No single solution to nuclear’s troubles

A range of tools, including state action and power market changes, are needed to ensure that existing nuclear power plants help keep the United States on track to meeting its climate goals. That was the consensus of experts C2ES convened this week at the National Press Club to discuss nuclear’s role as a zero-carbon energy source.

In a new brief, Climate Solutions: The Role of Nuclear Power, C2ES laid out some of the factors that led to the premature retirement of five nuclear reactors. Nuclear power provides more than 60 percent of zero-carbon emission electricity in the United States. So further closures will make it harder to reduce U.S. carbon emissions.

C2ES assembled a group of experts, including Peter Lyons, U.S. Assistant Secretary for Nuclear Energy; Carol Browner, Center for American Progress Distinguished Senior Fellow and former EPA Administrator; and Bill Mohl, President of Entergy Wholesale Commodities, to suggest potential remedies for preserving the existing nuclear fleet.

Notably, not all of the 100 operating nuclear reactors are at risk, only the 46 that operate as “merchant” generators and compete in wholesale power markets. Pressures they face include low natural gas prices, renewables policy, a slowdown in demand for electricity, unfavorable power market structures, and the absence of a price on carbon.

State Actions

Ms. Browner and other panelists pointed to regulations the U.S. Environmental Protection Agency (EPA) is developing to reduce carbon dioxide emissions from existing power plants as a potential pathway to preserving existing reactors. EPA could, for instance, allow states to use market-based programs to meet the standard – effectively creating a price on carbon emissions. C2ES sees pricing carbon as the best way to support all low-carbon energy, including existing nuclear.

Dr. Lyons noted that “it’s difficult to devise a one-size-fits-all solution at the federal level that would address the diverse market factors across the country,” but actions like long-term power purchase agreements between states and merchant operators would be effective. A precedent has already been set between Alliant Energy’s Duane Arnold facility and Iowa’s Utilities Board, which intends to purchase the unit’s power and capacity through 2025.

Market Reforms

Another option that could help preserve the existing nuclear fleet would be to modify existing power markets, including capacity markets, to specifically reward or incentivize currently unrecognized attributes of nuclear power.

One attribute is that nuclear can provide around-the-clock power, also known as baseload power, which is important for electric system reliability. Right now, power and capacity markets do not distinguish between baseload and intermittent power sources, such as wind and solar. Creating appropriate performance requirements for this type of resource could help nuclear power. The ISO New England power market is considering this type of rule change.

Additionally, nuclear fuel is available on site -- so reactors are not affected by supply disruptions, as was the case for some natural gas units this past winter during periods of high demand.

Finally, nuclear generation does not emit any carbon dioxide. But since generators don’t pay the cost of carbon emissions, there is no recognition in the market for this attribute of nuclear power.

Explicitly rewarding nuclear power in real-time and futures markets for these attributes could help them remain online.

Bolder Initiatives

Dr. Lyons pointed out that the Idaho National Laboratory and the National Renewable Energy Laboratory have been collaborating to find ways to integrate nuclear reactors and intermittent zero-carbon emission renewables like wind and solar. In the future, with the creation of new tools and techniques, these sources could optimize their output. Surplus thermal or electric energy could be diverted to create a range of products, including emission-free hydrogen or liquid fuels for the transportation sector, the second largest source of U.S. greenhouse gas emissions.

It is difficult to predict technology winners or the way markets will evolve. Several years ago, few would have predicted that the United States would have plentiful, inexpensive natural gas. However, it is clear today that low natural gas prices and a continuing market failure – power markets’ inability to favor electricity sources that produce zero-emissions – are affecting the existing nuclear fleet.

Each nuclear retirement makes it more difficult to achieve the U.S. pledge to reduce emissions 17 percent below 2005 levels by 2020, and to achieve the even greater reductions necessary over the longer term to avoid the worst effects of climate change. Let’s not be short-sighted and allow this important bridge to crumble.