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“Nuclear War Against The Future” May Delay … But Will Not Stop … The Rise Of Renewables, Energy Efficiency, And 21st Century Technology
Expert: Pandering to Nuclear in EPA Clean Power Plan, IL and NY Bailouts of Exelon, and FirstEnergy Reactor Prop-up Plan in OH, Only Postpone the Transformation of the Electricity Sector… at Considerable Expense to Ratepayers
WASHINGTON, D.C. – June 17, 2015 – The 20th Century model of large baseload electricity generation, including nuclear reactors, is in an irreversible decline in the face of the emerging 21st Century decentralized power model relying on renewables, energy efficiency, and technology-based demand management, according to a new report by Mark Cooper, senior fellow for economic analysis, Institute for Energy and the Environment, Vermont Law School.
The Cooper report, “Power Shift: The Deployment of a 21st Century Electricity Sector and the Nuclear War to Stop It,” is available online at http://www-assets.vermontlaw.edu/Assets/iee/Power_Shift_Mark_Cooper_June_2015.PDF.
For policymakers and ratepayers, Cooper’s stark conclusion means that last-ditch efforts to prop-up nuclear power with amendments to the EPA Clean Power Plan, state-level subsidies (e.g., Exelon’s “nuclear blackmail” threat of Illinois lawmakers over five reactors in that state and FirstEnergy’s bailout scheme involving the Davis-Besse reactor in Ohio), attacks in Indiana, Ohio, Nevada, North Carolina and other states on renewable energy standards, and preferential rate-setting arrangements (e.g., Exelon’s Ginna reactor at Rochester, New York) are costly detours on the road to a much more consumer friendly, reliable and sustainable low-carbon electricity sector.
Dr. Mark Cooper, senior fellow for economic analysis, Institute for Energy and the Environment, Vermont Law School, said: “Nuclear reactors old and new are far from a necessary part of a low-carbon solution. Nuclear power, with its war against the transformation of the electricity system, is part of the problem, not the solution. Following a path toward a 21st century electricity system poses no serious threat to reliability up to a 30-40 percent level. Beyond that, we already know the specific actions that can carry the system to much higher levels of reliance on renewables. Combining these measures which allow the system to operate at high levels of penetration with the implementation of aggressive efficiency measures meets 80 percent of ‘business as usual’ or base case demand. It is no longer a question of if this will happen, only when it will happen.”
Stephen Thomas, professor of Energy Policy, Public Services International Research Unit, Business School, University of Greenwich (UK), said: ‘Renewables and energy efficiency are options that are on a downward cost-curve, and when given the chance, prove themselves highly cost-effective. The major barrier to the take-up of these is the credulity of policy-makers to new, ever more unrealistic claims for new nuclear technologies and the self-interest of large utilities of promoting large technologies because they insulate them from competition from new dynamic companies. Mark Cooper’s timely report sets out the evidence of the failure of the old technologies and the huge strides small decentralized solutions are making.”
Key conclusions in the Cooper report include the following:
– Even with tinkering, the EPA Clean Power Plan will not save nuclear power. “After decades of claiming to be a low-cost source of power because of low operating costs, aging reactors are no longer cost competitive even in that narrow view of operating cost. Not even the full implementation of the EPA Clean Power Rule would save aging reactors from early retirement, so the owners of those reactors have launched a major campaign to increase revenues with direct subsidies from state and federal policymakers and secure jerry-rigged market pricing rules that undermine alternatives.”
– The Exelon reactor bailout schemes in New York State and Illinois will not work. “Ginna is a New York reactor and Quad Cities is a two-reactor site in Illinois for which Exelon has stated specific revenue increases are needed, although these estimates are shrouded in uncertainty. The operating costs are quite high and total costs are higher still, well above recent market clearing prices … Operating costs alone are almost twice the current market clearing price of electricity and … things are likely to get worse rather than better over time … [S]hould policy makers choose to keep nuclear with its uneconomic costs in the low-carbon portfolio would be to saddle Illinois ratepayers with permanent, increasing subsidies for aging reactors. The frantic push for states to bail out these reactors when a response at the regional level is more appropriate (if a reaction is needed at all) will saddle state ratepayers with much larger burdens.”
– The FirstEnergy push to bail out its antiquated central station coal and nuclear fleet in Ohio is “Ground Zero” in the nuclear war on the future. “Each of the strategies Exelon has pursued to bail out its nuclear plants has been magnified by FirstEnergy in its efforts to bail out its coal and nuclear facilities. FirstEnergy has taken the war against the future further at the state and regional levels by actively reducing the level of resources available: it led the effort to reduce the commitment to renewables and efficiency in Ohio and is actively seeking to implement that reduction on its system; it withheld demand resources from the regional power pool by refusing to bid them into the market. This doubled the market clearing price and raised the cost to consumers by hundreds of millions of dollars. In essence, First Energy is seeking to create a crisis of reliability by driving resources out of the market so that more centralized resources are needed.”
– Rigged market prices based on “unfair” competition mask the underlying problem with nuclear power. “Utilities in New York,Illinois, and Ohio have asked for above market prices for six reactors. These reactors have lost hundreds of millions of dollars over the last couple of years, but the nuclear utilities claim that the low price of gas is the cause of the problem. This is incorrect in three respects. First, the rising cost of operating reactors accounts for about a third of the problem. Second, the addition of wind, which backs inefficient gas out of the market clearing price, contributes to the shift. And third, demand for nuclear has declined due to increased efficiency. The price of gas matters, too, but less than the other three factors. Two-thirds of the revenue shortfall that aging reactors are experiencing has nothing to do with natural gas prices. The bulk of the problem is caused by the rising cost of keeping nuclear reactors online, the superior economics of renewables, and the attractiveness of efficiency.”
The Cooper report also concludes:
– More renewables are feasible without creating reliability issues. “In the mid-term, expansion of renewables to the 30–40 percent range can be easily accommodated with the existing physical assets and management tools with no negative impact on reliability. The electricity system only needs to be operated with policies that allow the renewables to enter. In the long-term, a wide range of measures to support the penetration of alternatives to much higher levels (80 percent or more) has been identified. Building an electricity system on principles of dynamic flexibility requires an institutional transformation and the deployment of supporting physical infrastructure. Given the need to respond to climate change and the cost of the alternatives, the 21st century model for the electricity system is the least-cost approach by a wide margin”.
– Wind energy is prevailing on its own terms even as nuclear power is failing. “In contrast to the increasing operating costs of nuclear reactors, operating costs for wind have been declining. In the mid-1990s nuclear reactors would have been dispatched before wind with a substantial operating cost advantage. Two decades later, wind has a substantial advantage which is likely to grow in the years ahead. Thus, it is not coal, gas, and subsidies that are giving aging nuclear reactors heartburn, it is the superior economics of wind and efficiency combined with the increasing operating costs of aging nuclear reactors that has made the aging reactors uneconomic.”
– Efforts to block solar energy in state legislatures will only delay the inevitable. “… [T]he Rocky Mountain Institute … presents an analysis that concludes that solar with battery storage will trigger a large wave of ‘grid defection’ in 5 to 10 years. It shows that resistance to this trend by refusing to offer net metering could delay the impact by about a decade, but it will arrive in any event.”
– The orderly exit of nuclear power is achievable … and necessary. “Given the powerful economic trends operating against nuclear power, the retirement of uneconomic aging reactors and the abandonment of ongoing new reactor construction can be a non-event. An orderly exit from nuclear power is not only possible but crucial to ensure a least-cost, low-carbon future that is economically more beneficial, environmentally more responsible and kinder to consumers and the nation.”
In addressing the embattled nuclear industry’s case for itself, Cooper noted: “Pointing out that 60 percent of our current low carbon generation comes from nuclear as a basis for suggesting that nuclear must play a central role in the future decarbonization of the electricity sector is simply wrong as a matter of fundamental economics and totally irrelevant to policy making. The existence of nuclear power is a very old sunk cost and its deployment had nothing to do with decarbonization. The 21st Century electricity system now coming online must be the focus of policy makers who are concerned about what we can do in the future in a deliberate and timely way to reduce carbon and address climate change concerns.”
CONTACT: Alex Frank, (703) 276-3264 or email@example.com.
EDITOR’S NOTE: A streaming audio recording of the news event will be available on the Web as of 4 p.m. EDT on June 17, 2015 at http://bit.ly/nuclearwaronfuture.