Study: Nuclear plant closures endanger power grid resiliency

Five nuclear plants operating in the PJM region are slated to prematurely retire by 2025

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The PJM Interconnection will likely suffer severe power grid resiliency issues and financial consequences stemming from the retirement of nuclear power plants, according to a report by IHS Markit.

PJM operates the world’s largest competitive wholesale electricity market and coordinates the movement of wholesale electricity in all or part of 13 Mid-Atlantic and Midwest states, as well as the District of Columbia.

The IHS report reinforces a recent announcement by PJM regarding the critical need to value fuel security in the region. The 19 existing nuclear power plants in PJM are a cost-effective, emission-free source of electric energy and capacity, diversifying the PJM power supply portfolio.

However, five nuclear plants operating in the PJM region are slated to prematurely retire by 2025, including Oyster Creek Nuclear Generating Station (New Jersey), Three Mile Island (Pennsylvania), Beaver Valley Nuclear Power Station (Pennsylvania), Davis-Besse Nuclear Power Station (Ohio) and Perry Nuclear Generating Station (Ohio). IHS’s report estimates the following impacts on the 65 million customers across PJM due to these nuclear generating plant closures, and their subsequent replacements:

· Less resilient PJM capacity availability, especially during extreme weather events;

· Nine-18 percent cost increases in the average retail price of electricity for PJM customers;

· 100 million additional metric tons of CO2 emissions released into the atmosphere each year (added emissions equal to two-thirds of the vehicles on the road in the PJM region today);

· Annual environmental costs of $4.3 billion due to the increase in CO2 emissions;

· A total decline in consumer annual net benefit from PJM grid-based electricity of $5-12 billion per year;

· The bottom line is that the uneconomic retirement and replacement of PJM nuclear power plants reduces the consumer annual net benefit from PJM grid-based electricity by about $8 billion per year over 2013–16. This translates into a consumer net benefit per kilowatt-hour of PJM nuclear generation of about 3 cents per kWh.

The report concludes: “The primary finding of this analysis is that the 65 million consumers who rely on PJM grid-based power supply are better off if something is done to prevent the uneconomic closures of PJM nuclear resources because the PJM power supply portfolio is more efficient, more resilient, and environmentally responsible with the continued contribution of cost-effective nuclear resources.”

Throughout, the report warns that current public policy and market trends can cause market distortions, reduce power supply resilience and wreak environmental havoc in PJM. Similar comparisons can be made to Germany, for example, where decisions to begin closing nuclear facilities in 2011 have increased coal emissions and helped force the official abandonment of their 2020 climate goals.

The report also reviewed consumer sentiment in regards to energy reliability and reexamined the role of nuclear energy during the 2014 “polar vortex” and 2017/2018 “bomb cyclone,” finding that:

· Since the polar vortex, 8,922 MW of coal-fired capacity and the 608 MW Oyster Creek, 837 MW Three Mile Island, 908 MW Davis-Besse, 1,268 MW Perry, and 1,872 MW Beaver Valley nuclear plants announced plans for closure;

· In the PJM region, the extreme cold weather caused by the 2014 “polar vortex” did not reduce available nuclear capacity below its expected net dependable level, while it did reduce the available natural gas-fired capacity by 27 percent from the net dependable level;

· In the PJM region, during the 2017/2018 “bomb cyclone”, 35 percent of installed PJM capacity consisting of natural gas–fired resources accounted for 59 percent of the total PJM capacity power outages that drove a significant forced outage rate earlier this year;

· The bomb cyclone episode indicates that if the PJM net dependable nuclear capacity had been replaced by an equivalent amount of net dependable natural gas–fired capacity and the gas supply infrastructure had also been proportionately expanded to provide the same natural gas–fired capacity availability factor as experienced during the bomb cyclone, then the available capacity on 7 January 2018 would have been 5.2 GW lower. Therefore, under these conditions, PJM would have had to exercise the remaining emergency operating procedures and would likely have been pushed beyond its limits and forced to shed load during the bomb cyclone.

In order to predict the impact of future uneconomic nuclear plant closures, the report draws from a backcasting assessment. The assessment specifically reviews supply and demand interactions at a monthly frequency for 2013-2016, with the removal of the Oyster Creek nuclear power plant given its pending closure, as compared to a scenario in which all remaining 18 PJM nuclear power plants are uneconomically closed and replaced with other power generating sources during the same time frame. The assessment shows that closures result in higher production costs, higher retail power price levels as well as a greater reliance on natural-gas fired generation sources that increases PJM’s exposure to natural gas price variation.

“The premature closure of nuclear facilities alongside the prospect of additional scheduled closures in the near future highlights the frightening disparities between public policy, the future of our energy grid and ultimately the needs of 65 million people,” said Nuclear Matters Advocacy Council Member and former Senator Judd Gregg (R-NH). “The fact is, the need for a diverse, resilient, reliable and cost-effective energy supply will remain essential, particularly when extreme weather hits – as we’ve seen again and again over the last several years. This report adds to a growing chorus of experts and in-depth studies which underline the environmental and resilience value of nuclear energy in this country, specifically in the vital PJM region. Whether it’s in New England, Ohio, Pennsylvania, or elsewhere, the time for policymakers and regulators to take steps to avoid further damage to our energy supply – and the millions who depend on it – is well overdue.”

“The fact is that taking carbon-free power offline, like our existing nuclear plants, will force an increase in carbon pollution from other sources as we make up the difference,” said Nuclear Matters Advocacy Council Member and former Environmental Protection Agency Administrator Carol M. Browner. “This report estimates that taking these plants offline will generate an increase of 100 million additional metric tons of carbon pollution – a number that should concern anyone interested in mitigating the impacts of climate change. If we are serious about reducing carbon pollution and addressing climate change, we need to preserve the carbon-free power generation from our existing nuclear plants and to advance the development of clean, renewable sources of energy like wind and solar.”

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