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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The premature retirement of the nation's oldest nuclear power plant, and an executive's recent acknowledgement that another nuclear plant could close well before its license expires, rekindled the "Who's Next?" guessing game regarding which other nuclear plants could retire prematurely.
The Oyster Creek Nuclear Power Station, the nation's oldest nuclear plant, last month agreed to shut down this October, 14 months before it was required to do so. In 2010, the plant's owner and operator, a unit of Exelon Corporation (NYSE:EXC) (Chicago, Illinois), agreed to close the New Jersey plant by yearend 2019 to avoid having to install a costly cooling system. The 49-year-old plant has been using a "once through" cooling system, but New Jersey regulators asserted water discharged from the plant warmed Barnegat Bay, hurting the ecosystem.
On February 2, Exelon said Oyster Creek, a one-unit, 615-megawatt (MW) boiling water reactor (BWR), was becoming too expensive to operate amid low wholesale power prices. It will close permanently in October.
A few days before Exelon's announcement, the owner of Iowa's Duane Arnold Nuclear Energy Center said the one-unit, 606-MW BWR may close in 2025 when its power supply contract expires. Although the plant is licensed through 2034, John Ketchum, chief financial officer at NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida), told investors and analysts on January 26 he didn't think the plant's main customer would extend the contract once it expired in 2025. He didn't name the customer.
The Duane Arnold plant began generating electricity in 1975. It operates in the Midcontinental Independent System Operator (MISO) (Carmel, Indiana) market, where low natural gas prices and abundant wind generation have pushed down wholesale power prices.
"The low price of natural gas is a challenge to nuclear plants if they only get paid for the electricity they produce, and maybe just a little bit for capacity," Matt Wald, a spokesman for the Nuclear Energy Institute (NEI) (Washington, D.C.), told Industrial Info in an interview. "We think it's important that nuclear plants are compensated for their other attributes: the emission-free baseload power they produce; the fuel diversity they provide; the large number of people they employ, particularly compared to gas-fired power plants; and the state and local taxes they pay."
The combination of inexpensive natural gas, flat electric load growth and the abundance of renewable generation, particularly wind power, has caused nuclear plants in Massachusetts, Vermont, Wisconsin, New York, Nebraska and California to close prematurely in recent years. Some industry observers are wondering which nuclear plant will be the next one forced into early retirement. Owners of nuclear plants in Illinois, New York, Connecticut, New Jersey, Ohio and Pennsylvania have sought, with mixed success, to gain financial support for nuclear units that have become uneconomic or less-profitable. For more on that, see September 17, 2017, article - Will Nuclear Nor'easter Roil New Jersey's Electric Market? and October 4, 2017, article - Electricity Scrum Set to Resume in Ohio Legislature.
The recent decision by the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) to not award subsidies to nuclear power may hasten some of those plant early-retirement decisions. For more on the FERC decision, see January 9, 2018, article - FERC Rejects Awarding Subsidies to Coal and Nuclear Units.
Smaller, one-unit plants are most at risk for early retirement because the smaller plants have a harder time spreading out operations and maintenance costs. There are 24 one-unit nuclear plants operating in the U.S., according to the U.S. Nuclear Regulatory Commission (NRC) (Bethesda. Maryland).
Leaders at FirstEnergy Corporation (NYSE:FE) (Akron, Ohio) have said the nuclear plants owned by the company--Perry, Davis-Bessie and Beaver Valley--likely will close prematurely without financial aid from Ohio and Pennsylvania. For more on that, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support.
Exelon, which owns the 811-MW Three Mile Island Unit 1 in Pennsylvania, last year said it would close that plant on or about September 30, 2019, if it can't win financial support from the state.
Absent financial support from New Jersey and Connecticut, nuclear plants in those states could close, plant owners told Industrial Info.
Beyond those states, one-unit nuclear plants in the heartland, where wind energy is abundant and gas is cheap, also may be at risk. That means plants in Minnesota, Nebraska, Missouri, Michigan and Kansas could be in the cross-hairs.
In addition to the price and availability of natural gas and renewable energy, whether a single-unit nuclear plant continues to operate largely will be a function of the size of the plant, and not whether it is a BWR or a pressurized water reactor (PWR). "There are economies of scale with nuclear power that work against one-unit plants," one industry observer told Industrial Info. "Also, BWR's are actually easier to ramp up and down compared to PWR, which means the boiling-water plants can more readily accommodate a surge of intermittent power than pressurized-water plants."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
The Oyster Creek Nuclear Power Station, the nation's oldest nuclear plant, last month agreed to shut down this October, 14 months before it was required to do so. In 2010, the plant's owner and operator, a unit of Exelon Corporation (NYSE:EXC) (Chicago, Illinois), agreed to close the New Jersey plant by yearend 2019 to avoid having to install a costly cooling system. The 49-year-old plant has been using a "once through" cooling system, but New Jersey regulators asserted water discharged from the plant warmed Barnegat Bay, hurting the ecosystem.
On February 2, Exelon said Oyster Creek, a one-unit, 615-megawatt (MW) boiling water reactor (BWR), was becoming too expensive to operate amid low wholesale power prices. It will close permanently in October.
A few days before Exelon's announcement, the owner of Iowa's Duane Arnold Nuclear Energy Center said the one-unit, 606-MW BWR may close in 2025 when its power supply contract expires. Although the plant is licensed through 2034, John Ketchum, chief financial officer at NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida), told investors and analysts on January 26 he didn't think the plant's main customer would extend the contract once it expired in 2025. He didn't name the customer.
The Duane Arnold plant began generating electricity in 1975. It operates in the Midcontinental Independent System Operator (MISO) (Carmel, Indiana) market, where low natural gas prices and abundant wind generation have pushed down wholesale power prices.
"The low price of natural gas is a challenge to nuclear plants if they only get paid for the electricity they produce, and maybe just a little bit for capacity," Matt Wald, a spokesman for the Nuclear Energy Institute (NEI) (Washington, D.C.), told Industrial Info in an interview. "We think it's important that nuclear plants are compensated for their other attributes: the emission-free baseload power they produce; the fuel diversity they provide; the large number of people they employ, particularly compared to gas-fired power plants; and the state and local taxes they pay."
The combination of inexpensive natural gas, flat electric load growth and the abundance of renewable generation, particularly wind power, has caused nuclear plants in Massachusetts, Vermont, Wisconsin, New York, Nebraska and California to close prematurely in recent years. Some industry observers are wondering which nuclear plant will be the next one forced into early retirement. Owners of nuclear plants in Illinois, New York, Connecticut, New Jersey, Ohio and Pennsylvania have sought, with mixed success, to gain financial support for nuclear units that have become uneconomic or less-profitable. For more on that, see September 17, 2017, article - Will Nuclear Nor'easter Roil New Jersey's Electric Market? and October 4, 2017, article - Electricity Scrum Set to Resume in Ohio Legislature.
The recent decision by the Federal Energy Regulatory Commission (FERC) (Washington, D.C.) to not award subsidies to nuclear power may hasten some of those plant early-retirement decisions. For more on the FERC decision, see January 9, 2018, article - FERC Rejects Awarding Subsidies to Coal and Nuclear Units.
Smaller, one-unit plants are most at risk for early retirement because the smaller plants have a harder time spreading out operations and maintenance costs. There are 24 one-unit nuclear plants operating in the U.S., according to the U.S. Nuclear Regulatory Commission (NRC) (Bethesda. Maryland).
Leaders at FirstEnergy Corporation (NYSE:FE) (Akron, Ohio) have said the nuclear plants owned by the company--Perry, Davis-Bessie and Beaver Valley--likely will close prematurely without financial aid from Ohio and Pennsylvania. For more on that, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support.
Exelon, which owns the 811-MW Three Mile Island Unit 1 in Pennsylvania, last year said it would close that plant on or about September 30, 2019, if it can't win financial support from the state.
Absent financial support from New Jersey and Connecticut, nuclear plants in those states could close, plant owners told Industrial Info.
Beyond those states, one-unit nuclear plants in the heartland, where wind energy is abundant and gas is cheap, also may be at risk. That means plants in Minnesota, Nebraska, Missouri, Michigan and Kansas could be in the cross-hairs.
In addition to the price and availability of natural gas and renewable energy, whether a single-unit nuclear plant continues to operate largely will be a function of the size of the plant, and not whether it is a BWR or a pressurized water reactor (PWR). "There are economies of scale with nuclear power that work against one-unit plants," one industry observer told Industrial Info. "Also, BWR's are actually easier to ramp up and down compared to PWR, which means the boiling-water plants can more readily accommodate a surge of intermittent power than pressurized-water plants."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
