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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The $1 trillion bipartisan draft infrastructure bill wending its way through Congress contains about $6 billion to support economically struggling nuclear power plants, but it's not enough, and not in time, to save two economically challenged nuclear plants in Illinois -- the Byron Nuclear Power Station and the Dresden Nuclear Power Station -- from closing in September and November, respectively, according to Exelon Corporation (NYSE:EXC) (Chicago, Illinois).
In a statement emailed to S&P Global Platts, Exelon spokesperson Paul Adams said, "While we remain encouraged by growing support in Congress to preserve nuclear energy to help combat climate change, the provisions currently under consideration in the Senate infrastructure bill do not provide the policy and funding certainty we need, and could take months or even years to come to fruition, if at all."
Byron is a two-unit plant with 2,300 megawatts (MW) of combined generation. It started operating in 1985. Dresden also is a two-unit facility that came online in 1970; it has a combined generating capacity of 1,734 MW. Both plants are located in northern Illinois.
While watching the infrastructure debate unfold in Washington, D.C., Exelon has its corporate eye trained closer to home -- the Illinois legislature and governor -- as the fate of those two nuclear plants ticks down.
"With no signs of a breakthrough on clean energy legislation in (Illinois capitol city) Springfield, we have no choice but to take these final steps in preparation for shutting down the plants," Exelon Generation Chief Nuclear Officer Dave Rhoades said in a statement issued July 28. He was referring to ongoing negotiations in the Illinois legislature over an energy bill that contains hefty subsidies for Exelon. "We will never stop fighting for policies to preserve Illinois' nuclear fleet, knowing that the minute these plants close, our customers will experience dirtier air and higher energy costs. But with time running out, we must plan for the future and do everything we can to prepare our employees and the communities they serve for what lies ahead."
In a statement last August, the company said it would close Byron and Dresden in the fall of 2021, at the end of their current nuclear-fuel cycles, unless the state came across with financial support that recognized the value of non-emitting resources like nuclear power plants. The utility said those two plants were hundreds of millions of dollars in the red, a victim of declining energy prices in the PJM market. Low-cost natural gas and continued declines in the price of renewable energy made Byron and Dresden uncompetitive, it said.
A ruling last year from the Federal Energy Regulatory Commission (FERC) further damaged nuclear power's competitiveness, Exelon said, because it "undermine(d) longstanding state clean energy programs and gives an additional competitive advantage to polluting energy sources" in auctions held in organized transmission markets like PJM.
Beyond this fall, Exelon's statement from last August said two other struggling nuclear plants in Illinois -- Braidwood and LaSalle -- also are "at high risk for premature closure" unless they, too, received subsidies.
The Braidwood Nuclear Power Station began generating electricity in 1988. It is a two-unit plant with combined generating capacity of 2,360 MW. The LaSalle Nuclear Power Station, with 2,277 MW of generating capacity, began operating in 1984. Both are located in northern Illinois.
Exelon has played -- and won -- this high-stakes game of nuclear chicken before. For more on deals Exelon has struck to keep other nuclear plants operating, see June 11, 2019, article - State-level Nuclear Subsidies: Yes, No and Maybe; December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants; and August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation.
Last week, Exelon filed Post Shutdown Decommissioning Activities Reports (PSDARs) for Byron and Dresden with the U.S. Nuclear Regulatory Commission (NRC). News reports say Byron will stop producing electricity by September 21. The exact date in November when Dresden will stop generating electricity has not been released.
Byron and Dresden could be kept open if Illinois passes an energy bill reportedly containing between $600 million and $700 million in financial support for three struggling Exelon nuclear plants: Byron, Dresden and Braidwood. That bill has been the subject of a pitched battle in the state legislature, partly because it also would force the closure of the Prairie State Energy Campus, one of the last large coal-fired power plants built in the U.S.
Prairie State, located in southern Illinois, is a two-unit, 1,630-MW coal-fired plant that began operating in 2012. The Illinois governor's energy proposal would close Prairie State by 2035. Gas-fired power plants in the state would be closed by 2045, according to news reports.
Approximately 54% of the state's electricity comes from nuclear generators, and those plants account for about 85% of the state's carbon-free generation. In 2019, the state committed to decarbonize its electricity supply by 2025, in accord with the Paris Agreement. Exelon's August 2020 statement said the state has achieved about 85% of its decarbonization goals, but the closure of four economically challenged Illinois nuclear plants (Dresden, Byron, Braidwood and LaSalle) would mean higher reliance on electric generators that emit carbon and other pollutants. The closure of those four plants would reverse the state's progress, leaving it at only 20% of its 2025 goals, Exelon estimated.
In its statement last week, Exelon said: "PJM, the regional grid operator, has confirmed that both plants (Byron and Dresden) can retire without putting overall grid reliability at risk. However, the massive loss of in-state clean generation means Illinois will have to rely more on fossil energy located in environmental justice communities and in surrounding states to meet the needs of Illinois homes and businesses. Increased production from fossil plants will increase carbon and other harmful emissions, and force Illinois consumers to support jobs in other states through their energy bills."
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.
In a statement emailed to S&P Global Platts, Exelon spokesperson Paul Adams said, "While we remain encouraged by growing support in Congress to preserve nuclear energy to help combat climate change, the provisions currently under consideration in the Senate infrastructure bill do not provide the policy and funding certainty we need, and could take months or even years to come to fruition, if at all."
Byron is a two-unit plant with 2,300 megawatts (MW) of combined generation. It started operating in 1985. Dresden also is a two-unit facility that came online in 1970; it has a combined generating capacity of 1,734 MW. Both plants are located in northern Illinois.
While watching the infrastructure debate unfold in Washington, D.C., Exelon has its corporate eye trained closer to home -- the Illinois legislature and governor -- as the fate of those two nuclear plants ticks down.
"With no signs of a breakthrough on clean energy legislation in (Illinois capitol city) Springfield, we have no choice but to take these final steps in preparation for shutting down the plants," Exelon Generation Chief Nuclear Officer Dave Rhoades said in a statement issued July 28. He was referring to ongoing negotiations in the Illinois legislature over an energy bill that contains hefty subsidies for Exelon. "We will never stop fighting for policies to preserve Illinois' nuclear fleet, knowing that the minute these plants close, our customers will experience dirtier air and higher energy costs. But with time running out, we must plan for the future and do everything we can to prepare our employees and the communities they serve for what lies ahead."
In a statement last August, the company said it would close Byron and Dresden in the fall of 2021, at the end of their current nuclear-fuel cycles, unless the state came across with financial support that recognized the value of non-emitting resources like nuclear power plants. The utility said those two plants were hundreds of millions of dollars in the red, a victim of declining energy prices in the PJM market. Low-cost natural gas and continued declines in the price of renewable energy made Byron and Dresden uncompetitive, it said.
A ruling last year from the Federal Energy Regulatory Commission (FERC) further damaged nuclear power's competitiveness, Exelon said, because it "undermine(d) longstanding state clean energy programs and gives an additional competitive advantage to polluting energy sources" in auctions held in organized transmission markets like PJM.
Beyond this fall, Exelon's statement from last August said two other struggling nuclear plants in Illinois -- Braidwood and LaSalle -- also are "at high risk for premature closure" unless they, too, received subsidies.
The Braidwood Nuclear Power Station began generating electricity in 1988. It is a two-unit plant with combined generating capacity of 2,360 MW. The LaSalle Nuclear Power Station, with 2,277 MW of generating capacity, began operating in 1984. Both are located in northern Illinois.
Exelon has played -- and won -- this high-stakes game of nuclear chicken before. For more on deals Exelon has struck to keep other nuclear plants operating, see June 11, 2019, article - State-level Nuclear Subsidies: Yes, No and Maybe; December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants; and August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation.
Last week, Exelon filed Post Shutdown Decommissioning Activities Reports (PSDARs) for Byron and Dresden with the U.S. Nuclear Regulatory Commission (NRC). News reports say Byron will stop producing electricity by September 21. The exact date in November when Dresden will stop generating electricity has not been released.
Byron and Dresden could be kept open if Illinois passes an energy bill reportedly containing between $600 million and $700 million in financial support for three struggling Exelon nuclear plants: Byron, Dresden and Braidwood. That bill has been the subject of a pitched battle in the state legislature, partly because it also would force the closure of the Prairie State Energy Campus, one of the last large coal-fired power plants built in the U.S.
Prairie State, located in southern Illinois, is a two-unit, 1,630-MW coal-fired plant that began operating in 2012. The Illinois governor's energy proposal would close Prairie State by 2035. Gas-fired power plants in the state would be closed by 2045, according to news reports.
Approximately 54% of the state's electricity comes from nuclear generators, and those plants account for about 85% of the state's carbon-free generation. In 2019, the state committed to decarbonize its electricity supply by 2025, in accord with the Paris Agreement. Exelon's August 2020 statement said the state has achieved about 85% of its decarbonization goals, but the closure of four economically challenged Illinois nuclear plants (Dresden, Byron, Braidwood and LaSalle) would mean higher reliance on electric generators that emit carbon and other pollutants. The closure of those four plants would reverse the state's progress, leaving it at only 20% of its 2025 goals, Exelon estimated.
In its statement last week, Exelon said: "PJM, the regional grid operator, has confirmed that both plants (Byron and Dresden) can retire without putting overall grid reliability at risk. However, the massive loss of in-state clean generation means Illinois will have to rely more on fossil energy located in environmental justice communities and in surrounding states to meet the needs of Illinois homes and businesses. Increased production from fossil plants will increase carbon and other harmful emissions, and force Illinois consumers to support jobs in other states through their energy bills."
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.
