Exelon CEO sees brighter future for nuclear energy
Christopher Crane said market dynamics are better than a few months ago for a handful of Exelon nuclear energy units that have been losing money
Improved forward power prices and an increased appreciation for baseload power following the polar vortex have provided encouraging signs for about five nuclear units that had been losing money, Crane told reporters following a presentation to Resources for the Future (RFF) a policy research organization in Washington, D.C.
Crane had said in February that the company might have to make a decision by year’s end on whether to retire certain reactors. During his visit to Washington, Crane said the situation had improved somewhat and no announcement on any unit retirements is imminent.
“But everything we have seen in the past couple of months” is more encouraging for at least most of the money-losing units, Crane said. The CEO did not identify the five units.
Crane hopes that the upcoming Environmental Protection Agency (EPA) rollout of greenhouse gas emission standards for power plants can give rise to an intelligent policy discussion about all types of energy in a carbon-constrained environment.
“Retirement of what we call the Eisenhower era coal plants will help improve the economics of not only the nuclear fleet but also the clean, large coal units,” Crane said. Some of the old fossil plants have a marginal price of $20/MWh and that's very low, Crane noted.
“Having clean coal and nuclear setting the price will help secure … a better pricing regiment,” Crane said.
Just competing with natural gas, without a carbon levy, you need a "longrun" $13/mmBtu natural gas price, to justify building a new nuclear plant in most situations. So look for most new generation to be fueled by natural gas, Crane said.
Looking a decade out, Crane is encouraged about the potential of small modular reactor (SMR) technology.
SMRs could slash the lead time and capital investment needed for new nuclear power.
Crane and Exelon have made trade press headlines in recent times being critical of the production tax credit (PTC) for wind power. This tax credit was meant to give wind power in the marketplace. Given that the domestic wind fleet now accounts for about 60 GW, it has gotten a good jump start, Crane said.
Crane did say that Exelon is participating in a pilot program, with the Department of Energy (DOE) to examine if its Peach Bottom nuclear plant could conceivably run a total of 80 years.
The dual-unit 1970s vintage Peach Bottom plant in Pennsylvania has already had its license extended from 40 to 60 years. Aside from any infrastructure upgrades, extending the license an additional 20 years would cost many millions of dollars in regulatory costs alone, Crane said.
“If the intent is for us to have a low-carbon future” then the market needs diverse sources. Power grids cannot really on intermittent renewable sources alone, Crane said.
Crane said that carbon dioxide emissions in California spiked following retirement of the Edison International San Onofre Nuclear Generation Station (SONGS). That increase in carbon dioxide occurred despite the fact that California has invested so heavily in wind and solar power.