Tuesday, July 19, 2016

Killing Nuclear, ignoring emissions and avoiding carbon pricing

In Germany, where renewables have mostly replaced nuclear power, carbon emissions are rising, even as Germans pay the most expensive electricity rates in Europe. In South Australia, the all-wind strategy is taking its toll. And in California, the costs of renewables are also apparent. - Eduardo Porter - New York Times
Recently a multitude of exceptional articles have been written on the challenges facing nuclear power plants in the United States, mostly without mentioning an alternative to competing subsidies.

  • A $30/tonne CO2 equivalent price would equate to adding $12-$15 per megawatt-hour on the most efficient natural gas-fired generators. $30 is a familiar figure thrown about in Canada.
  • The United States Government's Interagency Working Group on Social Cost of Carbon has a complex methodology of working out values: using a 4% discount rate they provide a 2016 value of $38/metric ton CO2, but that's in 2007 dollars - it's about $44/t CO2e in 2016 dollars, putting the social cost  per megawatt-hour of natural gas-fired generation at $17.5-$22.5/megawatt hour.
now... to the news

A very educational read is Will Boisvert's Renewables Subsidies Are Killing Nuclear and Threatening Climate Progress, Bloomberg New Energy Finance Study Shows:
Why are nuclear plants going broke? The immediate reason is cheap gas. The plunge in natural gas prices caused a collapse in the price of natural gas-fueled electricity, which has slumped below the production costs of nuclear plants. Bloomberg predicts that in the sprawling PJM grid wholesale prices will be $28.50 per megawatt-hour in 2017, lower than average nuclear production costs of $35.50 per megawatt-hour. Facing losses like that, nuclear utilities are closing up shop.
But the impact of market forces has been worsened by public policy that neglects nuclear power and adds to the pressure it faces. Federal, state and local governments have massively intervened in energy markets to support renewable power with subsidies and mandates, but given virtually no support to existing nuclear plants. These biases tilt the playing field for commercial competitors of nuclear plants.
The $23 per megawatt-hour federal Production Tax Credit for wind farms, for example, can be larger than the total wholesale price nuclear plants get for their power in some regions, according to Bloomberg data. (It’s also larger than the $5-15 per megawatt-hour subsidies Bloomberg reckons nuclear plants need to break even.)
I'll read most anything by Will Boisvert -in English- but I don't see a link to the Bloomberg New Energy Finance Study (nor could I locate it), and there's no mention of carbon pricing.

I mention this partly because of Jigar Shah's Want to Save America's Nuclear Plants? Stop Being a Hater:
...the constant barrage of anti-renewables rhetoric and analysis from the amateur nuclear advocates makes it unlikely to bring nuclear and renewable energy into the same coalition. But that is exactly what is needed. Solar/Wind need nuclear holdouts to continue their march, and the nuclear industry needs friends that know how to lobby effectively for low carbon electricity sources across multiple States.
The article has flaws. I'm not sure if the biggest is, as I note in the comments, avoiding noting why nuclear and renewables are inherently adversarial, or implying 40 TWh a year are at risk in nuclear when the total is far, far greater than that. However, adversaries don't need to denigrate each other, and both might point out the impact natural gas is having on competitiveness is a consequence of pretending carbon reduction is worthwhile without pricing carbon.

Also on Linkedin, Mike Twomey's superb No Country for Old Nukes?
We are left to ponder the consequences of a single-minded focus on supporting renewable energy and a lack of support for the existing nuclear fleet. Even if you disagree about the relative merits of carbon reduction efforts, it is inarguable that additional nuclear plant retirements will lead to increased CO2 emissions. Moreover, the increased dependence on natural gas-fired resources reduces fuel diversity and exposes customers to potential price volatility. An important additional fact to recognize is that, once a nuclear plant retires, there is no opportunity to bring that plant back into service (it is not technically impossible, but it is infeasible from a regulatory standpoint and an economic perspective).

If we are, through application of a "renewable energy is the only future" rule, moving toward an electric future of increased carbon emissions, less grid reliability, insufficient fuel diversity, and increased consumer prices, then stakeholders (customers, elected officials, businesses, etc.) will be entitled to ask: If the rule you followed brought you to this, of what use was the rule?
Twomey concludes with a reference to New York's proposal to save nuclear power plants - without noting the "subsidy" in that plan caps payment to nuclear power plants below the US social cost of carbon of generating with coal, with an expected payment above market rates lower than the social cost of carbon of generating with gas.

Eduardo Porter's How Renewable Energy Is Blowing Climate Change Efforts Off Course adds international context to the current challenges of US nuclear power plants:
The United States, and indeed the world, would do well to reconsider the promise and the limitations of its infatuation with renewable energy.
“The issue is, how do we decarbonize the electricity sector, while keeping the lights on, keeping costs low and avoiding unintended consequences that could make emissions increase?” said Jan Mazurek, who runs the clean power campaign at the environmental advocacy group ClimateWorks.
Addressing those challenges will require a more subtle approach than just attaching more renewables to the grid.
An analysis by Bloomberg New Energy Finance, narrowly distributed two weeks ago, estimated that nuclear reactors that produce 56 percent of the country’s nuclear power would be unprofitable over the next three years. If they were all to go under and be replaced with gas-fired generators, an additional 200 million tons of carbon dioxide would be spewed into the atmosphere every year.
The economics of nuclear energy are mostly to blame. It just cannot compete with cheap natural gas. Most reactors in the country are losing between $5 and $15 per megawatt-hour, according to the analysis.
yes - most could be losing less than the social cost of carbon emissions from generating with natural gas while pricing is low due to the low market price of natural gas.

But again, that's not mentioned.

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