Three nuclear power plants in the U.S. have shut down, and two more have recently announced they will shut down by 2019. The Tuesday NUCLEAR POWER International conference and exhibition session “To Close or Not to Close” discussed how closing down nuclear power plants affect economics, grid reliability and overall security but also what methods there are to overcome the lost generating capacity or prevent the closures.
Edward Kee, owner of Nuclear Economics Consulting Group, discussed the effect that markets have on merchant nuclear power plants, which are plants built by regulated utilities designed to make money in unregulated markets. Merchant plants, like Kewaunee in Wisconsin and Vermont Yankee, have already closed. Entergy’s FitzPatrick in New York and Pilgrim in Massachusetts are set to close in 2017 and 2019, respectively. More nuclear plants, like the San Onofre Nuclear Generating Station 2 and 3 in California and Crystal River 3 in Florida, shut down due to maintenance issues that were too expensive to fix.
“If the value of nuclear electricity had been a lot higher, think a carbon tax or something like that, the owners of those units might have spent the time, money and the risk to fix those problems,” Kee said. “They were big problems, but there is still a value to those plants.”
Despite the dire financial terms of nuclear, there are new nuclear plants currently under construction. Summer units 2 and 3 in South Carolina and Vogtle 3 and 4 in Georgia are currently being built and are scheduled for completion by 2019. Watts Bar 3 in Tennessee is set for completion by the end of 2015 or the beginning of 2016. All of the units are 1,100-MW Westinghouse AP1000 reactors.
Low natural gas prices are the biggest factor behind the market prices effects on nuclear, and they are projected to remain under $2 per MMBtu, according to the U.S. energy Information Administration’s Short-Term Energy Outlook. There is no value for zero carbon electricity, yet operating costs remain high. Kee commented that the Clean Power Plan is designed to close down coal-fired power plants, yet does not benefit the zero-emissions and reliability of nuclear.
“If you’re one of these guys operating nuclear power plants, the Clean Power Plan has kind of put the seal on you,” Kee said.
Another way the markets are affecting nuclear plants is through short-run marginal costs, which is the difference it would take to operate a plant 1 MW lower over a year.
“For a coal plant, that would equal fuel costs,” Kee said. “For a nuclear plant, that equals zero, and that is the same that renewables would cost as well.”
Those costs are some reasons that more renewables are able to bid on the capacity auctions such as the ones through grid operator PJM Interconnection. The capacity markets look just a few years into the future and are only based on reliability. However, you can have so much capacity coming on that other generating sources need to be turned off, yet nobody wants to turn them off.
“Many of these grid operators are actually paying plant operators to turn off their plants, but nuclear plants cannot be turned off and on quickly,” Kee said. “So nuclear plants are having to pay the market operator to stay online overnight.” When combined with high operating costs, merchant plants are losing millions of dollars a year.
But there is at least one method that could bring in money for plant operators and help stem the intermittency issue. Lincoln Bleveans, power resources manager with Burbank Water & Power, talked about compressed air energy storage (CAES) and how the technology could help base load power plants integrate with an increasing amount of renewables coming online.
Burbank Power & Water owns stakes in the Palo Verde nuclear plant and Hoover Dam in Arizona, along with other plants in Oregon, Washington, Nevada and California. It is mandated to meet California’s renewable portfolio standard and has reached 34 percent of renewables. Now, utilities in the state must reach 50 percent renewables by 2030.
Burbank Water & Power is also unique in that the power is not provided to the California ISO grid, but it is put in the LADWP Balancing Authority. The utility faces an over-generating problem in the middle of the day but can’t send the generation out on the grid.
“We can’t take the intermittency of renewables and spread it among the ISO. We must deal with it directly,” Bleveans said.
In order to deal with the intermittency, Bleveans said the utility needs a “flexible sink” where the energy can be sent in the middle of the day while maintaining reliability from its other power plants. The utility is looking at the 1,900-MW Intermountain Power Plant in Utah for a solution. The plant will be converted to natural gas by 2025.
Below the plant is a rock cap, and below that is a huge salt cap, Bleveans said. The salt cap could be used for compressed air energy storage (CAES).
“CAES works by hydro-mining a cavern through the rock cap into the salt cap, then air is pumped in through a generator, and a small amount of natural gas is added to reheat the air,” Bleveans said. “When it’s not needed, the electricity compresses air into the cavern. It is essentially a simple-cycle gas turbine but in two pieces.”
CAES is just one solution to potentially help operating and economic issues in the U.S., but both speakers agree more needs to be done to try and keep nuclear power plants from closing prematurely. The U.S. nuclear industry has asked for a level playing field when it comes to nuclear being fairly compensated in the market, and there are no easy answers for that.