A couple of recently released reports offer some hope for the future of nuclear power plants operating on the fringe of profitability.
Moody’s Investors Service suggests that the U.S. Environmental Protection Agency’s (EPA’s) Clean Power Plan “could increase the value of nuclear power as a non-carbon emitting generation source.” In its report, “Environmental Mandates and Regulatory Incentives Could Slow Pace of Nuclear Plant Closures,” released on Nov. 10, the company says “the proposed EPA carbon rules, depending on their final form and the timing of their implementation, have the potential to improve the viability of some at-risk nuclear plants by adding an environmental compliance component to what has been largely an economic debate.”
A separate report issued earlier this month by the North American Electric Reliability Corp. (NERC) notes that “Building Block 3,” which describes the EPA’s method to reduce CO2 emissions by investing in zero-CO2-emitting energy sources (such as nuclear and non-hydro renewable generation), anticipates the preservation of at-risk nuclear plants. By including at-risk generation in its state-by-state CO2 emission rate goal calculations, pressure has been added on states to keep nuclear plants operating, even if they are marginally viable economically.
Several nuclear plants are rumored to be struggling. The U.S.’s largest nuclear plant operator, Exelon Corp., has already announced the planned 2019-retirement of its oldest and smallest unit, the Oyster Creek Generating Station in New Jersey. Moody’s lists five other Exelon facilities—the Byron, Clinton, Ginna, Quad Cities, and Three Mile Island plants—as being “at risk of retirement.”
Entergy Corp., which also operates a large nuclear fleet, will retire its Vermont Yankee plant this year at the end of its current fuel cycle, and has three other plants on Moody’s list. Fitzpatrick and Pilgrim are considered most vulnerable to permanent shutdown because they are single-unit plants that operate in difficult markets. Indian Point—the other Entergy plant fingered—is located closer to New York City, and at 2,069 MW, it has economies of scale on its side.
FirstEnergy Corp.’s Davis-Besse plant is last on Moody’s at-risk list. The report says that the facility, which is located near the Marcellus shale gas region, must compete with plants using readily available, low-cost natural gas. In an attempt to increase operating margins, FirstEnergy has requested that regulators allow passing through some additional costs to ratepayers that could help keep the Ohio plant profitable, but there are other potential problems too.
On Nov. 12, the U.S. Nuclear Regulatory Commission will hold oral argument pre-hearings focusing on an environmental coalition’s contention that Davis-Besse’s concrete containment is cracking and that the structural integrity of the shield building is questionable. The plant’s license is currently set to expire on April 22, 2017, but it is seeking a 20-year extension, which environmental groups—including Beyond Nuclear, Citizens Environment Alliance of Southwestern Ontario, Don’t Waste Michigan, and the Green Party of Ohio—are challenging.
According to the NERC reliability assessment, closure of any currently operating nuclear plant would make it much harder for the state in which the plant is located to meet its proposed carbon emissions reduction goal. It says, “For these states, more CO2 reductions from other measures than originally estimated by the EPA may be required.”
—Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)