Spate of nuclear power plant closures could be start of full-fledged crisis
Nuclear power is approaching a crisis point as a significant chunk of the nation’s reactor fleet is planning to close prematurely.
Alarm bells are ringing almost weekly as utility companies announce they are closing their nuclear plants years ahead of when their federal licenses expire. The news that the plant at Three Mile Island in Pennsylvania would be closing soon marked a significant turning point as a symbol of the industry’s long history, perhaps even outweighing the plant’s 1979 partial meltdown.
Five plants have closed in less than four years, and six more are scheduled to shutter operations within the next five years, while many others are at risk of closing. The U.S. power plant fleet now totals 99 reactors.
One of the main reasons the plants, which produce about 20 percent of the nation’s power supply, are closing early is the low price of natural gas.
The shale energy boom and fracking have caused the nation’s supplies of natural gas to soar, making it a cheap, readily available fuel for new, efficient natural gas-fired power plants. The federal wholesale markets that regulate the supply of power favor the lowest cost electricity, and that pushes more expensive sources such as nuclear to the back of the line.
The market situation makes it harder for plant owners to cover the expense of operating the plants, which is driving the decisions to close.
The Nuclear Energy Institute in Washington, the industry’s lead trade association, sees it as a national security problem as well as a market issue. But it has been disappointed in the federal government’s lack of response.
“The market-driven challenges confronting the U.S. nuclear industry do imperil numerous plants with premature retirement, and losing more plants means that our long-standing global leadership with the technology we founded is at risk,” said Neal Cohen, the nuclear group’s senior vice president for external affairs.
“This has fundamental national security implications,” Cohen said. “We cannot credibly claim global leadership while our domestic fleet shrinks.”
The U.S. has the largest fleet of nuclear power reactors in the world, with 99. But the fleet is aging, dating more than 40 years, and China is building power plants, which could move the expertise and engineering out of the U.S. and overseas.
Exelon, the largest nuclear utility in the country, which now owns the regional utility company Pepco that supplies power to the White House, sees fundamental problems in how the electric markets are managed that affect the economic health of nuclear plants.
Those concerns are the first words a visitor sees on its website. “The future of America’s 99 nuclear reactors is uncertain. In the next two decades, key economic and policy challenges threaten to close about half of America’s reactors,” a brief explaining the state of the nation’s nuclear fleet warns.
“As America’s largest nuclear fleet operator, we’re working hard to reverse this trend,” Exelon’s website says. “In total, Exelon currently employs more than 12,000 workers across its nuclear fleet,” and the fate of its 14 nuclear reactors is uncertain.
The Nuclear Energy Institute began flagging the issue with the Obama administration more than a year ago at a summit hosted by the Department of Energy. The industry had warned that 10-15 power plants were at risk of closing.
“Two more plants announced premature retirement since that summit,” Cohen said. “The same number remains at risk today.”
The industry has been raising the issue with the Trump administration, but the most it can hope for is that Energy Secretary Rick Perry includes the concerns in a report he is drafting on electric grid reliability, Cohen said. He said the industry isn’t relying on the federal government, which has been slow to act.
Both Commerce Secretary Wilbur Ross and Perry “have explicitly identified U.S. nuclear energy as imperative to our national security,” Cohen said. “But traditionally, the federal government has been slow to act in the energy policy space. We continue to believe that the near-term remedies will continue to come at the state level.”
Neither the Energy Department nor the White House responded to requests for comment.
State remedies saved one of Exelon’s Illinois plants from shuttering on June 1, with the extension of more than $200 million in ratepayer subsidies. New York did something similar to save its ailing plants. But those actions have landed the states in court, where natural gas plant owners say the subsidies offer an unfair advantage and that the market should decide which power sources should be used.
But Exelon is also going to the market regulator itself, the Federal Energy Regulatory Commission, to try to make the market more hospitable to nuclear.
“At the federal level, we’d like FERC, which oversees the competitive markets, to clarify that federal rules allow those markets to incorporate state environmental goals into their pricing systems,” Cohen said. “In other words, the kind of actions taken in New York and Illinois are within federal rules, and other mechanisms are also permissible.”
Experts and officials have real concerns about the impact of plants closing in the coming decades.