New York –
With a prematurely decommissioned nuclear power plant in New York on April 30 and balancing the fortunes of the other two in Illinois, the state of the U.S. nuclear power park is constantly changing at a time when CO2 reduction is a priority. national agenda.
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There are currently plans to decommission just over 8 GW of nuclear capacity, with S&P Global Platts Analytics estimating approximately 5 GW of nuclear capacity with a high risk of decommissioning before the license expires.
Assuming the high risk and announced decommissioning are replaced by natural gas generation with an average thermal capacity of 7,000 BTU / kWh, an additional 1.9 Bcf / day of combustion will result from the replacement of these decommissioned generator operation, equivalent to approximately 39 million according to Platts Analytics, CO2 emissions per year, or 2% of 2016 levels.
Analysts track the risk of NPP decommissioning based on electricity market conditions, operating license status, policy changes and other factors. Specifically, businesses are categorized as high to low risk based on which units can potentially benefit from government-funded financial support or carbon footprint measures.
The 1,041 MW Indian Point Block 3 in Buchanan, New York, about 20 miles north of New York, was finally brought to a halt on April 30 after succumbing to political and economic pressure. Gov. Andrew Cuomo and environmental groups including Riverkeeper have fought for years to close the plant for safety reasons, arguing, among other things, that an accident so close to the global financial industry in the city would be catastrophic.
“Since becoming attorney general, I have been deeply concerned about the safety of the Indian Point nuclear power plant,” Cuomo said in a statement on April 29, adding that the station is not “in the immediate vicinity of the most populous area in the country. “
The owner of the plant, Entergy, said Indian Point is struggling financially due to lower wholesale electricity prices, mainly due to the abundance of shale gas, which averages natural gas prices at around $ 2 per million BTUs. over a long period.
Three additional nuclear power plants in upstate New York remain open because they receive subsidies through taxpayer accounts.
The New York City Public Utilities Commission in 2016 developed the Clean Energy Standard, which stipulates that four nuclear units in the state are 597 MW Ginna Exelon Generation, 640 MW Nine Mile Point-1, 1362 MW Nine Mile Point-2, as. and the 849 MW FitzPatrick from Entergy are eligible for zero-emission loan payments. In 2017 Entergy sold FitzPatrick to Exelon.
Investor-owned utility Exelon also complained about low wholesale electricity prices, weighing on the financial stability of some of its other nuclear power plants. The company received subsidies for its Quad Cities and Clinton plants in Illinois in 2016, which reversed the decision to close them before their licenses expired.
Exelon said in 2020 that it will close its 2,347 MW Byron and 1,845 MW Dresden power plants, also in Illinois, in September and November 2021, as they face hundreds of millions of dollars in revenue shortfalls due to lower electricity prices and market rules that allow fossil fuel businesses to undercharge net resources at the PJM Interconnection capacity auction, the utility said.
However, the government has public policy goals to reduce greenhouse gas emissions to mitigate the effects of climate change, which would be much more difficult to achieve without the carbon-free energy provided by nuclear power plants.
The Clean Energy Jobs Act was passed on February 10 and is broadly similar to the law passed in previous sessions. As with the previous bill, this will require Illinois utilities to purchase 45% of their electricity from renewable sources by 2030 and 100% by 2050.
The Illinois legislature is also debating whether additional over-the-counter payments should be provided to prevent the shutdowns of Byron and Dresden, and a report prepared by the Illinois Environmental Protection Agency recommended that about $ 350 million in subsidies over five years could allow to keep the units in service.
Appreciating nuclear attributes
The financial stability of nuclear power plants located in deregulated electricity markets that operate on a commercial basis, which means that their revenues come exclusively from the sale of electricity, capacity and additional services at wholesale electricity prices, which vary depending on market conditions, are actively discussed.
Nuclear plants in regulated markets are less affected by wholesale electricity prices as they can cover operating costs and profit from increased consumer bills approved by the state utility commission.
The nuclear industry trade group Nuclear Energy Institute, or NEI, recently published a consultant study that found that the cost of operating nuclear power plants in PJM exceeds projected revenues in future years.
“The sharp decline in energy prices in recent years has disproportionately reduced the revenues of nuclear power units, and attempts to replace these revenues by paying for capacity often fail due to the current [PJM] capacity market design, “NEI said in a statement.
The industry group said the “lack of revenues” of the “majority” of PJM nuclear power plants are leading to “increased economic pressure to retire.”
However, a separate analysis by PJM Market Watch Monitoring Analytics found that “no nuclear power plant is considered at risk of decommissioning.”
This debate is likely to continue in the absence of political backing, such as government subsidies for nuclear power plants, or the price of CO2 emissions that would benefit emissions-free nuclear units.
Melissa Lott, director of research at Columbia University’s Center for Global Energy Policy, said during an NEI-sponsored event in March that President Joe Biden’s administration, with its pledge to decarbonize the grid by 2035, could spur the development of new technologies, including cutting-edge ones. modernization of nuclear reactors, storage and transmission systems.
It is unclear which of these options will develop the most, but the decarbonization premise is based primarily on a different idea: “we are not turning off what we already have with zero carbon emissions.”