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America's aging nuclear is headed to the retirement home

Two weeks ago Entergy Corp. (ETR) 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 since 2010 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's U.S. District Judge J. Garvan Murtha who ordered [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 ruled [PDF] that the Atomic Energy Act of 1954 [PDF] and the Federal [Water] Power Act of 1920 [PDF] (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.

Yankee Nuclear Plant
Entergy scored a pyrrhic win in its battle to keep the Yankee Nuclear Power Station open.
[Image Source: AP]

Entergy in 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 from hydraulic fracturing ("fracking").  The surplus of fossil fuels has driven down prices, which Entergy notes in its press release on the closure.

Fracking regions
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 at Harvard University's 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.

Vermont protesters
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 (I-Vermont) disagrees 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.

Nuclear Reactor
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. (D) 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 Commissiontold 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 are incoming.

Reactor design
The AP1000, to be used in Georgia and South Carolina Plants [Image Source: Westinghouse]

The Tennessee Valley Authority is constructing a new reactor in its state, two reactors [PDF] are being built in Georgia (as an addition to the two-reactor Vogtle, Georgia plant), and two more 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.

Chinese plant construction
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.

Source: Entergy



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

RE: Still the Cheapest
By Reclaimer77 on 8/29/2013 2:24:19 PM , Rating: 2
Virtually nothing you said was true. ALL power plants cost billions to build, idiot. The reason nuclear is so expensive is mostly because of the crushing weight of oversight, lawsuits, just all the red tape. Years of "environmental impact" studies and every other artificial barrier that can possibly be thought up.

quote:
And then we still after all these decades haven't figured out what to do with the waste


More FUD. Actually an outright lie.

quote:
Much as you and other proponents might cry about it, the age of nuclear power is coming to an end.


Hmmm, tell that to France. They might disagree.

The age of nuclear power in American might be coming to an end, but that's because of stupidity and short-sightedness. Also the economy aint the greatest. The technology itself is so superior to anything else out there, it's not even funny. For large scale power generation nothing even comes close.

If half of what you said was true, for the reasons you suggest, NOBODY would be building or using nuclear power anywhere.

quote:
as if that indicated nuclear power wasn't unsafe.


There is no such thing as an inherently unsafe technology. Only in how it is applied and engineered. The Fukushima plant was engineered poorly, maintained poorly, and ran poorly. It was also built in a VERY high-risk geographical location.


RE: Still the Cheapest
By jwcalla on 8/29/2013 3:17:12 PM , Rating: 2
What percentage of a nuclear power plant's build cost is lost to red tape?


RE: Still the Cheapest
By spaced_ on 8/30/2013 2:15:11 AM , Rating: 2
Gee good question.

One which I'm sure none of the people in this comments section can answer, nor if they found said answer, would wish to tell you as then they might start to see why nuclear is actually just expensive compared to other alternatives.


RE: Still the Cheapest
By spaced_ on 8/30/2013 2:23:54 AM , Rating: 2
If virtually nothing he said was true, why do you have zero data to dispute what he said?

quote:
Hmmm, tell that to France. They might disagree.


http://en.wikipedia.org/wiki/Nuclear_power_in_Fran...

Again. You need to update the wikipedia article bro, looks like France is wrong and you're right.

They're reducing their nuclear power from 75% to 50% because new nuclear plants are more expensive than old ones .

Might be a good idea to get your head out of your arse and look around the world a bit one day.


RE: Still the Cheapest
By AiponGkooja on 9/1/2013 2:06:48 PM , Rating: 2
Did you even read the article? It cites one project as proof of that claim. Did you do your research and look into that project? It happens to be a "first of a kind" design that is requiring more R&D and regulatory changes mid-project, and is taking much longer than anticipated. All combined, those significantly raised the cost of the project. They expect construction time for future projects to be "40% shorter... taking full advantage of the construction experience from both previous projects (citing two others in China)"

The reduction in reliance on Nuclear from 75% to 50% (production) is advocated due to their current plants not being flexible enough to meet demand. During non-peak seasons, they generate MUCH more power than they need, and have to find places to export it to. During peak seasons, they do not generate enough, because they've spent so much time advocating the use of electric space and water heating. They OVER-invested in nuclear, to the point that they tried to find ways to use more power.

ie. They want to reduce the percentage of nuclear supply because it is not ideally suited to meet peak power demand, and they have adopted a lot of wasteful energy consumption practices.

This isn't saying nuclear is bad and too expensive (France still provides extremely cheap power to consumers, and power is their 4th largest export), it's saying that nuclear can't currently meet 100% of consumption needs in a non-wasteful way.

That took me 10 minutes. Research is hard.


RE: Still the Cheapest
By spaced_ on 9/3/2013 7:37:57 AM , Rating: 2
No it cites zero projects as proof of that claim. That project just happens to be super expensive and way over-budget anyway. But nothing to do with my argument.

It does however, cite the fact that France is reducing their nuclear capacity from 75% to 50%. Which is a direct contradiction to what Reclaimer77 was spouting out of his rear end.

If you wish to spend another productive 10 minutes of your time researching, it might be an idea to look up how much electricity generation by fuel type costs nowadays. I've already posted several links to some data.

New nuclear is expensive, mostly because you have to spend billions building a plant. Old nuclear is not so expensive - the plant already exists. This article cites $400mil over 10 years for a 70's plant in Vermont. Far less than building a new plant.

So when do you get your ROI on a new nuke plant? In 30 years? 50 years? Most people can't wait that long. Particularly people who want to make money.

If you can understand, France also needs to import electricity during peak demand due to their over-reliance on nuclear, hence why Germany came to their rescue even after it shut down 8 of it's own nuke plants. This is another of nuclear's many disadvantages and why it's not a silver bullet answer to all things electricity generation related.


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