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Plan for closing Diablo Canyon Nuclear Plant to save money and carbon

Diablo Nuclear Earthquake Hazard USGSClosing Diablo Canyon Nuclear Plant Will Save Money And Carbon, Forbes, Amory B. Lovins, Cofounder and Chief Scientist, Rocky Mountain Institute,  ablovins@rmi.org,www.rmi.org

A widespread claim—that dozens of nuclear plants, too costly to run profitably, now merit new subsidies to protect the earth’s climate—just collided with market reality.

The CEO of one of America’s most prominent and technically capable utilities, Pacific Gas & Electric Company—previously chairman of the Nuclear Energy Institute and the Edison Electric Institute—just announced its decision (subject to regulatory approvals) to close PG&E’s well-running twin nuclear reactors at Diablo Canyon because they’re uneconomic and won’t be needed.

Unlike previous nuclear shutdowns, some of which were too abrupt for immediate replacement with carbon-free resources, PG&E’s nuclear output will be phased out over 8–9 years, replaced timely and cost-effectively by efficiency and renewables. That means no more fossil fuel burned nor carbon emitted, all at less cost to ratepayers. How much less? Natural Resources Defense Council (NRDC) says at least $1 billion (net present value to 2044).

PG&E also agrees that removing the inflexible “must-run” nuclear output, which can’t easily and economically ramp down much, will help integrate more renewable power reliably into the grid. Midday solar, rather than being increasingly crowded out by continued nuclear overgeneration, will be able to supply more energy. As Germany found, integrating varying solar and windpower with steady “baseload” plants can present challenges for the the opposite of the reason originally supposed: not because wind and solar power vary (demand varies even less predictably), but because “baseload” plants are too inflexible.

The big economic lesson here is that nuclear power’s ability to displace fossil-fueled generation is not simply about tons of carbon dioxide saved. Nuclear power also incurs an operating cost that for many reactors, including Diablo Canyon, has become very high. Saving and reinvesting that avoidable cost can buy a larger quantity of cheaper carbon-displacing resources, saving even more carbon. Nearly all commentators, even Bloomberg’s astute editorial board(twice), have overlooked this advantageous swap.

As the Italian proverb says, arithmetic is not an opinion. So let’s do the math.

Renewables and efficiency cost less than operating many nuclear plants

Diablo Canyon’s forward operating cost, about $70/MWh (levelized 2014 $), is in the top quartile of the national nuclear fleet according to the industry’s latest published data. That quartile’s national average operating cost in 2010–12 averaged $62/MWh in 2013 $. (These operating costs include major repairs, called Net Capital Additions, that tend to rise in the aging fleet, but they exclude all charges for the original construction cost and its financing.)

But carbon-free replacements cost far less. In California, windpower and utility-scale photovoltaics cost around $30–50/MWh to build and run. U.S.-average renewables cost roughly $10/MWh less than in California. Here are their empirical market prices:……..

Saving carbon by closing uneconomic reactors…….

Propaganda meets reality 
PG&E’s historic proposal contradicts each key premise of the crusade for more subsidies to avert the shutdown of uncompetitive nuclear plants. Most prominently, PG&E’s resource plan is designed specifically to get carbon-free replacements online to displace nuclear output before it’s turned off—not to substitute fossil fuels, as critics are vehemently assuming (as if they hadn’t read the proposal)……… http://www.forbes.com/sites/amorylovins/2016/06/22/close-a-nuclear-plant-save-money-and-carbon-improve-the-grid-says-pge/:

June 27, 2016 - Posted by | business and costs, climate change, USA

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