem to be betting the farm on gas, few are convinced that gas’s price volatility will subside, or that the supply is as guaranteed as everyone dreams. The depletion behavior for fracked wells is all over the place, so it’s hard to predict just how much gas each well will produce and how stable will be the supply (Businessweek; Forbes – Lee).
Natural gas prices have reach $100/MMBTU in some winter local markets like New England, as would be expected given the huge demand and insufficient pipeline supply to those areas. But the Henry Hub prices have actually doubled this winter (Fossil Fuel Spot Prices), something that hasn’t happened since the fracking explosion began (Hub Historic Prices). I’m afraid this is foreshadowing of price volatility to come.
But the issue with these nuclear power plants is not that they’re not working great. It’s the artificiality of the electricity markets. And Assistant Secretary Lyons, one of the nation’s premier nuclear energy experts, knows that without a price on carbon, and without correctly assigning hydro and nuclear to the clean category, markets will not recognize the value of low-carbon power.
According to Lyons, “When well-run, clean energy sources are forced out of the marketplace due to a combination of reduced demand, low natural gas prices and market structure, our markets are providing the wrong signals” (Greenwire).
This is evident at Exelon Corporation, the nation’s largest utility company and owner of the most nuclear plants (Chicago Tribune). Exelon had revenues of $24.9 billion last year, and even profits were up, so you’d think they’re doing things right. But the company’s nuclear fleet has struggled in their individual profitability because of subsidized renewable generation and low natural gas prices. This puts Exelon’s Clinton and Quad Cities generating stations at risk of closing like two other plants this year.
On the 60th anniversary of Eisenhower’s “Atoms for Peace” speech, the energy industry is looking for some indication of nuclear’s staying power in the construction of the first new nuclear reactors in thirty years (Southern Company). The new plants, being built in Georgia and South Carolina on the sites of existing plants that are being given another 20 years of working life.
This is the model that should be followed at all existing nuclear power sites – replace old GenII plants as they die with new GenIII plants and small modular reactors.
But they shouldn’t be hurried along in that death for no good reason. The worst action you can take with an operating nuclear power plant is to close it prematurely. The plant is paid for, the nuclear waste will still be there, and the D&D will still have to be done. The longer each plant runs, generating power and revenue, the better.
The closing of the Kewaunee and Vermont Yankee nuclear plants is particularly troubling. They each had 20 more years of producing stable, cost-effective electricity. Lyons also noted that the closure of Kewaunee and Vermont Yankee is entirely a failure of the market structure of the United States today. If both these nuclear plants were in South Carolina, with its different market structure, they would be running another 20 years.
Closing these two plants 20 years early will lose over 300 billion kWhrs at a price of about 6 cents/kWhr, will rob the Nuclear Waste Fund of 300 million dollars, and will require installing another two thousand MW of something else to compensate for this loss of nuclear which operates at 90% capacity. Assuming this new capacity is a combination of gas and some renewables, it will cost about 10 cents/kWhr plus new construction costs.
Our energy future appears to be more and more dependent on intangibles like whether or not we as a nation believe in global warming, accept a lot more pipeline construction, or care about energy security and reliability.
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