Tuesday, February 12, 2013

“The Nuclear Option is Still There”

MidAmerican-Energy-Logo_mw6gPThis comment makes sense only if Crystal River’s closing can be seen to have wider application:

Despite increasing demand for carbon-free power generation, the future of nuclear plants is clouded by the abundance of domestic natural gas, which has led many utilities to embrace that fuel for power generators. That has eased the pressure on operators to keep nuclear plants open, especially if there are questions about their safety.

“There is more of a feeling that because you have very low natural gas prices, there is another alternative out there,” Mr. Dean said.

“This has eased the pressure on operators to keep nuclear plants open.” Pressure? If there are questions about their safety? Mr. Dean is John Dean, president of JD Energy, an energy and environmental forecasting firm based in Frederick, Md.

In this instance, the main reason Mr. Dean can say this is because Duke’s plan to close Crystal River provides a basis for saying it. As we explained a couple of days ago, it’s awkward to use Crystal River for this purpose. One particular closing doesn’t portend anything in itself unless it really is the leading edge of a trend – which Crystal River does not seem likely to be.

The Times’ Jon Hurdle tries a different version of this approach and has greater success with it. That’s because he casts his net wider and does not let Dean become the sole voice of authority.

The 2011 accident at Japan’s Fukushima Daiichi plant has led to more stringent safety testing at nuclear plants in the United States under changes adopted by the Nuclear Regulatory Commission. “It increased the level of scrutiny,” said Dave McIntyre, a commission spokesman.

This is unassailably true. But it doesn’t close the circle – the facilities passed their post-Fukushima stress tests and are currently working through a list of additional NRC safety measures. That counts for something.

---

And to be honest, the Times’ post isn’t trying to make hay out of Crystal River – it’s exploring a topic, not trend hunting. Facilities have closed for various reasons over the years. That’s one thing. These days, natural gas is the “natural” way to replace a nuclear facility closing during the tens. That’s another. It says something about the economics of energy today – so does the downturn that began in 2007 and so does the drop in electricity use that accompanied it. This is not a permanent state of affairs (though sometimes it may feel like it is.)

There are countervailing forces, too, with utilities taking different views based on the market forces they consider important. Take, for example, energy security, which is enhanced by maintaining a diverse portfolio.

“I’m agnostic on the fuel issue,” Fehrman said. “But what we need is a diverse mix. It’s not a good idea to put too many eggs in one basket.”

Fehrman is MidAmerican President William Fehrman. He goes on to say:

“We may propose nuclear at one of the sites or we may propose natural gas,” he said.

The article in the Des Moines Register points out that the trend is to natural gas, so what the heck is up with MidAmerican that it wants to consider new nuclear?

First, the natural gas angle:

Fehrman has been less eager to turn to natural gas. His reasoning: Natural gas looks good now when it sells for less than $3.50 per thousand cubic feet. But five years ago, gas sold for $10 per thousand cubic feet, and Fehrman said he has been unable to persuade natural gas companies to offer him long-term contracts.

Which would seem to mean that natural gas companies are not sure enough yet of the future to ensure they’ll make money under such contracts. Fair enough.

And nuclear:

“The nuclear option is still there,” said MidAmerican President William Fehrman, who said the Des Moines-based utility will add more color to its future generating plans in a report to the Iowa Utilities Board this summer.

All right, I admit that doesn’t sound incredibly enthusiastic, but MidAmerican needs the Iowa legislature to go along with a CWIP plan – which would allow the company to add a small upcharge to ratepayers to keep interest rates for the nuclear facility low - so far, no go. I cannot predict that MidAmerican will try again in the next session – but it may. Stay tuned.

The conclusion here is that one writes off nuclear energy at one’s own peril. The world isn’t participating in such a write-off and really, neither is the United States. You could argue, as the Times does, that nuclear energy is being scrutinized more closely on economic and even philosophical grounds. That’s something, but not the same as looking for excuses to write it off, whatever the future of natural gas and whatever the disposition of Crystal River.

---

Then again, from Power Engineering Magazine:

Is Crystal River a harbinger of nuclear power's future?

No. Clear enough?

Note: Thanks to friend Steve Skutnick for noting my replacement of CWIP with WIPP. One’s a concept, the other a place and don’t have much to do with each other. We could probably find a joke here, but it would probably be pretty saucy. Too many WIP’Ps.

1 comment:

Steve Skutnik said...

Mark - did you mean a CWIP (Construction Work in Progress), rather than WIPP (i.e., the Waste Isolation Pilot Plant?)