Facing Threats, Nukes Work to Polish Their Green Cred

3rd May, 2017

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The James A. FitzPatrick nuclear power plant on Lake Ontario in upstate New York is an unattractive pair of industrial-scale boxes that house a reactor, a turbine, and a generator to create electricity. Its blunt and inflexible profile may be an apt metaphor for the challenges facing a growing portion of the U.S. civilian nuclear fleet.

The 838-megawatt, single-unit boiling water reactor has produced power for more than 40 years. But a year ago, it seemed that FitzPatrick’s days were numbered. Single-unit nukes like FitzPatrick can be expensive to run because they lack the economies of scale available to larger multi-unit plants.

Operator Entergy said FitzPatrick’s economics also were hurt by a market structure that often favors renewable energy over baseload sources like nuclear and coal.

A January 2017 white paper by the National Conference of State Legislatures says that since 2013, six nuclear reactors in the United States have closed for good. Another 12 are slated to shut down. And operators of several more have warned of possible closures.

And on April 14, Energy Secretary Rick Perry ordered a study of the U.S. grid in an effort to determine whether policies that boost renewable energy are speeding the retirement of coal and nuclear plants and threatening power reliability.

Indeed, many operators complain that nuclear energy has long been the source of emission-free generation that clean-energy advocates love to hate.

Clean, but with Problems
One problem is that nuclear power plants produce energy at an industrial scale. That has left them behind as trends in recent years have favored “democratizing” the energy supply via technologies like rooftop solar and small-scale renewables.

A second problem is that nuclear power plants have a spent-fuel issue. That means that even though a nuke produces no carbon emissions as their coal and gas-fired brethren do, spent nuclear fuel remains dangerously radioactive for thousands of years after its removal from the power plant.

The federal government had committed decades ago to developing and operating a long-term spent fuel disposal site. Work was under way at Yucca Mountain in Nevada to create just such a facility. But politics intervened and Nevada’s former Senator Harry Reid convinced then-President Barack Obama to take Yucca Mountain off the table as a nuclear waste repository. As a result, sealed canisters of spent nuclear fuel remain at nuclear plants all across the U.S.

These factors loom large as many clean energy advocates have been loath to extend a welcoming hand to zero-emission nuclear power.

Favoring Renewables
But some say that purists sacrificed the good for the ideal by discounting nuclear power’s emission-free credentials. A handful of states included nuclear when rulemakers wrote what are known as Renewable Portfolio Standards. In place in roughly two-thirds of the states, the standards set goals for deploying renewable energy resources. They also help set rules for how and when utilities must buy power from these sources.

Wind, solar, biomass, geothermal, and small-scale hydro (large-scale hydro is almost as hated as nuclear in some green circles) typically are included as preferred generating sources. Wind and solar have also been boosted by federal tax credits.

But wind and solar are intermittent resources; when the wind doesn’t blow and the sun doesn’t shine, wind turbines and solar PV arrays are idle. Their on-off nature means that some fossil power plants must adopt a technique known as “cycling.” In practice, cycling means that a fossil-fired power plant is turned down to make room on the grid for available renewable energy.

Coal-fired plants in particular have suffered due to cycling demands. They were never designed to cycle, so operational and maintenance challenges grow as thermal expansion and contraction during cycling take a toll on ducts, pipes, seals, and other equipment.

Nuclear power plants are even less flexible and cannot be cycled. Fleet operators have spent decades perfecting the art and science of getting constant, reliable generation from these plants. Between refueling outages, a nuclear power plant might run non-stop for 18 to 24 months.

Pressure from Natural Gas
Renewables have pressured nuclear generating assets, but so has the rise of low-cost natural gas–fired generation. The shale gas revolution made possible by hydraulic fracturing technology means that abundant and generally low-cost supplies of natural gas are available for power generation. Natural gas offers a smaller environmental footprint than coal (though it’s still a carbon-based fuel) and presents the kind of cycling flexibility that nuclear plant operators can only dream of.

Back in 2014, the changing landscape caused Illinois-based Exelon to consider shutting down as many as one-third of its nuclear fleet, totaling some 5,400 megawatts, said Bryan Hanson, the utility’s chief nuclear officer at a recent industry conference.

Even though Illinois is home to 11 reactors at six different stations that collectively produce around 50 percent of the state’s power, legislators failed in 2016 to pass a measure that included a zero-emission benefit.

As a result, Exelon Generation last June said it would close its Clinton Power Station on 1 June 2017, and its Quad Cities Generating Station on 1 June 2018. The utility said the facilities had lost a combined $800 million in the past seven years, despite being two of Exelon's best-performing plants. Altogether, some 1,500 jobs were at risk, along with almost 3,000 MW of baseload generating capacity.

Legislators got the message and, in November 2016, approved a zero-emission bill that could keep the two Illinois plants operating for another 10 years. Senate Bill 2814 made changes to the state’s renewable portfolio standard but also included financial support (some call it a bailout) for the Exelon nuclear units.

The support amounts to around $235 million a year in ratepayer subsidies to Clinton and Quad Cities via the zero-emission standard. The credits will be available for 10 years, ending right about the time the plants’ federal operating permits are set to expire.

Meanwhile, in New York State, regulators in August 2016 approved a plan to offer zero-emission credits for three nuclear power plants in upstate New York, including FitzPatrick. The plan will pay nuclear plant operators for every megawatt-hour of carbon-free electricity they generate. The subsidy could provide as much as $7.6 billion over 12 years to the three nuclear plants’ operators.

The policy had an immediate effect. Within days, Entergy agreed to sell FitzPatrick to Exelon, which ranks as one of the nation’s largest nuclear operators. Left out of the rulemaking, however, was Entergy’s 2,000-MW, three-unit Indian Point station on the Hudson River north of New York City. Policymakers said that because that plant does not operate at a loss, it needs no additional payment.

A zero-emission-credit plant is also being considered in Ohio, where nuclear plants operated by FirstEnergy could benefit. And in Pennsylvania, legislators formed a first-of-its-kind nuclear advocacy group to work on issues aimed at protecting the state’s nuclear assets. Those assets include the remaining reactor at Three Mile Island, site of the nation’s worst nuclear accident in March 1979.

Headlines in Ohio in recent weeks have screamed of a state-orchestrated bailout for what were described as expensive power plants that have outlived their usefulness and can’t compete in the PJM Interconnection market.

Markets at Work
But the market is doing its job, said PJM President and CEO Andrew Ott, who also spoke at the industry conference. He pointed to the nearly 30,000 MW of combined cycle natural gas (CCNG) power plants that are new in the market, which reaches from New Jersey to Illinois and Kentucky and as far south as North Carolina. That has lifted the share of the generation mix for natural gas to around 30 percent, up from around 4 percent in 2008.

Natural gas-fired generation has proven to be flexible, scalable, and efficient— all desirable traits in a market that expects power plants to cycle to accommodate renewable energy.

The rise of natural gas-fired generation has led to a more “diverse and robust” electricity mix for PJM, Ott said.

Threat to Reliability?
But increased reliance on natural gas may come at a cost to reliability. Among the worries for grid operators like PJM is the practice among many gas-fired power plants to contract for gas supplies using “interruptible” contracts. These contracts offer flexibility and lower tariffs than so-called firm, uninterruptible contracts. But they also mean that a power plant can have its supply cut off if, say, a severe weather event occurs like the polar vortex of 2014. In those cases, residential home heating and commercial demand can bump off power plants.

Some see nuclear power plants with their 90-percent-plus capacity factors as ripe for playing a prominent role in ensuring grid resiliency as natural gas generation grows. That possibility—along with growing recognition of nuclear as zero-carbon emission resource—could keep plants like the James A. FitzPatrick station operating for years to come.


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