Making the Case for Keeping Nuclear Power Plants Open

Earlier this year, electric utility FirstEnergy announced that it would close three nuclear power plants—Beaver Valley in Pennsylvania, Davis-Besse and Perry nuclear plants in Ohio—by 2021.

According to an analysis done by the research firm Brattle Group, the retirement of these three nuclear plants along with that of the Three Mile Island nuclear plant in 2019 would lead to a loss of zero-carbon energy greater than the total amount of renewable generation in the entire PJM region, reversing the emissions benefits of 25 years of renewable investments. All four of these nuclear plants operate within the PJM Interconnection, a mid-Atlantic energy market serving 65 million customers and with 177 gigawatts (GW) of generating capacity.

Existing U.S. nuclear power plants are operating under increasing competitive market conditions as a result of cheap natural gas prices, increasing electricity generation from renewable energy sources such as wind and solar, and limited growth in electric power demand. Currently, there are 60 nuclear power plants operating in the country with a combined electricity generating capacity of 99 GW. Nine plants with a combined 11 GW of capacity have announced plans to retire by 2025.

The dire situation facing nuclear power plants in U.S. markets has led to a considerable debate on the merits of keeping nuclear plants open. Last year, the Trump administration, lumping coal and nuclear together, made the argument that “baseload” plants provide grid resilience and should be compensated for that. The Department of Energy claimed that providing cost recovery to power plants with at least 90 days supply of fuel on hand was needed to prevent immediate dangers to grid resiliency caused by the rising number of retiring coal and nuclear power plants. 

DOE’s proposal was met with significant criticism, in the process uniting organizations as diverse as the natural gas industry, renewable energy groups, consumer groups, states, and congressional members. In January 2018, the Federal Energy Regulatory Commission (FERC) rejected the DOE’s coal and nuclear energy market bailout plan on the grounds that there is no compelling evidence that retiring coal and nuclear power plants represent an existential threat to grid reliability and resilience.  

The issue of what to do about the current crop of operating nuclear power plants still remains though.

The fact that the currently operating nuclear power plants supply one-fifth of the country’s electricity (and 50 percent of its carbon-free electricity) without producing any greenhouse gas emissions is a reasonable justification for figuring out ways to keep them open. For those of us who see emissions reduction as the most pressing challenge facing the energy system in the next two to three decades, keeping the country’s current portfolio of nuclear power plants running is reason enough to come out in favor of nuclear energy. 

Arguments have been made that nuclear power can be replaced with energy efficiency and renewable energy, which are all safer alternatives. Amory Lovins, the anti-nuclear Rocky Mountain Institute co-founder, has argued that reinvesting nuclear plants’ avoided operating costs into energy efficiency measures can significantly cut carbon emissions for the same money.  

However, the evidence till date has shown that when nuclear reactors retire, coal and natural gas have filled the void in most cases, causing emissions to increase. Analysis by the Energy Information Administration has shown that when nuclear plants have retired, utilities replaced the lost nuclear capacity by burning more coal or natural gas. A 2015 study by two economists, Lucas Davis of the University of California-Berkeley and Catherine Hausman of the University of Michigan, found that electricity generating costs rose by $350 million during the year following the 2012 closure of the San Onofre nuclear plant in California, while carbon emissions rose by 9 million metric tons (equivalent to putting 2 million additional cars on the road).

 

The think tank Third Way has published a new analysis looking at the effect of planned and potential nuclear plant closures on carbon emissions in the U.S. power sector. The analysis evaluated three different scenarios: (1) Optimistic case where all reactors currently operating remain online for 60 years, having received 20-year license extensions beyond their initial 40-year lifetime. This scenario maintains all reactors through 2025; (2) Middle case where all reactors shut down after their 40-year lifetime. This leaves 40 reactors in 2025 and only a handful by 2035; (3) Worst case scenario with a complete phase-out of nuclear power. This would leave no reactors left operating by 2025. Each of these scenarios assumed that renewable would double from their current generation and that all states would fully comply with existing renewable portfolio standard (RPS) requirements. The main takeaways from the Third Way study are natural gas predominantly replaces the nuclear power plants when they go offline and under the current policies, renewables cannot keep up to replace the lost nuclear power, a finding that is consistent with recent real-world experience. 

Without nuclear power, the goal of reducing carbon emissions would become very hard for states to achieve. Fortunately, a few states have begun exploring solutions to keep nuclear as part of their electricity generation portfolio. New York became the first state to implement a program of zero emissions credits (ZECs) to keep its nuclear plants running. New York also has a Clean Energy Standard (CES) that requires that 50 percent of the state’s electricity come from renewable energy sources by 2030. Illinois followed suit in 2016 when it passed the Future Energy Jobs Act to implement a ZEC program to help save some of its nuclear plants and beef up its renewable energy and energy efficiency standards. New Jersey has become the latest state to establish a ZEC program to maintain its nuclear energy supply, which contributes close to 40 percent of the state’s electric capacity and is by far the largest source of carbon free energy. 

Finding ways to generate power cleanly, affordably, and reliably has become a pressing imperative to rein in carbon emissions. While nuclear energy is not a silver bullet, it can be one among several strategies that states adopt to reduce carbon emissions, including replacing coal power plants with cleaner natural gas plants and investing in renewable energy and other technologies such as storage and carbon capture and sequestration.

 

 

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