Why the energy industry isn’t going nuclear
The CEO of the biggest electric utility in the U.S. gave a wide-ranging talk the other day on a transformation taking place in her industry, as power providers move increasingly to cleaner forms of generation.
But one topic was missing as Duke Energy’s Lynn Good delivered her formal remarks at an energy conference in Washington: nuclear energy.
Only after she finished her 20-minute presentation and took a question from the audience on nuclear energy did she acknowledge the importance of reactors to Duke.
“I love nuclear,” Good said of the 11 reactors that Duke runs in the Carolinas, making it one of the largest nuclear operators in the U.S
“If we’re going to be serious about decarbonizing the bulk-power system, nuclear has to be part of the conversation,” she said. “But at this point in the conversation, it’s more about keeping plants operating today alive for as long as we can” than building new ones.
Her comments were timely. As she spoke Tuesday, Pacific Gas & Electric was announcing its plans to close the Diablo Canyon nuclear power plant in 2024 and 2025 when licenses for the site’s two reactors expire.
PG&E’s decision brings to seven the number of U.S. nuclear plants, with a total of eight reactors, that have either closed or been scheduled for shutdown since 2014.
Like doomed reactors in New England, New York, Nebraska and Illinois, Diablo Canyon is falling victim to a changing electricity market that increasingly prefers natural gas and renewable energy, thanks to favorable prices for those alternatives and government policies that promote them, not to mention new safety requirements.
While Duke has enjoyed a regulatory climate in the Carolinas that’s been supportive of nuclear energy, building new units would require fresh approval from the states, not to mention years of costly financing, planning and construction.
“If you start building a nuclear plant (now), you will finish it in about 2025,” Good told her questioner at the conference, which was sponsored by the consulting firm Deloitte.
“I think new nuclear is a challenging assignment today and something that we’re going to have to watch as a country and as states as to whether we want new nuclear to be part of the equation in the future.”
Still, Good left no doubt as to the value of Duke’s reactors, which are largely responsible for the utility’s claim that 40% of the energy that it delivered to customers in the Southeast and Midwest is carbon-free. They will continue to operate until the 2030s and 2040s under licenses that have been extended by the U.S. Nuclear Regulatory Commission.
Moreover, Duke expects to receive NRC approval this year to build and operate nuclear plants in South Carolina and Florida, part of a long process that began when the utility filed applications with the government agency in 2007.