New England is about to get hit with huge electricity rate increases, job losses and more carbon emissions, a result of the Vermont Yankee nuclear plant’s imminent closure. Make no mistake, the potential for these consequences to occur is not isolated to one region -- all parts of the country should brace themselves if additional premature plant closures occur.
In fact, a growing number of America’s existing nuclear energy plants are at risk of shutting down. In 2013, four nuclear energy reactors from across the country announced their retirement, an unprecedented retrenchment for the nuclear industry. Others have indicated that they will follow suit if conditions do not improve, even though these plants have years of useful life left.
Such losses will be devastating because of the benefits that our existing nuclear energy plants provide to the nation.
Existing nuclear plants produce 20 percent of our electricity, provide 100,000 well-paying jobs, contribute billions in local, state and federal taxes, and make up 63 percent of our carbon-free energy.
To put a finer point on it: due to Vermont Yankee’s closure, 600 people across Vermont, New Hampshire and Massachusetts will lose their jobs. Not to mention that regulators are already scrambling to ensure that the energy from the Vermont Yankee unit is replaced, given that nuclear power, including from Vermont Yankee, produced 26 percent of New England’s power during the peak of last year’s frigid weather. Vermont Yankee also helps prevent the emission of a million tons of carbon each year.
Vermont Yankee is just one example of this national problem. The closure of the Kewaunee plant in Wisconsin and the San Onofre plant in California pose serious carbon emissions challenges for their host regions, among a number of other issues.
The cause of the current malaise is due in large part to a perfect storm of economic and policy challenges, including sluggish demand for electricity, the onset of cheap natural gas, electricity markets that do not sufficiently value low- or zero-carbon electricity sources and an aging, constrained transmission system.
The reliability implications of premature nuclear energy plant closures alone should give us pause. During the Polar Vortex, nuclear energy plants outperformed all other sources of energy, operating at 95 percent capacity. So what was a close call this past January could mean blackouts in the future if parts of the country have to deal with severe weather conditions without nuclear energy plants.
What might be done to ensure that existing nuclear energy plants are preserved? While different solutions may be called for in different regions, it is time to begin engaging in these discussions on a national scale so that we can ensure a diverse and secure energy future for America. To this end, we have laid out a framework of possible solutions that might be considered by policymakers.
First, markets should appropriately value existing nuclear energy plants for their reliability. Some organized competitive wholesale markets for power, in addition to energy markets that facilitate the buying, selling and delivery of electricity, have capacity markets that provide incentives to promote investment in maintaining existing generation and encouraging the development of new power facilities. The Federal Energy Regulatory Commission (FERC), which is charged with oversight of wholesale electric markets, could approve changes to capacity markets that would ensure that only resources that can physically perform will bid into regional capacity markets, and thereby ensure that prices reflect the true cost of capacity.
Second, electric transmission lines could better link nuclear energy plants to the markets that need their power. Transmission expansion in many places is difficult due to limitations on which projects can qualify as regional projects in Regional Transmission Organizations (RTO), as well as impediments in siting. Lack of transmission causes bottlenecks and impedes the ability of nuclear energy facilities to reach places where power is needed. State and federal policymakers could facilitate the expansion of the grid in such places by ensuring that laws and regulations support development under these circumstances.
Finally, nuclear energy plants could be recognized for the fact that they emit no carbon. According to a recent study by the Brookings Institution, nuclear energy is the most cost-effective, zero-emission technology on the U.S. electric grid. In fact, nuclear energy facilities prevent four times as much carbon dioxide per megawatt as wind; six times as much as solar arrays.
A majority of states have renewable portfolio standards (RPS) policies designed to increase generation of electricity from renewable resources. These policies require or encourage electricity producers within a given jurisdiction to supply a minimum share of their electricity from renewable resources. Generally, these resources include wind, solar, geothermal, biomass and some types of hydroelectricity.
An RPS provides a preference to such new renewables, leaving existing nuclear resources to compete on an uneven playing field. In lieu of an RPS, states could adopt clean energy standards (CES) that appropriately value the carbon-free nature of nuclear energy, or modify existing RPS to promote clean energy and its environmental benefits in a technology-neutral fashion.
This is especially timely as states contemplate how they will meet the Environmental Protection Agency’s (EPA) recent draft rule to curb carbon emissions by 30 percent by 2030. The proposed rule’s recognition of nuclear energy’s attributes and its importance to state compliance is a positive development, but the closure of nuclear energy plants will make it difficult or impossible for states to comply with these rules.
Discussions are already beginning on how best to preserve nuclear energy plants. We are hopeful that with continued dialogue and increased awareness of this issue, we can find the right solutions to help preserve this essential energy resource.
Former Senators Evan Bayh (D-Ind.) and Judd Gregg (R-N.H.) are co-chairmen of Nuclear Matters, a campaign designed to engage and inform policymakers and the public about the need to preserve existing nuclear energy plants.