MARY JO ROGERS, PH.D.
One hundred years ago I was not around to witness the growth of the electric utility business; nor see the technological advances of 50 years ago, or the start-up of the first commercial nuclear power plant (Dresden 1 in 1960). Ever since I made a career transition that planted me in and around the root system of the nuclear renaissance, I have been wondering how the industry ever got the reputation as a sleepy, unchanging world-a boring, regulated environment.
The excitement continues with the ever-changing dynamics of economy, technology, regulation, and politics. The resultant anxiety and concern now are about as high as the excitement and anticipation of 15 years ago. On the heels of electricity de-regulation in select states, U.S. nuclear power plants across the country started to stretch to their pinnacle of reliability, production, and safety. Electricity markets made major investments and capital improvements possible. Nuclear new construction appeared viable and the number of proposals and applications for nuclear new builds reached unprecedented levels.
Then, hydraulic fracturing and horizontal drilling made shale gas accessible. At the same time, the economy faltered, lowering electricity demand while the bottom dropped out on natural gas prices, and hence electricity prices. Meanwhile, technological advances in renewable installations, combined with support by state regulations, have given renewable sources electricity marketplace advantages that are felt profoundly by nuclear power (and coal). Quite the triple punch of technology, economy, and regulation.
Which leads to where we are today, with nuclear power plant owners feeling like they are fighting for their lives. Despite the obvious benefits to grid stability and carbon reduction efforts, nuclear power plants are being shuttered due to flawed electricity markets that have been recently altered to benefit wind and solar generation. While investing in new technologies and electricity diversity are always a good idea, doing so at the expense of long-term electricity diversity and grid stability is not a good idea. Although distributed generation and energy storage are expected to grow, the U.S. economy depends on a stable grid, and a stable grid depends on large generators, such as nuclear power plants. The canaries in the coal mine of electricity markets, the shuttered Kewaunee Station in Wisconsin and Vermont Yankee, show that concerns raised over the premature closing of potentially thousands of megawatts of nuclear generation are not empty threats.
In an executive panel at the Nuclear Energy Assembly in Washington this May, Bill Mohl, President of Entergy Wholesale Commodities, stated that the Federal Energy Regulatory Commission (FERC) needs to update its policies and address the erroneous market pricing issues. “States are picking winners and losers and not properly valuing the attributes of all generation,” he said.
In his keynote address, Exelon CEO Chris Crane made a compelling case for action on multiple levels. The risks and potential costs of over-reliance on gas and a less diverse generating mix are extremely high. Crane encouraged policy-makers to address needed market reforms as well as international trade opportunities and threats. He also suggested that the Nuclear Regulatory Commission should focus its regulatory priorities on safety.
In sum, the current nuclear power position begs for a comprehensive energy policy that values nuclear power’s inherent reliability, grid stability, and carbon-free generation qualities. In the most recent, visible policy level action by the Department of Energy, Secretary Moniz released part one of the department’s Quadrennial Energy Review (QER). The initiation of the QER holds much promise-to provide a roadmap for federal energy policy based on a comprehensive assessment of the nation’s needs and resources. While the first installment of the review is silent on nuclear power, it drew considerable attention to aging infrastructure and transmission issues that need concerted actions to address. Nuclear power advocates are pressing for the DOE to speak to the nuclear situation in part two.
While the nuclear renaissance has died down and nuclear new build projects have been significantly curtailed, the rest of the country’s nuclear power fleet is aging, with many plants approaching retirement age. Without improvements in markets that value nuclear, any major new construction will not be feasible. Moreover, the significant investments needed to upgrade current operations (e.g., replacing steam generators) will not be worthwhile.
I for one, continue to do what I can to stay on the roller coaster ride of commercial nuclear power. When does the boring part start?
Mary Jo Rogers, is a partner at Strategic Talent Solutions with over 15 years working with energy leaders. She recently published the book, “Nuclear Energy Leadership: Lessons Learned from U.S. Operators,” by PennWell. Contact Mary Jo at [email protected] .