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Early Retirement of US Nuclear Plants Is a Step Backward

Geoffrey Styles's picture
GSW Strategy Group, LLC

Geoffrey Styles is Managing Director of GSW Strategy Group, LLC, an energy and environmental strategy consulting firm. Since 2002 he has served as a consultant and advisor, helping organizations...

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  • Jul 9, 2013 8:00 pm GMT
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  • The early retirement of the San Onofre reactor complex could increase California’s greenhouse gas emissions by up to 6 million tons per year.

  • Together with other announced and plausible retirements, the loss of existing US nuclear capacity would more than offset new reactors now under construction, along with their contribution to emissions reduction. 

san onofre plant closure

Last month Southern California Edison announced that the utility’s San Onofre Nuclear Generating Station (SONGS), consisting of half of California’s nuclear generating capacity, will close permanently.  The facility had nine years remaining on its operating license. The plant’s two reactors were shut down for repairs in early 2012, and the Nuclear Regulatory Commission (NRC) still hadn’t approved the company’s plan to restart them, despite a protracted review. Although this event is less dramatic than the 2011 Fukushima accident in Japan, its ripples are likely to extend beyond California, where both the state’s electricity market and its greenhouse gas emissions will be adversely affected.

Before considering how the San Onofre closures will affect the nation’s nuclear industry and generating mix, let’s focus on California. While accounting for only 3% of the state’s 2011 generating capacity from all sources, the SONGS reactors typically contributed around 8% of the state’s annual electricity generation, due to their high utilization rates. That’s a large slice of low-emission power to remove from the energy mix in a state that is committed to reduce its emissions below 1990 levels.

How much emissions will increase following the shutdown depends on the type of generation that replaces these units. If it all came from renewable sources like wind and solar, emissions wouldn’t go up at all, but that’s impractical for several reasons. Start with the inherent intermittency of these renewables, and then compound the challenge by its scale. Even in sunny California, replacing the annual energy contribution of the SONGS units would require around 7,200 MW of solar generating capacity, equivalent to nearly 2 million 4-kilowatt rooftop photovoltaic (PV) arrays. That’s over and above the state’s ambitious “Million Solar Roofs” target, which was already factored into the state’s emission-reduction plans.

Grid managers from the state’s Independent System Operator indicated that in the near term much of the replacement power for SONGS will be generated from natural gas. Even if it matched the mix of 71% gas and 29% renewables added from June 2012 to April 2013, based on “net qualifying capacity”, each megawatt-hour (MWh) of replacement power would emit at least 560 lb. more CO2 than from SONGS. That’s an extra 4 million metric tons of CO2 per year, or 8% of California’s 2010 emissions from its electric power sector and almost 1% of total state emissions. If gas filled the entire gap, or if the natural gas capacity used was not all high-efficiency combined cycle plants, the figure would be closer to 6 million metric tons, equivalent to the annual emissions from about 1.5 million cars.

The SONGS shutdown brings to four the number of nuclear reactors that have been closed permanently this year, reducing the operating US nuclear power plant fleet to 100 units. Several other plants face severe challenges, including the ongoing legal battle over the “certificate of public good” for Vermont Yankee, strong local opposition to the Pilgrim unit on Cape Cod, and a hotly contested license renewal process for the two Indian Point units near New York City. The early retirement of San Onofre can only embolden the opposition to other nuclear plants.

A few years ago, when the nuclear power sector planned a large new-build program in the US, it seemed reasonable to assume that most existing plants would easily obtain 20- or 30-year license extensions, in line with well-established precedent. That would carry the bulk of the fleet into the 2040s and beyond. Meanwhile, new construction would add many gigawatts of new capacity and enable nuclear power to gain market share against coal and gas. However, between a recession that stalled the growth of US electricity demand and the low natural gas prices brought about by the combination of the same recession and the shale gas revolution, the economics of new nuclear power in the US have become tenuous. Some operators have even canceled relatively low-cost “uprate” projects to increase capacity at existing plants.

As part of its Annual Energy Outlook for 2013, the Energy Information Administration (EIA) of the US Department of Energy looked at various scenarios for nuclear expansion or retrenchment. In addition to the four reactor retirements announced this year, Exelon Corp. has already announced that its Oyster Creek plant in New Jersey will shut down in 2019, after 50 years of operation. If the two Indian Point units were also shut down, then total retirements since 2012 would reduce US nuclear generating capacity of 101,400 MW by more than the 5,580 MW combined capacity of the five new reactors currently under construction and scheduled to start up by late 2018. The difference of around 650 MW would likely be made up by natural gas.

Between now and 2020, despite the first new nuclear power plants in a decade coming on-line, nuclear’s contribution to our energy mix won’t grow by much, and may actually shrink. That will have consequences for consumers and for efforts to reduce greenhouse gas emissions. Retiring fully depreciated power plants that still have many years of potential operating life remaining, and replacing them with new generation of any technology, is bound to increase the cost of electricity in the markets where these plants have operated. And even if the net loss of nuclear capacity were directly replaced with high-reliability renewable generation such as hydropower or geothermal, that’s still that much renewable capacity not available to displace higher-emitting generation. Opponents of nuclear power may see that as progress, but it looks like a step backward to me.

A slightly different version of this posting was previously published on Energy Trends Insider.

Photo Credit: San Onofre Plant Shuttering/shutterstock

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George Stevens's picture
George Stevens on Jul 9, 2013

Wow!

It is great to support green energy but very unfortunate that so many do it at the expense of nuclear power!

If you go on a site such as cleantechnica or greentechmedia, the commenters there only rejoice in the closing of SONGS! And they like to call themselves green, just a bunch of complete non-sense.

Energy tribalism is peaking and the consequences are ridiculously backwards from the real goal to cut emissions.

Elias Hinckley's picture
Elias Hinckley on Jul 9, 2013

Another page in the story of how our inability to map a thoughtful forward-looking energy policy is creating very real economic challenges.  Waiting until the ongoing operation of significant energy infrastructure becomes unviable (not as though there was a good path forward for SoCal Edison to continue to operate San Onofre) and then reacting to the loss of the system almost guarantees disruption as easy replacements are not readily available.  The lack of vision by both industry and government with respect to the transition of old energy assets is inexplicable.

John Miller's picture
John Miller on Jul 10, 2013

California continues on their green energy strategy by shutting down zero carbon nuclear?  Often overlooked or not reported in the Media is the fact that California’s net in-state power generation supply-capacity has historically not met demand.  Before shutting down the San Onofre units the state imported about 21% of its total electric power consumed.  With the S.Ca. nuclear power capacity permanently shutdown, the level of electric power imports will likely increase by a couple more percent.  

This supply-demand behavior is not unusual since the state typically consumes about 1.7 million barrels per day (MBD) of petroleum oil products and limits in-state crude oil production to about 0.5 MBD; while sitting-on potentially huge conventional and unconventional oil reserves.  Guess where most of California’s oil imports originate?  Hint: it’s not within the U.S.

Nathan Wilson's picture
Nathan Wilson on Jul 10, 2013

California has unusually good renewable resources (its geothermal and desert solar potential are easier to turn into high capacity-factor power than the resources in other parts of the country).

So the other bad news is that they are contributing to anti-nuclearism which effects the entire nation, while persuing alternatives that are unique to the southwest.

I K's picture
I K on Jul 10, 2013

The problem of most old nuclear is that they are overstaffed. 

A new 1GW CCGT needs only 40 staff while an old 1GW nuclear power station may have as many as 1000 staff.

Nuclear fuel may be cheap but the additional 960 staff are not. The wages differential alone is enough to pay for the gas to run thr CCGT at fully capacity non stop for 4 months

 

 

Paul O's picture
Paul O on Jul 10, 2013

It’s tough to compete with Older Technology against newer tech, especially in a highly regulated environment. But it should be worth noting that some 1) Nuclear plants are fully depreciated, 2) natural gas is not going to be this cheap forever, 3) Natural gas as a FF and does produce CO2. It is probably much better for Home Heating (says me), and better used to balance variable Wind and Solar power especially as the percentage gains of these variable tech increases.

Now rather than closing Nuclear plants, might we have been able to automate some of the tasks done by humans?

Geoffrey Styles's picture
Geoffrey Styles on Jul 10, 2013

In addition to Paul’s comment below, I should point out that the labor costs you cite are all encompassed in standard O&M cost calculations.  Even with this included, a fully depreciated nuclear power plant will produce power at a lower cost than a CCGT that has to buy its gas, no matter how many fewer employees the latter has.

Your argument is more relevant to low-intensity energy sources with both high labor and capital costs.  This was a fundamental fallacy of the whole “green jobs” argument.

Geoffrey Styles's picture
Geoffrey Styles on Jul 10, 2013

Eli,

I agree with your critique in general, but I don’t believe it applies to SONGS in particular. As I understand it, SCE and the state would had ample reasons to expect another 10-30 years of reliable operation, prior to the unexpected problems that occurred in the non-nuclear sections of the facility after replacement of major components at the last shutdown.  SCE had a plan for bringing the facility back on line after repairs, but neither they nor ratepayers could cope with an NRC review process of indeterminite length, during which they would have to carry all the costs of the facility without any revenue.  So it appears the failure here was regulatory, rather than a lack of foresight.  

Elias Hinckley's picture
Elias Hinckley on Jul 10, 2013

I didn’t mean that there was no possible path forward for SONGS, but that there wasn’t one for SoCal Edison – the environment wouldn’t allow the risk of uncertain costs to fix and restart the plant to hang over ratepayers (notwithstanding Georgia Power’s success with getting overruns at Vogtle into rate-base, getting overruns and certainly pre-approval for including uncertain/undefined costs, into rates is really hard), and Edison was in no shape to carry the financial risk.  The market/regulatory mismatch makes it very hard to get the overall economic choice for something like SONGS right (though my hunch is the possible cost was so high that it scared everyone away from really pushing the extension project).

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