It does not come as a surprise. Two more aging, money-losing nuclear plants, this time in Illinois, are threatened to be closed if government does not provide even more subsidies. Per the Wall Street Journal see link, Exelon is to close the Clinton and the Quad Cities nuclear power plants if the legislation is not passed. UPDATE 6/2/2016: - Clinton to close on June 1, 2017. Quad Cities to close one year later, June 1, 2018 -- RES.
"According to Exelon, Clinton and Quad Cities have lost more than $800 million over the past six years. . . Exelon said some nuclear plants are at risk of closing because wholesale energy prices are at a 15-year low. "
These two join the list that includes Pilgrim, and FitzPatrick nuclear plants that were subjects of recent articles on SLB and their imminent closure. In every case, the reasons given are the same: the nuclear plants are losing money and are unable to compete in the electricity market.
What is more interesting about the Clinton nuclear power plant is that it is only 29 years old, which is relatively young for a retiring nuclear plant. The plant started operations in 1987. (It will be barely 30 years old upon shutdown in 2017)
The Quad Cities nuclear power plant is 43 years old, having started operations in 1973. This age is much more typical of the nuclear plants that shut down. (It will be 45 years old upon shutdown in 2018, making it the grand old man of US nuclear power. If it makes it that far, that is. )
In the big picture, one can expect that an average of 5 to 6 nuclear power plants will shut down each year over the next two decades. This is based on the age of the nuclear power plants, their inability to run profitably, and the high cost to modify the plants to increase revenues.
The US nuclear reactors are approximately 35 years old on average, with many reactors past 40 years. With the revolution in electricity generation brought about by low-price for natural gas, which is now less than $2 per million Btu, and tremendous increases in wind-turbine electricity, wholesale power prices are very low. Wind-turbine energy now (as of early 2016) matches and sometimes exceeds the electricity produced by hydroelectric dams. In this market, many nuclear power plants run at a loss, as Exelon stated above: $800 million loss over the past six years.
The nuclear plants, perhaps, could be modified with sufficient ingenuity and money to operate more profitably. The major problem to such a plan is the short life after the modifications are made. One could, for example, invest $400 to $800 million in a nuclear plant to uprate it, or produce more power. Some plants have done this. The twin-reactor plant in California at San Onofre tried to do this a few years ago, with disastrous results. The new equipment, four high pressure steam generators, developed leaks and sent radioactive steam into the skies above Southern California. Both reactors were then permanently shut down. But, even if the modifications work as planned, the plant owners have only a few years to recover the investment before the plant is shut down due to other parts requiring replacement. Nuclear plants were designed for 40 years of operation. Even though the NRC typically grants every request to extend the operating license to 60 years, the plants must continue to meet all safety requirements.
Cries for Subsidy
The cries for more subsidies are falling on deaf ears, which is as it should be. Nuclear power plants already enjoy more subsidies than any other industry one can name. As written before on SLB, nuclear plants in the US have at least six forms of government subsidy, indemnity from harm from radiation releases, government guaranteed construction loans, protection from most lawsuits during construction, safety regulations relaxed to allow plants to continue to operate, laws passed to obtain construction funds from existing consumers, and direct payment of 2.3 cents per kWh for all power sold for the first 10 years from a new nuclear power plant. Now, the plant owners are threatening plant closure if more subsidies are not provided. (6/2/2016, the legislature failed to pass any new subsidies for the nuclear plants, so they are to close as stated above. )
Shutting down nuclear power plants will become routine, common-place. The growth industry will be nuclear plant decommissioning. It is expected that 50 to 60 nuclear reactors will be shut down and decommissioning started over the next decade. Between 30 to 40 more plants will be shut down in the subsequent decade.
Roger E. Sowell, Esq.
Marina del Rey, California
copyrignt © 2016 by Roger Sowell, all rights reserved