This will be a bleak Christmas for the small Vermont community of Vernon. It is losing its economic mainstay. The owner of its proud, midsize nuclear plant, which has sustained the community for 42 years, Entergy, is closing the plant. Next year the only people working at the plant will be those shuttering it, taking out its fuel, securing it and beginning the process of turning it into a kind of tomb, a burial place for the hopes of a small town.
What may be a tragedy for Vernon may also be a harbinger of a larger, multilayered tragedy for the United States.
Nuclear – Big Green – is one of the most potent tools we have in our battle to clean the air and arrest or ameliorate climate change over time. I've named it Big Green because that is what it is: Nuclear power plants produce huge quantities of absolutely carbon-free electricity.
But many nuclear plants are in danger of being closed. Next year, for the first time in decades, there will be fewer than 100 making electricity. The principal culprit: cheap natural gas.
In today’s market, nuclear is not always the lowest-cost producer. Electricity was deregulated in much of the country in the 1990s, and today electricity is sold at the lowest cost, unless it is designated as “renewable” — effectively wind and solar, whose use is often mandated by a “renewable portfolio standard,” which varies from state to state.
Nuclear falls into the crevasse, which bedevils so much planning in markets, that favors the short term over the long term.
Today’s nuclear power plants operate with extraordinary efficiency, day in day out for decades, for 60 or more years with license extensions and with outages only for refueling. They were built for a market where long-lived, fixed-cost supplies were rolled in with those of variable cost. Social utility was a factor.
For 20 years nuclear might be the cheapest electricity. Then for another 20 years, coal or some other fuel might win the price war. But that old paradigm is shattered and nuclear, in some markets, is no longer the cheapest fuel — and it may be quite few years before it is again.
Markets are great equalizers, but they're also cruel exterminators. Nuclear power plants need to run full-out all the time. They can’t be revved up for peak load in the afternoon and idled in the night. Nuclear plants make power 24/7.
Nowadays, solar makes power at given times of day and wind, by its very nature, varies in its ability to make power. Natural gas is cheap and for now abundant, and its turbines can follow electric demand. It will probably have a price edge for 20 years until supply tightens. The American Petroleum Institute won't give a calculation of future supply, saying that the supply depends on future technology and government regulation.
Natural gas burns cleaner than coal, and is favored over coal for that reason. But it still pumps greenhouse gases into the atmosphere, though just about half of the assault on the atmosphere of coal.
The fate of nuclear depends on whether the supporters of Big Green can convince politicians that it has enough social value to mitigate its temporary price disadvantage against gas.
China and India are very mindful of the environmental superiority of nuclear. China has 22 power plants operating, 26 under construction, and more about to start construction. If there is validity to the recent agreement between Chinese President Xi Jinping and President Barack Obama, it is because China is worried about its own choking pollution and a fear of climate change on its long coastline, as well as its ever-increasing need for electricity.
Five nuclear power plants, if you count Vermont Yankee, will have closed this year, and five more are under construction in Tennessee, South Carolina and Georgia. After that the new plant pipeline is empty, but the number of plants in danger is growing. Even the mighty Exelon, the largest nuclear operator, is talking about closing three plants, and pessimists say as many as 15 plants could go in the next few years.
I'd note that the decisions now being made on nuclear closures are being made on economic grounds, not any of the controversies that have attended nuclear over the years.
Current and temporary market conditions are dictating environmental and energy policy. Money is more important than climate, for now. — For the Hearst-New York Times Syndicate
George Harvey says
I wish the author would take a look at current data before writing an article of this type. Currently, the power producer with the lowest cost is wind, even without subsidies. According to the US DOE, the average PPA signed in 2013 cost 2.5 cents per kWh – without subsidies, that comes to 4.8 cents.
The price of solar has dropped so far that it is competing successfully against gas. Austin, Texas signed a PPA last winter for 150 MW, and the price of solar, without subsidies, was about the same as combined cycle gas, at 7.2 cents per kWh. Nuclear gave a bid of over 10 cents. There are other examples of the same phenomenon elsewhere and at different times.
Another thing to note is that the cost of backup power for solar and wind has come down. A large (100 MW, 300 MWh) lithium-ion battery system recently outbid gas peaking plants in southern California.
The world of energy is changing. In fact, it is changing so rapidly that you have to be up to date, or you will be wrong.
And by the way. Never take projections from the Energy Information Administration for granted until you have taken a careful look at the track records of their past projections. The projections they have made in four of the last five years for the renewable capacity of the US in the distant future (25 years) were all fulfilled within one year. The single year in which that was not the case, they made a 25-year projection of renewable growth to a capacity that was, according to another group in the DOE, already online.
Bob Wallace says
Yes, existing nuclear plants are being closed for economic reasons. Exelon is close to closing another five or six.
The "free market" will close about 25% of US nuclear reactors unless a price is put on carbon. With more wind and solar coming on line the situation worsens for existing reactors. Wind lowers the off-peak price causing nuclear to build up losses and then solar will knock down the ceiling price during peak hours. (We're seeing that already in Germany.) Nuclear will have less opportunity to recoup its losses.
Coal -> natural gas.
It's not just that NG emits about half as much as coal per MWh produced, it's also important to remember that NG is dispatchable. NG is a good fill-in for wind and solar.
We can replace coal with a mixture of 40% wind, 30% solar and 30% NG and end up emitting about 85% less carbon than burning coal. That is a very major cut in CO2 emissions which we can bring about in the next ten years if we wish.
(Methane leaks have to be controlled.)
Edward Davis says
Llewellyn King's commentary on the quandary U.S. nuclear energy generation finds itself in is right on the mark! The irony is that if China maintains its present course it will have about 100, 000 MWe of nuclear generation capacity around 2030 about the same time the U.S. existing nuclear plant fleet will begin a wave of license retirements which could eliminate over 15 years all but the recently built plants. Such a loss of carbon free generation from nuclear plants is roughly equivalent to 500 million tons of CO2 per year or 20% of the current U.S. CO2 emissions for the power sector. Without a fulsome nuclear energy contribution in the mix worldwide, it will be virtually impossible to reach the target of maintaining a 3.6 degree increase in the earth's global surface temperature which is currently the aspiration of so much effort in the climate debate.
Andrew Dodson says
The failure of Nuclear energy to be cost competitive with Natural Gas has far more to do with the operational costs due to regulatory burden and the costs of fighting the incessant lawyers of the environmental movement than it has to do with swings in the price of fossil fuels. Indeed, the fuel costs of nuclear energy are negligable, so its ALL ABOUT OPERATING COST.
Additionally, baseload energy has been penalized by fiat by many state legislatures, who force utility companies to integrate variable output renewable energy! These subsidies mean that grid operators are incentivised to deploy natural gas turbines, which can quickly vary their output to respond to the swings in output from solar and/or wind power. By forcing these renewable portfolios on our generation fleet, we are destroying the reliability of our electrical grid. This means higher energy costs and more brownouts and blackouts. PERIOD.
Its time to shut down the green menace for good. What kind of idiot country lets lawyers and lobbyists determine what kind of power sources we use? Its time to put some ENGINEERS AND SCIENTISTS back in charge!
When you say that Natural Gas is cheeper than Nuclear, you are saying that Natural gas can produce electricity for less than 2.4 cents / kWh? Where is this please? Nuclear power plants are capable of being ramped up and down – load following, but they are restricted by LAW from doing so, since that would mean that an external controller is controlling the NPP.
The real problem here is the renewable portfolio. When Wind and Solar can sell into the market at negative prices – some of the time, that means that both coal and Nuclear have to PAY to have their electricity on the market. Hum, "NPP you cannot load follow – that is against the law" You see this is actually NOT low priced Natural gas, although The American Petroleum Institute will NOT give an estimate….." Wind and Solar sell natural gas, they are a lost leader for that industry. It is the fact that NPP's are being told by law to pay into the grid that makes them uncompetitive. It is the fact that Wind and Solar are NOT paying for their infrastructure costs that make them competitive. So, I challenge your assertion it is natural gas that competes with Nuclear, it is Legal Subsidies and Laws that prevent competition that hamstring Nuclear.
You make a good sales person for Natural Gas.
Nuclear can compete in a normal market, if allowed to load follow, if allowed to build plants with the same environmental regulations that Natural Gas and Coal enjoy. Natural Gas and Coal are safe enough, but Nuclear power must meet safety standards that are more than 1000 times that of NG and Coal. It is NOT NG but government regulations and laws that hamper Nuclear.
Jim Hopf says
Political opposition (i.e., "controversy") have very much to do why nuclear is struggling, ostensibly on "purely economic grounds."
Such lack of political support is why nuclear receives no credit for it's non-polluting, non-CO2-emitting nature, while (competing) renewable sources get enormous support in the form of heavy subsidies and outright mandates for their use.
It's why nuclear is required to spend enormous sums to reduce even the chance of emitting pollution to negligible levels (essentially, to spend whatever it takes to render it a completely clean enery source) but then is required to compete directly (on raw price) with dirty sources (e.g., coal) that get to routinely pollute the environment for free.
Such political opposition is also the reason why nuclear suffers under an astonishing degree of over-regulation, where it is required to spend thousands of times as much as competing energy generation methods, per unit of public health risk and/or environnental impact reduction.
All of these things have an enormous impact on nuclear's economics. How is it that many decades ago, with less advanced technology and operating experience, nuclear was significantly less expensive than it is today? And yet those plants never had any significant environmental impact (or release). Only (ever increasing) over-regulation can produce such a result.
Bill Rodgers says
"Markets are great equalizers, but they're also cruel exterminators"
However, wind and solar are not competing in a balanced marketplace. Renewable Portfolio Standards require utilities to first purchase available wind and solar thereby creating an artificial market demand. Secondly as already pointed out, cash subsidies paid to industrial wind and solar generators based strictly on Kw generation skew wholesale market prices.
When even hydro generation resources are being priced out of the market as is sometimes happening in the Pacific NW due to negative wholesale prices, then there is a problem in the dynamics of the marketplace. That problem is governmental interference on grid wholesale pricing dynamics.
Sorry for the comment, I just read this article.
The reality is that in Japan and many other "civilized" countries the nuclear "lobby" is so powerfully that they in essence control not only the Government but also what forms of energy are used by the people of that country. I have coined the term "Energy Slavery" as describing how many people are forced to buy their "Energy" from a Utility that does not provide the types of generation that the ratepayers want because it would not benefit the Utilities shareholders as much.
This will become ever more prevalent as Solar (of all flavors) cost continues to decline while Nuclear generation continues to increase in cost. Most new reactors that will be built will result in generating very high cost energy, which local ratepayers will be forced to pay, thanks to agreements being forced upon ratepayers in order to get these same nuclear reactors built. I predict that history will show that the Leaders supporting these BIG reactor projects will themselves be enriched by these ☢ Energy deals, in what I call Profitganda*
Profitganda is the use of phony "feel good" information to sell an idea, product or concept to the masses.