Energy & Technology
REMARKS BY EILEEN CLAUSSEN
PRESIDENT, CENTER FOR CLIMATE AND ENERGY SOLUTIONS
C2ES DISCUSSION “CLIMATE SOLUTIONS: THE ROLE OF NUCLEAR POWER”
NATIONAL PRESS CLUB, WASHINGTON, D.C.
APRIL 28, 2014
Good morning and welcome. I'm Eileen Claussen, President of the Center for Climate and Energy Solutions. I want to thank you all for joining us today to talk about the role of nuclear power in achieving our climate goals.
As many of you know, we at C2ES work with policymakers and a wide range of stakeholders to develop sensible solutions to one of our most fundamental challenges. That challenge, simply put, is providing clean, secure, and affordable energy, while also protecting the global climate.
If you haven’t been paying attention, climate change is getting harder and harder to ignore. It’s no longer a far-off possibility; it’s a here-and-now reality. In the latest report from the Intergovernmental Panel on Climate Change, the world’s climate scientists state even more clearly and emphatically that global warming is real; it’s largely caused by us; and we’re already feeling the impacts.
Climate change poses serious risks for our environment, our communities, and our economy. Our “Weathering the Storm” report last year looked at how companies are responding to these increased risks and found that 90 percent of S&P Global 100 companies see extreme weather and other climate impacts as current or future business risks.
The new IPCC report also says that greenhouse gas emissions need to drop 40 to 70 percent by 2050. To do that, according to the IPCC, the world would need to more than triple the amount of energy it gets from non-carbon sources – sources like wind, solar and nuclear -- that provide the energy we need while producing no carbon emissions.
Against that backdrop, we think it’s important to consider the role of nuclear power in achieving our climate goals – and, in particular, the importance of the existing nuclear fleet in achieving the goal of reducing U.S. emissions 17 percent by 2020.
I’m very pleased to be joined this morning by such a high-caliber group: Peter Lyons, U.S. Assistant Secretary for Nuclear Energy; Carol Browner, Distinguished Senior Fellow at the Center for American Progress and a former EPA administrator, and Bill Mohl, President of Entergy Wholesale Commodities.
In a few minutes, I’ll ask each of them how they view this dilemma, and we’ll get into what I hope will be a lively discussion. Then, Janet Peace, our VP of Markets and Business Strategy, will keep the conversation going with a second panel of experts: David Brown, Senior Vice President of Federal Government Affairs at Exelon Corporation; Kimberly Clark, Chief Commercial Officer for North America at AREVA; and Susan Tierney, Senior Advisor at The Analysis Group.
Before we start the conversation, I’d like to lay a bit of a foundation. Every type of energy comes with its own set of issues and risks. In the case of nuclear power, these have included waste disposal, proliferation concerns, and safety risks, which were underscored three years ago by the Fukushima disaster in Japan.
Many countries re-examined their nuclear policies in the wake of Fukushima. Japan shut down all of its reactors, which increased its fossil fuel reliance and its carbon emissions. The national government has indicated that it hopes to begin restarting some of those reactors soon.
Meanwhile, Germany shut down eight reactors immediately after Fukushima and revived its plan to shut down all of its nuclear reactors by 2022. Already, Germany has seen an increase in its coal-generated electricity -- and its carbon emissions.
Globally, though, the bigger picture is one of nuclear power holding steady – or, especially in parts of the developing world – growing fast. Sixty new reactors are currently under construction in 13 countries. China, which operates 20 reactors, is building 28 more, and is looking toward a ten-fold increase by 2030. The EIA projects that, globally, nuclear generating capacity will nearly double over the next 25 years.
To what degree this projected growth is driven by climate considerations is very hard to say. But there’s no question that every kilowatt-hour generated by nuclear and renewables instead of coal or natural gas means less carbon going into the atmosphere.
Let’s take a closer look now at the situation we face here in the United States. And for that, I’d like to walk you through some of the key findings of our new policy brief, which you’ll find in your packets.
Our climate problems and our energy system are, of course, closely intertwined. You can’t talk about one without talking about the other. In the U.S., nearly 40 percent of our CO2 emissions come from the power sector, making it the largest source. Nuclear power supplies about a fifth of U.S. electricity. But more importantly from a climate perspective, nuclear represents the lion’s share – more than 60 percent -- of zero-carbon electricity.
What’s also important is the type of power that nuclear provides: baseload power that’s available all day, every day. This slide shows how the U.S. electricity mix varies over the course of a typical winter day. It shows that the baseload sources – the sources we rely on 24 hours a day -- are primarily coal, natural gas, hydropower, and nuclear.
Renewable sources like wind and solar help primarily with meeting variable demand – which as you can see, peaks at 8 in the morning and 6 at night. They’re also vital sources of zero-carbon energy and help to diversify our energy supply. But they’re intermittent sources. And until large-scale energy storage is commercially viable, renewables will only be able to meet a small portion of our baseload needs.
Given nuclear’s current importance as a zero-carbon fuel, losing nuclear capacity will make it harder for the United States to meet its goal to reduce emissions 17 percent by 2020.
Unfortunately, that’s the direction we’re heading.
In the past year-and-a-half, power companies have announced the unexpected retirement of five reactors, representing 4 percent of the U.S. nuclear fleet. More may follow. Earlier this year, Exelon, the nation’s largest operator of nuclear power plants, announced that it, too, is considering early retirements for some of its Midwest reactors.
What’s it take to replace the nuclear power we’re losing? To replace the power from five nuclear plants, you’d need 16 natural gas combined cycle power plants, which would emit a total of 12 million metric tons of carbon dioxide per year. If you turned to renewables, you’d need a lot -- roughly 7,600 wind turbines or 3.7 million solar PV rooftop panels -- to generate the same amount of electricity as five nuclear reactors. And, as I pointed out, wind and solar can’t currently provide baseload power.
I call these nuclear retirements “unexpected” because some reactors are closing earlier than their useful lifetime. This is happening for a variety of reasons, including depressed power prices, higher operating costs, and power market design challenges. Those were among the reasons cited for the early retirement of Entergy’s Vermont Yankee nuclear power station. By the way, an official with New England’s grid operator recently said Vermont Yankee’s shutdown will mean burning more oil and natural gas next winter. Again: the wrong direction.
As we outline in our brief, lower natural gas prices and increases in wind power generation – both of which, we have to point out, have climate benefits – are contributing to lower wholesale market prices for electricity. The power markets are technology-agnostic. They don’t value zero-carbon or baseload sources more highly than their alternatives. Meanwhile, life-extending capital investments and post-Fukushima safety improvements are adding to nuclear costs. The combination of these forces has led to unsustainably low revenue for several nuclear power plants.
A member of the Federal Energy Regulatory Commission recently expressed concern about the loss of baseload nuclear power. Commissioner John Norris said nuclear is critical to lowering emissions in the coming decades and that, in his words, "if we don't do something…we are letting some pretty big bridges be torn down."
What can be done to address these challenges? I hope we get some of those answers from our discussion today.
At C2ES, we’ve long felt the best approach for advancing low-carbon solutions, including nuclear power, is to put a price on carbon. Unfortunately, we’re unlikely to see Congress enact a national carbon price any time soon.
But there may be things that can be done at the state or regional level to help maintain the existing nuclear fleet. Hopefully, the carbon standards for power plants being developed by EPA will allow states the flexibility to meet them through market-based programs – effectively creating a price on carbon. This could integrate the carbon markets we already have in California and the Northeast, and encourage other states to follow suit. Another implementation option might be to apply a carbon price within regional power markets, benefiting zero-emission sources like nuclear and renewables.
So key questions here are how ambitious the EPA standards will be, how effective states will be at establishing market-based programs, and whether the whole will provide enough of a price signal to keep the existing nuclear fleet competitive.
These are just some ideas, and we’d love to hear others.
The bottom line is that if we keep shutting down nuclear power plants, it’s going to be that much tougher to meet even our near-term climate goals. With the risks of climate change clear, present, and rising, I don’t believe we can afford to take a proven zero-carbon energy source out of the equation.
There’s a lot to discuss, so let's get the conversation started.
If carbon dioxide were a valuable commodity instead of a waste product, there would be a lot more incentive to capture it.
It turns out some oil producers already find carbon dioxide so useful, they’re willing to pay for it. In fact, they pay upwards of $30 per ton of CO2, which they then inject underground to coax oil from declining wells.
U.S. oil producers have been practicing carbon dioxide enhanced oil recovery (CO2-EOR) for four decades. Historically, they’ve relied mostly on CO2 from naturally occurring underground reservoirs. A better idea is to use man-made carbon emissions that would otherwise go into the atmosphere and contribute to climate change.
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.
Nuclear power supplies more than 60 percent of zero-carbon electricity in the United States. The unexpected retirement of five nuclear reactors is prompting concerns that additional closures could make it tougher to meet U.S. climate goals.
C2ES releases a new brief examining this emerging dilemma and hosts a discussion with government, industry, and policy leaders.
Monday, April 28, 2014
9:30 a.m.-12:00 p.m
National Press Club
529 14th St. NW, 13th Floor
Washington, DC 20045
Assistant Secretary for Nuclear Energy, U.S. Department of Energy
Distinguished Senior Fellow, Center for American Progress
and Former EPA Administrator
President, Entergy Wholesale Commodities
Senior Vice President, Federal Government Affairs, Exelon Corporation
Chief Commercial Officer, North America, AREVA, Inc.
Senior Adviser, Analysis Group
President, Center for Climate and Energy Solutions
April 28, 2014
Contact: Laura Rehrmann, firstname.lastname@example.org, 703-516-0621
C2ES: Losing nuclear power makes it harder to meet U.S. climate goals
WASHINGTON – Further closures of U.S. nuclear power plants will make it harder for the United States to reduce carbon emissions and meet its climate goals, the Center for Climate and Energy Solutions (C2ES) says in a new policy brief.
The brief, "Climate Solutions: The Role of Nuclear Power,” examines the role of the existing U.S. nuclear fleet as a zero-carbon energy source, and why power companies have announced the unexpected retirement of five nuclear plants.
Nuclear power currently supplies the lion’s share -- more than 60 percent -- of zero-carbon electricity in the United States. Unlike other zero-carbon sources such as wind and solar, which are intermittent, nuclear provides “baseload” power available 24 hours a day.
“Losing more of our existing nuclear fleet will make it that much tougher to meet our carbon reduction goals,” said C2ES President Eileen Claussen. “We need to keep ramping up renewables, but they can’t meet our need for reliable power 24/7. Nuclear is a baseload source and it’s carbon-free – two things we need.”
The new brief was released today at a C2ES event with government, industry, and policy leaders at the National Press Club.
According to the C2ES brief, replacing the generation being lost from the five announced nuclear shutdowns would require 16 (400 MW) natural gas combined cycle power plants, which would provide baseload power but emit 12 million metric tons of carbon dioxide per year. Replacing the same capacity with renewables would require about 7,600 (1.5 MW) wind turbines or about 3.7 million (5kW) solar rooftop panels, which are carbon-free but can’t currently provide baseload power.
The United States has set a goal of reducing its total greenhouse gas emissions 17 percent below 2005 levels by 2020. Although emissions had declined about 7 percent, they have begun rising again, and additional policies are needed to meet the 2020 goal. Electricity accounts for about a third U.S. greenhouse gas emissions.
“These plants are shutting down early for a variety of reasons, including lower power prices, higher operating costs, and the way our regional power markets work,” said C2ES Senior Energy Fellow Doug Vine, who co-authored the brief.
Lower natural gas prices and increased wind power generation – which both have climate benefits – are contributing to lower wholesale electricity prices. At the same time, maintenance activities and mandated post-Fukushima safety enhancements are adding to nuclear power plant costs. Wholesale power markets operate strictly on price – and don’t value zero-carbon or baseload sources more than their alternatives – and some nuclear facilities are finding it harder to remain competitive.
“The best way to advance low-carbon solutions, including nuclear power, is to put a price on carbon,’’ Claussen said. “A comprehensive national approach is unlikely any time soon. But if well designed, the carbon standards EPA will soon propose for existing power plants could drive market-based programs at the state and regional level that could help maintain the existing nuclear fleet.”
Speakers at today’s C2ES event included Peter Lyons, U.S. Assistant Secretary for Nuclear Energy; Carol Browner, Center for American Progress Distinguished Senior Fellow and former EPA Administrator; Bill Mohl, President of Entergy Wholesale Commodities; David Brown, Senior Vice President of Federal Government Affairs at Exelon Corporation; Kimberly Clark, Chief Commercial Officer, North America, AREVA; and Susan Tierney, Senior Advisor at the Analysis Group.
Read the brief at: http://bit.ly/C2esnclr
An infographic is available for publication at: http://bit.ly/C2esinfo
The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in 2011, C2ES is the successor to the Pew Center on Global Climate Change. Learn more at www.c2es.org.
The increased availability of natural gas is leading to its expanded use worldwide. Substituting natural gas for coal as a fuel for generating electricity helps reduce the carbon emissions that contribute to climate change because burning natural gas emits only about half as much carbon as burning coal.
But half isn’t zero.
That’s why it’s important to note the recent announcement in the United Kingdom of the next step in building the first full-scale commercial natural gas power plant using carbon capture and storage (CCS).
In the Peterhead CCS project, international oil company Shell and British utility Scottish and Southern Energy Company are teaming up to retrofit a 385 MW natural gas power plant to capture post-combustion carbon dioxide (CO2). Pipelines will take the CO2 to permanent storage in a depleted hydrocarbon reservoir two kilometers under the North Sea. When the project, which received U.K. government incentives, comes online in 2018, it will be able to capture and store 1 million tons of CO2 each year for 10 years.
Webinar 1: An overview of water/energy issues from national and federal perspectives
May 8, 2014
2 p.m. – 3 p.m. ET
Dr. Craig Zamuda from the Department of Energy (DOE) will present key findings from DOE’s recently released water/energy nexus report, attempting to distill some of the key issues and risks of which water and electric utilities should be aware. Dr. Kristen Averyt, Associate Director for Science for the Cooperative Institute for Research in Environmental Sciences and Director of the Western Water Assessment at the University of Colorado, will present her research regarding water-energy challenges that exist currently and are on the horizon.