Skip to main content

Why Nuclear Energy is Critical to American Energy Diversity

Entergy's Bill Mohl
Earlier today, William (Bill) Mohl, President, Energy Wholesale Commodities, Entergy Corporation, testified before the U.S. House Energy and Commerce Committee's Subcommittee on Energy and Power. His testimony was concerned with why it was important for the nation to maintain a diverse portfolio of energy sources. We've excerpted a couple of passages from the speech below (bold emphasis mine):
Another way of looking at the economic value of existing U.S. nuclear generation is to consider the potential cost of replacing it. Based on data publicly available from the U.S. Energy Information Administration, Entergy has calculated that building gas-fired Combined-Cycle Gas Turbine (CCGT) plants to replace the approximately 101,000 megawatts of capacity provided by U.S. nuclear plants would cost between $100 and $110 billion dollars. An investment of this magnitude to replace an existing asset class would be enormous for the U.S. power industry. To provide some perspective, in 2011 U.S. investor-owned utilities (including stand-alone transmission companies) invested slightly more than $30 billion aggregate in transmission and distribution facilities – well under one-third of the low end of the range of the estimated cost that would be required to replace nuclear generation with CCGT plants. Moreover, the $100 billion to $110 billion replacement cost estimate does not include any costs of expanding pipeline capacity to serve new gas-fired plants. The adequacy of pipeline capacity is a key consideration, as was recently demonstrated in New England.

Nuclear power is a crucial contributor to maintaining America’s air quality. Nuclear generation produces virtually no carbon emissions. Since 1995, U.S. nuclear plants have prevented the release of more than 11 billion metric tons of carbon dioxide into the atmosphere. Renewable energy sources can contribute to environmental sustainability, and should be considered for inclusion in a generation portfolio, taking account of emissions, cost, operating characteristics, land use, and other factors. Clean-coal technology shows promise but is not yet as cost-effective as existing nuclear as a source of baseload power. As reliable sources of baseload generation, nuclear plants provide a foundation in the power supply portfolio to support emerging wind and solar power projects, which are characterized by intermittent availability.
A few weeks ago, NEI's Richard Myers took note of some local market conditions in New England that clearly contradicted the conventional wisdom that American is awash in cheap natural gas, a topic that Energy's Bill Mohl also touched on this morning:
Bill Mohl testifies before the Energy and Power Subcommittee.
Earlier in my testimony I noted that nuclear and coal traditionally were the primary fuels used to provide baseload power in the United States. Over the last ten years, improvements in power plant technology coupled with recent low gas prices have created the opportunity to operate CCGTs as baseload units as well. While there are benefits to being able to operate CCGTs as baseload, diversification is a prudent strategy for a generation portfolio, just as it is for an investment portfolio. Sound utility resource planning practices suggest that “you don’t want to put all your eggs in one basket.” In addition to its other benefits, nuclear generation provides a valuable hedge for electric consumers against potential gas price volatility.

Aside from price concerns, there are also challenges presented by the existing pipeline infrastructure and its ability to meet rising demand, particularly in certain regions of the country such as New England.
Again, as our own Richard Myers mentioned, the spot price of natural gas in the Northeast at the end of January was anything but cheap:

Mohl continued:
Consider that replacing all U.S. nuclear units with gas-fired generation would require an additional 14.5 billion cubic feet per day of additional gas supply, a 70% increase over the 20.8 billion cubic feet per day of gas that electric generators used in 2011. Natural gas fired generators do not have on-site fuel inventory and must be continuously supplied through a pipeline system, and while some facilities may have access to gas storage facilities to ensure continuous supply, many facilities do not. Supply issues can arise during peak times, when pipeline capacity is needed to satisfy the demands of local gas distribution companies to serve homes and businesses, in addition to the needs of power plants that may not have contracts for firm delivery. By contrast, nuclear plants have up to eighteen months of fuel supply on site and do not compete with residential and business consumers for fuel, making nuclear plants far less likely to be affected by fuel supply interruptions.


In summary, every source of energy has advantages and disadvantages. We know this to be true in transportation, home heating and also with electricity. Each generation source varies in terms of cost, economic and environmental impact, and other factors that complement and may be weighed against each other. Generation diversity is simply necessary to ensure a reliable and secure generation portfolio for the nation.
Plenty of interesting facts to keep in mind. We'll share a link to the full text of the testimony once it's posted to the NEI website.

UPDATE: The complete video archive of the hearing has been posted to YouTube:

Finally, click here for a complete transcript of today's testimony.


jimwg said…
What gets to me is the relative silence from environmentalists and so-sympathetic media on the Greenhouse Gases since Fukushima. Before Fukushima you just couldn't get enough ominous TV spots and movies playing up the issue but now there're comparatively crickets. Let me take a wild shot that I sincerely believe in, being that ironically, Fukushima's minimal property damage and no loss of life after severe damage by a rare tsunami/massive earthquake -- with three crippled reactor chances for Doomsday to happen -- busted the main mega-death nightmare scenario anti-nukers and environmentalists had in their FUD quiver. I think nations on the nuclear sidelines were actually impressed by Fukushima's low-damage/injury aftermath to start or resume their reactor programs like China and Vietnam and Brazil and the Baltic states. Could it be that (anti-nuke) environmentalists are so quiet about knocking natural gas now is because their hated nuclear is now a proven safer "greener" alternative?

James Greenidge
Queens NY
Harold Gretzky said…
Fracking is so lucrativethat it is almost an irresistable force. However, the environemental consequences of fracking are not well understood. The chemicals are shrouded under a veil of industrial trade secrecy. The waste water picks up radioactivity from deep underground such that it is sometimes 300 times the "free release limit". Thefore, the long term prospects may not be completely rosey.

Harold Gretzky
Bridgman, MI

Popular posts from this blog

Knowing What You’ve Got Before It’s Gone in Nuclear Energy

The following is a guest post from Matt Wald, senior director of policy analysis and strategic planning at NEI. Follow Matt on Twitter at @MattLWald.

Nuclear energy is by far the largest source of carbon prevention in the United States, but this is a rough time to be in the business of selling electricity due to cheap natural gas and a flood of subsidized renewable energy. Some nuclear plants have closed prematurely, and others likely will follow.
In recent weeks, Exelon and the Omaha Public Power District said that they might close the Clinton, Quad Cities and Fort Calhoun nuclear reactors. As Joni Mitchell’s famous song says, “Don’t it always seem to go that you don’t what you’ve got ‘til it’s gone.”
More than 100 energy and policy experts will gather in a U.S. Senate meeting room on May 19 to talk about how to improve the viability of existing nuclear plants. The event will be webcast, and a link will be available here.
Unlike other energy sources, nuclear power plants get no specia…

Making Clouds for a Living

Donell Banks works at Southern Nuclear’s Plant Vogtle units 3 and 4 as a shift supervisor in Operations, but is in the process of transitioning to his newly appointed role as the daily work controls manager. He has been in the nuclear energy industry for about 11 years.

I love what I do because I have the unique opportunity to help shape the direction and influence the culture for the future of nuclear power in the United States. Every single day presents a new challenge, but I wouldn't have it any other way. As a shift supervisor, I was primarily responsible for managing the development of procedures and programs to support operation of the first new nuclear units in the United States in more than 30 years. As the daily work controls manager, I will be responsible for oversight of the execution and scheduling of daily work to ensure organizational readiness to operate the new units.

I envision a nuclear energy industry that leverages the technology of today to improve efficiency…

Nuclear: Energy for All Political Seasons

The electoral college will soon confirm a surprise election result, Donald Trump. However, in the electricity world, there are fewer surprises – physics and economics will continue to apply, and Republicans and Democrats are going to find a lot to like about nuclear energy over the next four years.

In a Trump administration, the carbon conversation is going to be less prominent. But the nuclear value proposition is still there. We bring steady jobs to rural areas, including in the Rust Belt, which put Donald Trump in office. Nuclear plants keep the surrounding communities vibrant.

We hold down electricity costs for the whole economy. We provide energy diversity, reducing the risk of disruption. We are a critical part of America’s industrial infrastructure, and the importance of infrastructure is something that President-Elect Trump has stressed.

One of our infrastructure challenges is natural gas pipelines, which have gotten more congested as extremely low gas prices have pulled m…