Vermont's Only Nuclear Plant Becomes Fifth Reactor to Close in 2013
August 28, 2013 4:25 PM
America's aging nuclear is headed to the retirement home
Two weeks ago Entergy Corp. (
) won a bitter fight with the State of Vermont to keep the East Coast state's
only nuclear power plant
open. The reactor sits near Brattleboro, Vermont on the southern tip of the state near Massachusetts. The reactor was a Mark 1 boiling water reactor (BWR) design, similar to the reactors that melted down at Fukushima after being struck by an earthquake and tsunami flooding.
I. Giving up the Ghost
The single reactor Yankee Power Station, first commissioned in 1972, had already
secured a 20 year extension
--good through 2032 -- from the
U.S. Nuclear Regulatory Commission
(NRC), but had been battling Vermont state regulators
who wanted to close the aging plant.
In its fight to keep the reactor open, Entergy first won a decision from the
U.S. District Court for the District of Vermont
U.S. District Judge J. Garvan Murtha
[PDF] the state to allow the plant to continue to operate. The state appealed that decision. But in early August, the
2nd Circuit U.S. Court of Appeals
in New York
[PDF] that the
Atomic Energy Act of 1954
[PDF] and the
Federal [Water] Power Act of 1920
TITLE 16 U.S.C. Chapter 12
) overode a pair of state laws that the state claimed gave it the power to regulate nuclear safety. The decision effectively banned the state from shutting down the reactor which the NRC approved of.
But in an ironic twist Entergy decided to shut down the reactor anyway, acknowledging the financial barriers facing the plant's continued operation.
Entergy scored a pyrrhic win in its battle to keep the Yankee Nuclear Power Station open.
[Image Source: AP]
a press release
said that it expected the plant to about "break even" this year fiscally, but could lose as much as $50M USD per year on average over the next several years. By shuttering the plant, Entergy plans to save $150M to $200M USD in total costs by 2017. However, it has already taken a charge of $181M USD on the shuttering plan, and expects an addition $55M to $60M USD in costs relating to employee pension and severance.
Most of the plant's 630 employees -- plus an undisclosed number of contractors -- will be terminated, although a skeleton crew will be kept on during the plant's decommissioning -- a process which could last for decades if Entergy has its way.
Bill Mohl, president of Entergy Wholesale Commodities, comments, "Simply put, this decision was based on economics."
II. Nuclear Power is Struggling Financially
While nuclear fuel is relatively inexpensive, plant maintenance is not trivial; for example since Entergy acquired the Yankee plant in 2002, it has spent $400M USD -- or roughly $40M USD -- on upkeep. When you pile on the
cost of lengthy legal battles
with "green" minded activist parties on the local and state level, nuclear isn't quite so cheap.
To make matters worse, nuclear has had to compete fossil fuels, which are booming amid the
explosion of natural gas and oil extraction
("fracking"). The surplus of fossil fuels has driven down prices, which Entergy notes in its press release on the closure.
Fracking proejcts have greatly cut U.S. fossil fuel costs.
[Image Source: U.S. Energy Information Agency]
To add insult to injury, nuclear -- which receives a stick from the government (on a state level at least) via legal fees -- has to compete with alternative energy like wind and solar that are
lavished with tax credits and other incentives
on a state and federal level. As Entergy puts it:
Wholesale market design flaws that continue to result in artificially low energy and capacity prices in the region, and do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide.
Professor Henry Lee
, director of the
environment and natural resources program
Kennedy School of Government
warns, "Nuclear power is in big trouble economically."
III. Vermont is Happy to See Nuclear Jobs Leave
And not everyone is sad about that. Vermont Governor Peter Shumlin (D) commented:
Entergy's announcement today confirms what we have known for some time. Operating and maintaining this aging nuclear facility is too expensive in today’s world. Vermont utilities no longer have contracts with Vermont Yankee, and our regional grid is not reliant upon it for stability. Vermont has made clear its desire to move toward more sustainable, renewable sources of electricity, and many of our surrounding states are doing likewise.
Vermont Yankee was built with an expectation that it would operate for a limited period of years. While it is no secret that Vermont and Entergy have disagreed on how long that should be, it is now clear that Vermont Yankee is a part of the energy past, and will not be a part of our energy future.
The state says it will work to provide resources to the displaced workers.
Protesters picket Yankee power plant back in 1986. [Image Source: AP]
The cost of decommissioning the Yankee plant is estimated $566M USD; fortunately Entergy during the plant's profitable years established a trust which today is worth $582M USD and growing.
A growing controversy exists regarding the aging reactor's decommissioning cycle. Entergy is asking the NRC to allow it to put the reactor in "safe-storage" -- an up to 60-year period to allow the reactor to cool down before completing the decommissioning.
Sen. Bernie Sanders
with the plan and says he will challenge it, stating, "Entergy must go through a decommissioning process as soon as possible."
In addition to potential dangers of uncooled nuclear waste, decommissioning the plant too soon could impact Entergy financially by giving its trust less time to mature.
IV. Over Half the Nation's Nuclear is Nearing End of Life
America's aging nuclear industry has been facing a firestorm of criticism ever since the
March 2011 meltdown in Fukushima
. Despite the fact that the Fukushima failure
was due to negligence
-- the operator
defied its engineers' advice to waterproof backup generators
to save on costs -- the incident has had a powerful impact in shifting
American public opinion against nuclear power
That shift has helped the government escape criticism for giving solar and wind power handouts that it won't give nuclear power. It has also driven some states to try to kick out aging nuclear plants -- including Vermont.
Of the 104 reactors in 65 commercial plants in 31 states in the U.S., twenty-three -- or roughly a fourth -- are 40 years old or older. Another forty-two reactors are 30 years old or older. These older reactors tend to not only be the least efficient -- causing them to struggle more to compete with cheap fossil fuel power and artificially cheap alternative energy -- they also require more in maintenance.
Over half of U.S. reactors are over 30 years old. [Image Source: Corbis]
Currently the nation gets about 20 percent of its power from nuclear energy. But that could dip to 10 percent or less within a decade if the older plants are decommissioned and there's little new growth.
So far this year five reactors have been scheduled for decommissioned. Three of them -- San Onofre 2 and 3 near San Diego and Crystal River 3 in Florida -- had underwent botched maintenance efforts and would have required expensive repairs. And the Yankee plant had mounting legal costs.
V. Handful of New Projects Can't Keep Pace With Shutdowns
But one of the reactors -- the Kewaunee Power Generating Station in Kewaunee, Wisconsin shut down "purely for economic reasons" due to the falling price of natural gas. Owner Dominion Resources, Inc. (
) had kept the reactor -- a more efficient 556 MW pressurized water reactor (PWR) design -- well maintained and had little in the way of current legal issues.
Nuclear analyst Peter A. Bradford, a former member of the NRC and a former head of the
New York State Public Service Commission
The New York Times
That’s the one that’s probably most ominous. It’s as much a function of the cost of the alternatives as it is the reactor itself. Kewaunee not only didn’t have a major screw-up in repair work, it didn’t even seem to be confronting a major capital investment.
With the five closures, the nation's number of reactors is expected to dip to 99 by next year -- the lowest level in decades.
Some new modern reactor designs
The AP1000, to be used in Georgia and South Carolina Plants [Image Source: Westinghouse]
The Tennessee Valley Authority
a new reactor
in its state,
[PDF] are being built in Georgia (as an addition to the two-reactor Vogtle, Georgia plant), and
are being constructed in South Carolina at the Virgil Plant, which currently has only one active reactor.
Nine other license applications
are under review, according to an NRC page. However, the recent industry tribulations are apparent from that page; eight other license requests were abandoned (marked "suspended") for various reasons -- in many cases costs. Licenses typically take five years or more to obtain.
China is already building a number of AP1000s, even as the U.S. nuclear industry wanes.
[Image Source: Westinghouse]
The rate of construction clearly isn't keeping up with closures. And that has some wondering whether nuclear power in the U.S. is destined for a slow ride off into the twilight, killed by cheap fossil fuels, alternative energy protectionism, and zealous "environmentalist" litigation.
"I modded down, down, down, and the flames went higher." -- Sven Olsen
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