How to manage the implosion of nuclear power
In 1972, Public Service Electric & Gas Company placed an order for two floating nuclear power plants to be located a few miles off the coast of Atlantic City. The plan called for construction of the 1.1-megawatt plants in Jacksonville, with the reactors to be mounted on barges and towed up to New Jersey. The plants would have generated enough electricity to supply two million homes, sending the power back via underwater cables.
However, after revised electricity forecasts projected reduced growth in power demand, PSE&G cancelled its order for the offshore reactors. Westinghouse then shut down its Jacksonville factory and eventually dropped plans to build floating nuclear plants.
Today, the very future of nuclear power is in question. The electricity market is flashing warning signs that bad times are ahead for the nuclear industry and the U.S. fleet of 100 nuclear power plants.
Westinghouse is bankrupt. Only two new nuclear plants are being built in the U.S., and both are plagued with huge cost overruns. The nuclear industry has been rocked by plant closings and battered by an abundance of cheap natural gas, which has made it difficult for nuclear plants to compete. Since 2014, electricity companies have either closed or announced plans to shut down 14 existing U.S. nuclear plants, and odds are high that at least a dozen more nuclear plants will be shuttered. Among those in jeopardy are all four nuclear plants in New Jersey – PSE&G’s Salem 1 and 2 plants and the Hope Creek plant and Exelon’s Oyster Creek plant.
At a bare minimum, the policy choices ahead are difficult. And for PSE&G, the question is whether New Jersey needs the large amounts of baseload power that nuclear plants provide. Could New Jersey run on natural gas and renewable energy alone?
This may seem like an absurd question, given that nuclear power supplies 44 percent of the state’s electricity. The answer is that low-cost natural gas – which accounts for 46 percent of New Jersey’s electricity – will grow in importance, along with renewables and improvements in energy efficiency. Incredible as it might seem, nuclear power is just no longer needed to maintain grid reliability.
According to a study by the Brattle Group, the term “baseload generation,” which has been synonymous with nuclear power and coal for decades, is no longer useful for the purposes of planning and operating today’s electricity system. Instead, more flexible resources like natural gas and renewables are increasingly needed to cost effectively assist with meeting changing system loads, responding to local requirements and integrating the variable output of solar and wind power.
Despite changing market conditions, some states have approved generous subsidies to keep their financially-stressed nuclear plants afloat. Illinois and New York state have approved a zero-emission nuclear resource program that puts a price on nuclear power’s attributes in meeting carbon reduction goals — though both efforts are being challenged legally by other electricity producers, who say the nuclear credits intrude into federal wholesale markets.