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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. 

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