Concern is mounting in the Obama administration over a growing number of nuclear reactors that are being closed prematurely — for the wrong reasons.
Recently, 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.
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 this year, 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 Generation III nuclear plants and small modular reactors are not deployed to replace the existing nuclear fleet, carbon emissions will actually begin to rise by 2020.
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Whether you care about carbon emissions 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, and there’s been a major recession. That’s great, but the fact that gas saves maybe a third, or less, of coal’s carbon emissions only takes you so far, according to the 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 the supply actually is.
Natural gas prices have reached $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 prices on the Henry Hub (a distribution hub on the natural gas pipeline system in Louisiana) have actually doubled this winter, something that hasn’t happened since the fracking explosion began. I’m concerned this is foreshadowing of price volatility to come.
Kewaunee nuclear power plant, a healthy nuclear plant, closed because of the failure of the present electricity market structure in the United States. This threatens America’s ability to achieve any of its carbon emission goals.
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But the issue with these nuclear power plants is not that they aren’t performing better than expected — indeed, they are. 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.”
This is evident at Exelon Corporation, the nation’s largest utility company and owner of the most nuclear plants. 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 with their individual profitability because of subsidized wind and solar generation and low natural-gas prices. This puts Exelon’s Clinton and Quad Cities nuclear generating stations at risk of closing like the closings of the Kewaunee and Vermont Yankee plants this year.
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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 30 years. The new plants are 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 Generation II plants as they die with new Gen III 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 decontamination and decommissioning will still have to be done. The longer each plant runs, generating power and revenue, the better.
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The closing of the Kewaunee and Vermont Yankee nuclear plants is particularly troubling. They each had the possibility of 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 still be running as planned.
Closing these two plants 20 years early will lose over 200 billion kWhrs at a price of about 6 cents/kWhr. It will also rob the Nuclear Waste Fund of $200 million.
To produce the replacement electricity over 20 years will require another power source to compensate for this loss of nuclear, which operates at 90 percent capacity. Assuming this new capacity is a combination of gas and wind, it will cost about 10 cents/kWhr plus new construction costs that would not be needed with the existing nuclear plants.
Our energy future appears to be more and more dependent on intangibles, like whether we as a nation care about the effects of climate change, whether we accept a lot more pipeline construction, or whether we care about energy security and reliability.
Having a robust nuclear fleet, along with every other modern generating technology, are tangibles we need for a cleaner future.