The decision to not go forward with the V.C. Summer nuclear plant because of cost overruns and construction delays shows the 1960s dream of “too cheap to meter” nuclear-generated electricity is more like a financial nightmare today.
Policy specialists say significant new nuclear generation is unlikely for a decade or more. Many also agree existing nuclear plants should not be replaced by natural gas plants. They split, though, on crucial questions about nuclear power's future, such as whether existing plants should get subsidies like zero emission credits or be replaced, when they should be replaced, and what they should be replaced with.
A report from Mark Cooper, senior research fellow at the Vermont Law School Energy and Environment Institute, was part of the proceeding that led to the decision by SCANA Corp and Santee Cooper in South Carolina to stop work on the Summer facility.
“Summer was 100% excess capacity for those utilities,” he told Utility Dive in an interview. “If they need new generation, the best approach is buying the smallest increments at the lowest price, and that’s efficiency, wind, and solar. The capital cost of renewables is between 12% and 25% of what Summer was costing.”
The Summer decision bolstered the economic argument against nuclear. Newer to the debate is the controversial question of nuclear’s role in the climate fight.
The MIT Energy Institute’s Jesse Jenkins, co-author of a recent review of research on deep decarbonization in the power sector, said nuclear is too important a source of emissions-free electricity to abandon.
“Using renewables to replace nuclear represents an opportunity cost because we are not using those emissions-free MWh to replace fossil fuels,” he argued. “We have very little time to waste and, at best, replacing nuclear with renewables is running in place.”
Center for Energy Efficiency and Renewable Technologies (CEERT) Executive Director V. John White said neither national policy nor ideology should determine nuclear’s future. “It is a regional question.”
But the aging U.S. nuclear fleet is an increasing safety risk and "it is not prudent to keep reactors in service just because we aren’t sure how to replace them,” White said. “It is a plant by plant decision and a matter of economics, public safety and available resources.”
Utilities and the need for nuclear
Cooper said Summer’s fate foreshadows the future of the only remaining U.S. nuclear project under construction, Georgia Power’s 2,430 MW Vogtle facility. It is now seven years behind schedule and projected to cost at least twice its original estimate.
“Our schedule, cost-to-complete, and cancellation assessments for the Vogtle expansion remain underway,” Georgia Power spokesperson John Kraft reported. “We expect to complete them and file with the Georgia Public Service Commission by the end of the month.”
That will begin a consultation process with regulators “to determine the best path for customers,” Kraft added.
Arizona Public Service (APS) has no plans to replace its 3,942 MW Palo Verde facility, said spokesperson James McDonald. The 2017 APS Integrated Resource Plan reports continued operation of Palo Verde “will anchor APS’s energy mix.”
Florida Power and Light (FPL) has two nuclear plants and NextEra Energy, its parent company, has three others. FPL continues to pursue licenses and approvals for two new nuclear units, said spokesperson Peter Robbins. “But that is all we are doing.”
FPL “recognizes that building nuclear is extremely complex with a lengthy construction period,” Robbins said. “The Summer decision had no impact on our efforts but we are watching it and the Vogtle project closely and seeing valuable lessons.”
Market forces have changed for nuclear but “the economics are only one piece,” Robbins said. “They are emissions-free, reliable power with stable fuel costs and they have been helping keep customer bills low for decades.”
There have been closures or planned closures of 14 reactors at 11 plants since 2012. Dominion Energy’s 556-MW Kewaunee plant was the first.
Dominion “was not able to acquire additional nuclear units in the region that would have lowered operating costs through economies of scale,” said nuclear fleet communications manager Richard Zuercher.
Dominion shuttered the facility after the Midwest Independent Transmission System Operator concluded the remaining resource mix would sustain reliability.
Duke Energy took the 860 MW Crystal River nuclear facility offline in 2009 for maintenance and found it unsafe to restart.
“We need approximately 2,200 megawatts of generation by 2018,” Duke Energy spokesperson Heather Danenhower emailed Utility Dive. The utility decided the $1.5 billion 1,640-megawatt “highly efficient” combined-cycle natural gas plant is its most cost-effective replacement option,” Danenhower said. The utility expects to have the entire capacity online by the end of 2018.
Omaha Public Power District (OPPD) shuttered its 476 MW Fort Calhoun facility at the end of 2016. The utility needs to replace only “about 40%” of its capacity, according to spokesperson Jodi M. Baker. OPPD is “acquiring replacement energy from incremental wind generation” and will supplement that through the Southwest Power Pool electricity market.
Subsidies for nuclear, renewables
MIT’s Jenkins said the “economic headwinds” that ended the Summer project and forced other closures threaten “a substantial fraction of the U.S. nuclear fleet, “which accounts for only 19% of our electricity but over 60% of our low carbon electricity.”
Jenkins supports the current renewables expansion but suggested a thought exercise. If the 6% to 7% of U.S. electricity now coming from wind was tripled, it could replace the entire nuclear fleet. “But that would mean that all of the wind capacity built to date was used to produce exactly zero reductions in emissions,” he said. “That puts it in pretty stark terms.”
Public policy is needed to change this, Jenkins said. States like Illinois and New York recognize the importance of existing nuclear plants by offering zero emission credits (ZECs) to subsidize nuclear, just as renewable energy credits (RECs) support renewables.
“For most nuclear plants, that is cheaper per MWh than subsidizing renewables to replace them,” Jenkins said, citing New York’s $17/MWh ZEC price versus its $25/MWh to $35/MWh REC prices.
The use of ZECs as a subsidy was only recently initiated in New York and Illinois. It may not be a workable solution where there is political opposition to subsidies.
Jenkins expects the “vast majority” of U.S. nuclear plants to be retired by 2040. Many of them, built before 1980, will be aged out of service and more will be forced out by ongoing economic pressure.
“We will continue to scale up wind and solar,” he said. “We will also replace coal with natural gas capacity and retire the nuclear fleet, which will impede the progress from building wind and solar.”
Jenkins said expecting “the transformational growth of renewables” to provide 100% of the nation’s emissions-free generation “would be unprecedented and would be the wrong way to interpret the trends in the marketplace.”
He does not mean to argue that nuclear is a superior or essential resource because it is not productive to “pit low carbon technologies against each other,” Jenkins said. “Nuclear has useful characteristics for a low carbon power system and the menu of options that fill that role is limited.”
Following the money
Cooper said there is no need for nuclear. It is the most expensive way to reduce carbon and “that is a mistake because the more you pay, the less you’re likely to buy," he said.
Stanford Professor and Solutions Project founder Mark Jacobson said his new paper shows “replacing three subsidized New York reactors with wind or solar PV would cost less and reduce emissions more than keeping the reactors.”
A nuclear plant takes "10 years to 19 years” from planning to operation while most wind and solar projects take "two years to five years,” Jacobson said. “Even if nuclear were cost effective and not dangerous, it would be impossible to solve the global warming problem or eliminate air pollution mortality in any reasonable time with nuclear.”
A new study from a New York consortium showed a renewables and battery storage mix is more cost-effective than natural gas generation for replacing New York's controversial 2,000 MW Indian Point nuclear facility, said Ed Burgess, manager with Strategen Consulting, which did the report.
The cost of a scenario using new wind, new solar, energy efficiency and storage was compared to savings through avoided capacity, ancillary services, distribution system, and peaker startup costs. It delivered a five-year total benefit of $315 million.
Strategen did not run costs on scenarios for keeping Indian Point in operation, for replacing it with new natural gas and energy efficiency, and for replacing it with renewables unsupported by storage, Burgess acknowledged.
“It is fair to say that replacing nuclear with renewables and storage is running in place, but the alternative is replacing nuclear with natural gas and that is going backwards,” Burgess said.
Flexibility, safety and the middle way
“Nuclear doesn’t fit a 21st century electricity system because it is inflexible,” Cooper also argued.
Jenkins responded that nuclear plants can be operated “in a flexible manner.” A 2014 Electric Power Research Institute paper supported his argument. Exelon, the U.S.’s biggest nuclear owner, is now transitioning its fleet to new flexible designs. “You can’t make it work like a natural gas combined cycle plant, but you can make it much more flexible than must run,” he said.
Pacific Gas and Electric (PG&E) recently announced it will shutter its 2,000 MW Diablo Canyon facility by 2025 and replace it with renewables and energy efficiency. But it “could be operated with more flexibility,” Jenkins argued.
CEERT’s White said Diablo Canyon has "particular economic and physical characteristics" that led to PG&E’s decision. “One of the units has a significant amount of embrittlement and could go down even before the planned shutdown.”
The CEERT study that PG&E said most influenced its decision showed a 20-year license extension as “significantly more expensive than a replacement portfolio of renewables, energy efficiency and storage,” White added. Another plant might be retrofitted to be more flexible but its cost effectiveness must be compared to a zero-carbon portfolio's cost. “And does it justify keeping a nuclear plant with economic and safety risks alive?”
Jenkins argued concerns about nuclear plants’ safety are adequately addressed by proactive regulation and design standards. “The risks from nuclear are acceptable,” he said. “And the risks imposed by climate change, or even conventional air pollution from fossil fuels, are greater.”
Jacobson noted that the International Panel on Climate Change found "robust evidence and high agreement" of risks from nuclear weapons proliferation, unresolved waste, mining and meltdowns associated with using nuclear power.
White addressed the safety question differently. “The risks of nuclear are acceptable if you don’t live near an older plant like Indian Point,” he said. “Not all existing plants are necessarily unsafe but each should be evaluated individually. And public safety should not be at risk because of a possible bump in GHGs.”
White agreed with Jenkins and Cooper that no new nuclear is likely to be built in the near future. “What replaces nuclear is a question for an integrated planning process, but the process should consider renewables aggressively,” he added.
“Wind and solar are getting cheaper and they can be packaged with large-scale and distributed storage,” he said. “With demand response and deeper energy efficiency, there is a path to an energy mix that does not, like nuclear, face such big questions about economic risk and safety.”
The door should be open to advanced modular nuclear technologies and fusion, White said. If they can be cost-competitive, “they may help answer the question of whether we can get beyond 80% renewables and all the way to 100% renewables.”
For existing plants, “there should be a retirement and replacement strategy that is not a ‘keep them going at all costs or shut them down entirely’ approach,” he said. It should “minimize if not completely eliminate emissions but it must be a local strategy based on local factors.”