MIT Concludes, Cheap gas, not renewables, caused nuclear woes

Posted On January 10th, 2018 - 9:40 am | by Oil and gas press

The U.S. Department of Energy proposed last year to provide cost recovery to coal and nuclear plants via payments for plants that had significant on-site fuel. The DOE reasoned these plants had been disadvantaged by subsidies given to renewable projects, in addition to costly regulations, and the retirements threatened the resilience of the grid.

But the Federal Energy Regulatory Commission rejected the proposed rule on Monday, handing it over to the grid operators to ultimately resolve the issue. Even so, the spate of nuclear retirements have set off a discussion over whether or not the value the resource for its carbon-free energy in organized markets. Since 2013 a half dozen nuclear reactors in the United States have closed permanently, and up to 23 others announced that they plan to retire before their operating licenses run out.
The other analysis, mentioned earlier, comes out of Lawrence Berkeley National Laboratory and Argonne National Laboratory.
“There is little relationship between the location of recent (2010-2016) coal, nuclear and other thermal retirements and [renewable] penetration levels,” researchers concluded in Impacts of Variable Renewable Energy on Bulk Power System Assets, Pricing, and Costs.

In PJM, Jenkins’ work found average day-ahead electricity market prices fell 55% from 2008 to 2016, with prices at individual nuclear plants in the PJM region declining between 47% and 69%.

While environmental advocates always cheer a coal plant closure, nuclear plants are a different beast. They generate more emissions-free energy than any other source in the United States, and yet these facilities are retiring early because they are losing money. It raises the question of how necessary nuclear plants are to decarbonize the grid.

“The transition from coal to natural gas in the U.S. electricity mix, the rise of wind generation, and declining electricity consumption have all helped reduce emissions of both carbon dioxide and criteria pollutants in recent years,” Jenkins points out.

“Nuclear generators in the PJM region alone produce roughly as much electricity as all wind and utility-scale solar power plants in the U.S. as of 2016.”

“If cheap natural gas, growing wind generation, or lower electricity demand eventually lead to widespread retirement of existing nuclear plants, the net environmental benefits of these trends would be significantly reduced.” Jenkins concluded.

MIT: Cheap gas, not renewables, caused nuclear woes

Source / More: What’s Killing Nuclear Power in US Electricity Markets?

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