nuclear-news

The R Street Institute, a Washington, D.C.-based think tank, on Oct. 6 published a “sober assessment” of the risk exposure of 29 merchant nuclear power plants in competitive wholesale markets. The study examined the operations and maintenance, or O&M, costs and day-ahead pricing of those plants and five other nuclear power plants that recently closed or have announced their retirements.

“[W]hile natural gas certainly has affected the industry by putting a ceiling on prices, the facilities that are closing are ones located in areas with considerable transmission constraints, that have required significant and unexpected capital investments to extend their operational life or where closure has been a response to heightened regulatory oversight,” R Street energy policy director Catrina Rorke found.

Rorke did not find any substantial risk that ISO New England Inc.‘s two remaining nuclear plants that have not yet announced plans to shutter may have to do so, nor any “widespread closure risk” for PJM Interconnection LLC‘s 16 remaining nuclear plants.

However, she did find that four out of the five nuclear plants in the Midcontinent Independent System Operator Inc.‘s market already have O&M costs above day-ahead price signals and are at risk of closing. Those plants are NextEra Energy Inc.‘s majority-owned Duane Arnold Energy Center in Iowa and its wholly-owned Point Beach unit in Wisconsin, as well as DTE Energy Co.‘s Fermi plant and Entergy’s Palisades plant, both of which are in Michigan.

In Electric Reliability Council of Texas Inc.‘s market, Luminant Generation Co. LLC‘s Comanche Peak plant and the South Texas Project, which is partially owned by NRG Energy Inc., CPS Energy and others, are also at risk of closure because of a narrow margin between O&M costs and the hub price. However, the report said ERCOT’s use of scarcity pricing during supply shortages could provide enough payments to keep them operational.

In addition, the analysis singled out Exelon Corp. and EDF Group‘s jointly-owned R.E. Ginna in the New York ISO as operating at a loss for every megawatt-hour generated. Ginna is one of three nuclear plants that are expected to be subsidized under Gov. Andrew Cuomo’s clean energy standard.

The study’s findings questioned if industry wide interventions, such as creating subsidies or including the price of carbon within electricity markets, are needed to prevent further early retirements as many within in the nuclear energy industry desire. New York earlier this year approved a subsidy for three at-risk nuclear power plants that could amount to almost $7.6 billion over 12 years. Supporters claim that the alternative of allowing those plants to retire early would still be more costly for both ratepayers and the environment.

As for the recent closures or announced retirements, Rorke found that those nuclear power plants also had “substantial additional financial challenges beyond natural-gas prices.”

“Transmission congestion and large capital expenditures have been the two factors that tip the scales in favor of retirements,” the study concluded……..https://www.snl.com/Interactivex/article.aspx?CdId=A-37975535-11048