ATLANTA — While Georgia Power is building the nation’s first commercial nuclear reactors in three decades outside Augusta, other utilities are shutting down their nuclear plants, creating confusing industry trends.
The reason given for both is the same: economics.
Opponents of nuclear energy point to the closures as proof that it isn’t a viable way to generate electricity. Supporters say circumstance, not sound policy, is behind the trend of closures.
It makes for a confusing time for electricity customers and regulators. Georgia’s Public Service Commission must vote next month on Georgia Power’s request to bill its customers $175 million for the engineering to construct a nuclear plant in Stewart County south of Columbus on the Chattahoochee River. Approval of an actual plant would be years away.
“Some of the issues surrounding the nuclear fleet in the rest of this country are not surrounding operating capabilities,” said Stan Wise, the longest-serving member of the Public Service Commission. “It’s how the regulatory scheme is working in some of these supposedly deregulated states where there’s no compensation for the low fuel costs that the fleet has, where there’s no process to pay for the environmental benefits of existing nuclear power.”
Those states set shortsighted policies that give utilities the incentive to use natural-gas plants instead, according to David McKinney, the vice president of nuclear development at Southern Nuclear Operating Co., the Georgia Power sister company that runs the plant. If gas prices rise or if the federal government imposes a carbon tax or other more stringent pollution regulations, those utilities will have trouble complying after eliminating the nuclear option, he said.
“Those customers are not going to have a diverse generating fleet,” he said during a hearing Tuesday to update the commission about construction at Plant Vogtle.
Wise predicted that not only would electricity prices rise then, but that reliability would fall when gas pipelines can’t keep up with demand, leading to rolling blackouts as have been seen in California, Germany and other places that have turned away from nuclear power.
Overhead cost is another factor, added Jeremiah Haswell, Georgia Power’s nuclear development regulatory manager.
“Some of these plants are small, single-unit plants as well,” he said. “It’s harder for them to spread their operating costs.”
VOGTLE WILL BE THE nation’s largest nuclear plant when construction is complete and all four reactors are operating. Georgia Power economists estimate it will cost $2.8 billion less than building gas-fired generators.
On the other extreme is Fort Calhoun Station, the nation’s smallest nuclear plant on the Missouri River 19 miles north of Omaha, Neb. Its single reactor puts out less than half the electricity of any one of Vogtle’s. Yet it has to have the same safety, training and security measures.
Last month, the chairman of the Omaha Public Power District, Mick Mines, recommended shutting it down, saying an analysis showed its continued operation wasn’t financially sustainable.
“The analysis considered market conditions, economies of scale and the proposed Clean Power Plan,” Burke told the board.
The Obama administration’s Clean Power Plan has been halted temporarily by the U.S. Supreme Court, but if allowed to proceed, it would force states to reduce carbon emissions below set limits. Reductions from Vogtle’s two new reactors will count toward Georgia’s limits, but utilities say it puts existing nuclear plants at a disadvantage by not giving credit for their emission-free generation.
Exelon Corp., the country’s largest operator of nuclear plants, announced June 2 that it is closing three Illinois reactors at two plants. The company said it has lost $800 million over the past seven years on them, despite them being among their best-performing plants.
The deregulation model used in states such as Illinois rewards utilities for buying the cheapest power from third-party producers. While nuclear fuel is comparatively inexpensive, those overhead expenses are greater at nuclear plants now that fracking has dropped the price of natural gas to historic lows and technical improvements have made solar power less than a quarter of what it cost just a few years ago.
Shortsighted policy is skewing the economics, according to Marvin Fertel, the president of the Nuclear Energy Institute, an industry trade group.
“At-risk nuclear plants are struggling because the electricity markets do not appropriately value the attributes of nuclear plants, including reliable electricity generation and their carbon-abatement value,” he said.
Georgia’s regulators say they want to avoid that approach. All of them often state their support for nuclear power as part of a diverse portfolio because it is emission-free and available 24 hours a day, unlike solar and wind.
IF SMALL REACTORS are struggling financially, many in the industry think even smaller reactors could be viable – so-called small modular reactors.
These could be built in a factory and then trucked to a site the size of a home improvement store instead of the thousands of acres needed for a traditional nuclear plant and years of costly construction. According to one maker, NuScale Power, these reactors are flexible enough that they can be turned on and off quickly enough to fill in the gaps of solar and wind, effectively freeing renewables from the whims of Mother Nature and overcoming one the their major obstacles.
Another benefit is their size means they will not flood the market with electricity the way large nuclear plants do, notes University of Texas postdoctoral fellow Robert Fares in Scientific American.
The Tennessee Valley Authority submitted the nation’s first SMR application to the U.S. Nuclear Regulatory Commission last month.
Georgia Power executives are considering SMRs. They won’t decide until the end of this year what kind of plant they’ll build on their Stewart County land, noting that a major gas pipeline passing through it gives them the option of a gas-fired plant if they don’t go nuclear.