Group warns more nuclear power plants may shut down

Feb 14 - Luther Turmelle New Haven Register, Conn.

 

The chief executive officer of a trade group representing the nuclear power industry warned Wall Street analysts Thursday that more power plants in the sector may be headed for shutdown.

Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute, cited the pending shutdown of the Vermont Yankee Nuclear Power plant in New England as an example that the current competitive market that power producers bid into doesn't adequately value the reliability the industry's plants provide. Vermont Yankee's owner, Entergy, announced in 2013 that the nuclear power plant, which is located along the Connecticut River just outside of Brattleboro, would shutdown at the end of this year.

Fertel said in a statement that the shutdown of Vermont Yankee was a "perfectly rational business decision" for Entergy, but wrong for society as a whole. He also cited last year's shutdown of the Kewaunee nuclear plant in Wisconsin as another example of the flawed marketplace as it relates to nuclear energy.

"There was nothing wrong with these plants," Fertel said. "There is something wrong with the design and operation of the markets in which they are operating. They do not value the base load capacity that can be dispatched when needed, do not provide value for fuel end technology diversity."

Base load power plants generate electricity on a daily basis, in contrast to peaking generators, which only run when demand for electricity is at its highest.

Nuclear plant operators are finding themselves losing out to those power generating facilities that run on natural gas because of the increased availability of the fuel from the Marcellus Shale. The prices that natural gas-fired power plants are able to bid into the marketplace mean that in order to be able to operate, nuclear plant operators must bid at prices that they might not otherwise be comfortable with.

"The price structure in certain markets, including New England, is distorted," Steve Kerekes, an NEI spokesman said Thursday. "So they (nuclear plant operators) are having a tough time with the economics."

In states where the marketplace is more regulated and utility regulators guarantee the rate of return energy companies receive for building and operating new plants, there is investment in new nuclear reactors, Kerekes said.

Five new nuclear reactors currently are at varying stages of construction in the southeastern United States, he said, in Tennessee, Georgia and South Carolina. The five generating units, which are the first new nuclear power reactors to be built in the United States in 30 years, are scheduled to begin operating between now and 2018.

But Joel Gordes, a West Hartford-based energy consultant, said there are other issues beyond the way competitive power markets are structured that work against the long term viability of the nuclear power industry in the United States .

"The ages of the existing plants isn't conducive to attracting new investments," Gordes said. "And (the nuclear accident) at Fukushima has created a whole new perspective on the nuclear industry."

Another factor working against the long-term viability of nuclear power plants is the move toward distributed generation of power in the United States, he said. Distributed generation is a term used to describe the use of small-scale power producing technologies to generate electricity close to the end users of power.

"By their very nature, nuclear power plants require economies that only come in a very large scale," Gordes said.

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