A $6 billion bailout for US nuclear power plants?

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The Palisades Nuclear Generating Station is located near Covert, Michigan, on the eastern shore of Lake Michigan. Photo courtesy of ©Entergy Nuclear, CC by NC-ND 2.0

The massive bipartisan infrastructure bill signed into law in mid-November provided $6 billion for the Department of Energy to establish a civilian nuclear credit program. The program “will help preserve America’s existing nuclear reactor fleet and save thousands of well-paying jobs across the country,” the Department of Energy said, saying the nation’s current reactors are “vital” to achieve climate goals.

The credit scheme began last week and was immediately criticized by nuclear watchdogs who said it could allow some reactors in financial difficulty to operate longer than safe.

It is unclear how many nuclear reactors and jobs, if any, will be saved by the new program. The Department of Energy does not have an estimate. The program will only run through fiscal year 2026, so even utilities that are approved to receive appropriations will have no long-term guarantee of federal assistance. And it appears that the owners of the only three reactors eligible for the first phase of the program have no interest in continuing it.

A key part of the US climate plan. There are currently 93 operating nuclear reactors in the United States. Together, they generate nearly one-fifth of all electricity in the United States and “more than half of our carbon-free electricity,” Energy Secretary Jennifer Granholm said in a statement announcing the program.

The Biden administration is counting on these reactors to help it achieve its climate goals: a carbon-free electricity sector by 2035 and net-zero economy-wide emissions by 2050. Unlike fossil fuel power plants, nuclear reactors do not emit climate-modifying gases during operation.

However, nuclear reactors have struggled economically in recent years as natural gas and renewables have become increasingly affordable. Over the past decade, a dozen reactors have shut down before their operating licenses expired, and more shutdowns are looming. Before the credit program began, the Energy Information Administration projected that the United States would lose about a quarter of its nuclear fleet by 2050.

Which reactors will get credits? The certification and tendering process that has just begun has two parts. First, owners or operators wishing to apply for credits must certify that their reactor is in a competitive electricity market, that the reactor will be forced to shut down for economic reasons, and that the shutdown will result in increased air pollution. ‘air. They will need to provide data, including projected costs and losses, estimates of air pollutants, information on where their uranium fuel comes from (bonus points for reactors that rely more on locally produced uranium) and a detailed plan for how they would maintain operations after the credits — which will be issued for four years — run out.

Applicants must also submit sealed bids in which they request credits based on a price per megawatt-hour, depending on how much help they need to stem their economic losses.

The first round of awards, with applications due May 19, is open to reactors that have already announced their intention to close by September 30, 2026. The second phase of the program will be open to all reactors that can justify economic savings. trials.

Only three reactors fall into the first category: the Palisades reactor in Michigan and the two Diablo Canyon reactors in California. However, spokespersons for the operators of these reactors say the credit program will not change their shutdown plans.

Inspector performing a security check at the Palisades Nuclear Generating Station
Courtney St. Peters, resident inspector at the Palisades Nuclear Generating Station, performs a safety check in August 2020. Hot summer months can put additional strain on cooling systems. Credit: Nuclear Regulatory Commission, CC by 2.0

According to program guidance issued by the Department of Energy, the Diablo Canyon reactors don’t even appear to be eligible for credits because they are in a regulated rather than a competitive market. Additionally, the California reactors are closing following a negotiated settlement between their owner, environmental groups and other parties that is not affected by the credit program. Also, it could be difficult for PG&E, the owner of the reactors, to prove that closing Diablo Canyon, in a state that has been rapidly expanding its solar capacity, will lead to increased emissions.

On the verge of retirement. The Palisades reactor, which is more than 50 years old and scheduled to shut down at the end of May, has a better case for receiving credits. But the reactor’s owner, Entergy, says it’s too late to stop it from shutting down.

Still, Michigan Governor Gretchen Whitmer insists she wants Palisades to keep running. It’s hard to see how that could happen unless another company quickly steps in to buy the plant, but a letter sent last week from Whitmer to Granholm – who is not just the secretary at the energy but also a former Michigan governor – said Michigan would support a “compelling demand” for Palisades to receive a bailout from the credit program.

Beyond Nuclear and several other nonprofit groups say it would be dangerous to keep Palisades going beyond May. “I think it’s playing with fire,” says Kevin Kamps, radioactive waste specialist at Beyond Nuclear. “They’re trying to keep the aging reactors on life support.”

Kamps says Palisades has the most fragile reactor pressure vessel in the country, a degraded lid and steam generators that need to be replaced for the second time. Entergy failed to make promised repairs after the reactor changed hands in 2007, he says.

“Palisades has been on schedule for five years, so why is all this happening now?” asks Tim Judson, executive director of the Nuclear Information and Resource Service (NIRS), a nonprofit anti-nuclear group. The state has had five years to help the community transition to other energy sources and employment opportunities, he says.

The renewable energy option. Judson says his group sees the new credit program as “largely a waste of time and money”, but admits it is “put together in a pretty rational way”. It prioritizes the reactors most at economic risk and best positioned to prevent rising emissions, rather than simply crediting each nuclear reactor for the electricity it generates – the preferred industry approach.

However, Judson and many others who submitted public comments on the design of the credit program said it should have included an option to submit proposals to replace existing nuclear plants with renewables and energy upgrades. energy efficiency at competitive prices. “Maybe they could fund that instead of a lifeline for aging plants,” suggests Judson.

The Department of Energy may not find takers for the first year of its new program. If that happens, Judson says, “it’s going to look like it’s not succeeding.”

Any success that does occur will likely be short-lived. The Energy Information Administration predicts that the federal credit program, along with grants from states like New York and Illinois, will allow some reactors to remain profitable for the next five to 10 years, but that departures from retirement will resume after the legislation expires and credit payments cease.


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