Skip to main content

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 special credit for being carbon-free. In fact, they have not even been included when states establish minimum quotas for clean electricity (although New York and Illinois are considering changing this). As a result, they provide a benefit of global importance, carbon emissions reduction, as well as a reduction in the pollutants that cause smog and other problems. But while the climate benefit is shared globally, other well-intended programs to conserve electricity or to promote renewable energy have skewed local electricity prices. The programs were supposed to cut carbon emissions but they have created the unintended consequence of threatening existing reactors, which produce 62 percent of all U.S. carbon-free electricity.

In competitive markets, the modest extra costs of maintaining a reactor at a time of cheap natural gas and heavy subsidies for wind and solar may fall on the owners, who are facing a collapse in the wholesale price of electricity. In traditionally regulated markets, it falls on the utility and then the rate-paying public. In those places, if cheap natural gas and wind and solar look like a better deal on price in the short term, public service commissions may not be sympathetic to supporting nuclear power.

This is how market downturns can frustrate national and international priorities.

Each reactor that is closed prematurely will not reopen. It also represents an asset that would take many years and billions of dollars to replace. And in most cases, these plants are anchors of the rural communities that host them, employing hundreds of skilled men and women and boosting the local economy and tax rolls.

On Thursday, Secretary of Energy Ernest J. Moniz will highlight the cumulative problem of taking reactors off the grid prematurely.  Other speakers will include: U.S. Rep. Adam Kinzinger, whose district in northeastern Illinois is a center of nuclear power generation, and Senator Cory Booker, of New Jersey, also a supporter of  nuclear power.  So will Rep. Jerry McNerney of California, another champion of nuclear power, and Senator Michael Crapo, of Idaho, whose state is home to a superb nuclear power research lab.

Bill Mohl of Entergy will talk about his company’s painful decision to retire reactors before their time, and an Exelon executive will talk about that company’s precarious reactors in New York and Illinois. William Levis of PSEG will talk about the industry’s Delivering the Nuclear Promise program to improve efficiency and win recognition for the value provided. And, Marv Fertel, chief executive at the Nuclear Energy Institute, will give a broader industry perspective.

Other speakers, including technical experts, state officials and experts on policy and regulation, will discuss what the federal agencies, state governments and the organized power markets can do to avoid a wave of premature nuclear plant retirements that will make it impossible to meet U.S. and international climate change goals, and could jeopardize the reliability of our grid.

As Fertel told Wall Street analysts in February, “every kilowatt-hour of electricity on the grid has a distinct pedigree.  If we don’t identify the attributes, and incorporate them into our decision-making, and value them in our market design and market policies, then companies will stop providing those attributes – and that, of course, is what’s happening.’’  
Nuclear reactors provide carbon abatement, a hedge against future changes in the price of natural gas or other fuels, “always on” reliability, electric grid stability and other benefits. Among the topics on Thursday is how reactor owners should be compensated for those benefits. 

Comments

Popular posts from this blog

An Ohio School Board Is Working to Save Nuclear Plants

Ohio faces a decision soon about its two nuclear reactors, Davis-Besse and Perry, and on Wednesday, neighbors of one of those plants issued a cry for help. The reactors’ problem is that the price of electricity they sell on the high-voltage grid is depressed, mostly because of a surplus of natural gas. And the reactors do not get any revenue for the other benefits they provide. Some of those benefits are regional – emissions-free electricity, reliability with months of fuel on-site, and diversity in case of problems or price spikes with gas or coal, state and federal payroll taxes, and national economic stimulus as the plants buy fuel, supplies and services. Some of the benefits are highly localized, including employment and property taxes. One locality is already feeling the pinch: Oak Harbor on Lake Erie, home to Davis-Besse. The town has a middle school in a building that is 106 years old, and an elementary school from the 1950s, and on May 2 was scheduled to have a referendu

Why Ex-Im Bank Board Nominations Will Turn the Page on a Dysfunctional Chapter in Washington

In our present era of political discord, could Washington agree to support an agency that creates thousands of American jobs by enabling U.S. companies of all sizes to compete in foreign markets? What if that agency generated nearly billions of dollars more in revenue than the cost of its operations and returned that money – $7 billion over the past two decades – to U.S. taxpayers? In fact, that agency, the Export-Import Bank of the United States (Ex-Im Bank), was reauthorized by a large majority of Congress in 2015. To be sure, the matter was not without controversy. A bipartisan House coalition resorted to a rarely-used parliamentary maneuver in order to force a vote. But when Congress voted, Ex-Im Bank won a supermajority in the House and a large majority in the Senate. For almost two years, however, Ex-Im Bank has been unable to function fully because a single Senate committee chairman prevented the confirmation of nominees to its Board of Directors. Without a quorum

NEI Praises Connecticut Action in Support of Nuclear Energy

Earlier this week, Connecticut Gov. Dannel P. Malloy signed SB-1501 into law, legislation that puts nuclear energy on an equal footing with other non-emitting sources of energy in the state’s electricity marketplace. “Gov. Malloy and the state legislature deserve praise for their decision to support Dominion’s Millstone Power Station and the 1,500 Connecticut residents who work there," said NEI President and CEO Maria Korsnick. "By opening the door to Millstone having equal access to auctions open to other non-emitting sources of electricity, the state will help preserve $1.5 billion in economic activity, grid resiliency and reliability, and clean air that all residents of the state can enjoy," Korsnick said. Millstone Power Station Korsnick continued, "Connecticut is the third state to re-balance its electricity marketplace, joining New York and Illinois, which took their own legislative paths to preserving nuclear power plants in 2016. Now attention should