By Michael Mariotte

A Greenpeace blimp flies above Vermont Yankee.

A Greenpeace blimp flies in protest above Vermont Yankee.

The long-awaited shutdown of the Vermont Yankee (VY) reactor on December 29 was celebrated across New England over the weekend; I’m told the party in Greenfield, Massachusetts Saturday night was especially festive.

After decades of campaigning, especially over the past 15 years when the Nuclear Free New England campaign kicked off at an action camp near Brattleboro, VT in 1998 (the initial announcement of VY’s impending shutdown was made 15 years to the day that 21 activists were arrested at the reactor site as the culmination of that camp), as well as years of deceit and bumbling by VY’s last owner Entergy–which managed to alienate just about the entire region’s population along with nearly every political leader in Vermont–such festivities were certainly in order.

Protests against Vermont Yankee regularly drew hundreds, and sometimes thousands of people in the small state.

Entergy of course denied that activism and the near-unanimous public and political opposition to VY had anything to do with the shutdown, and it’s undoubtedly true that if the reactor had any hope of again turning a meaningful profit the utility would have tried harder to keep it running. But there was no hope of that, and there were plenty of steps left for the state and the public to take to force its shutdown, so Entergy decided to cut its losses.

What’s left now is a staggering $1.24 Billion estimate for decommissioning the 617 MW reactor –just a little over 1/2 the size of most U.S. reactors–and some key decisions on how best to handle that decommissioning. The activists who led the shutdown campaign plan on staying involved in those decisions. But the size of the decommissioning bill leads to renewed concern that the costs of decommissioning larger reactors–costs that will be incurred at every reactor with many sooner than a lot of nuclear utilities would like to think–will soar well beyond their ability to pay.

Entergy, for example, has only about half the needed money in its decommissioning fund (and even so still found it cheaper to close the reactor than keep it running); repeat that across the country with multiple and larger reactors and the shortfalls could be stunning. Expect heated battles in the coming years as nuclear utilities try to push the costs of the decommissioning fund shortfalls onto ratepayers.

Outside of Entergy, which kept its comments relatively low-key in comparison, the nuclear industry reacted to the shutdown with hysterical hyperbole.

Said former New Hampshire Senator Judd Gregg for Nuclear Matters, a group formed by Exelon a year ago to prevent such reactor shutdowns,

Signs of stress in our country’s reliable electricity grid cannot be ignored. It is simply unsustainable for the United States to continue down the path of allowing nuclear energy plants to close. Regulators, policymakers and industry must work together to ensure that nuclear energy is properly valued as a reliable, affordable and carbon-free electricity resource that is essential to America’s energy future and diverse fuel mix, and to ensure that existing nuclear plants are properly recognized in electricity markets for the value that they provide. Nuclear energy is safe, reliable, secure, and 100 percent carbon-free. This 24-7, 365 always-on source of electricity is key to our country’s success.

Added the Nuclear Energy Institute,

Closing Vermont Yankee—a valuable contributor to Vermont and the region’s energy security and environmental protection—is both frustrating and disheartening to the nuclear energy industry….

Vermont Yankee is an unfortunate and clear example of a situation that should not be replicated in other states. Other nuclear energy facilities—producing affordable electricity safely and reliably—are at risk of premature closure due to competitive electricity markets that are not working for the benefit of consumers or the long-term reliability of the electric grid. It is simply unsustainable and shortsighted to continue to shut down perfectly good energy facilities and put at risk the fundamental values of our electricity system.

Will Davis wrote on the American Nuclear Society’s website,

There are those who campaigned mightily to keep this plant open—workers, concerned citizens, experts in the field of nuclear energy—who have now seen their efforts thwarted by the plant owner having declared the plant no longer economic to continue operating. Many people are aware of the stabilizing effect on the grid that nuclear plants have, the price-controlling effect that buying nuclear fuel two years at a time has, and at no end the reliability of nuclear plants in extreme weather of all sorts. For naught? No. Those same arguments, those same reasoned explanations, all fit nuclear plants everywhere. The fight having been fought–and learned from—is far more important to our nation’s discussion of energy than might be gleaned from a wished-for future in which the fight never took place.

Meanwhile, pro-nuke activist Rod Adams, in a long plea to somebody–anybody–to keep VY open, admitted he doesn’t even understand Entergy’s decision to close the reactor–an acknowledgement that he doesn’t understand energy economics generally either.

I’m confused by Entergy’s stubborn insistence that its decision to close the plant is driven purely by economics. Under current market rules, Vermont Yankee might not be the kind of consistent money maker that monopoly utility analysts prefer, but it is a low marginal cost producer of a vital commodity whose price occasionally spikes….

No amount of dreaming or alternative energy optimism is going to produce useful solar energy on cold, snowy, dark New England days. There are no flat plains nearby on which to install massive quantities of wind turbines. There are businesses salivating over new transmission lines or gas pipelines, but the people who live in the proposed pathways are not so excited.

But the general industry mood was perhaps best summed up by a blogger at Yes Vermont Yankee,

To say I have been miserable about Vermont Yankee going off-line is putting it mildly. People laid off, Vermont importing power from the gas plants in the states next door, opponents crowing that nuclear is just too expensive and this proves it. It’s all too much.

And, predictably, nuclear advocates like Forbes’ insufferable and consistently wrong James Conca were predicting VY’s shutdown will lead to higher electricity rates in the region.

It’s easy to knock down the industry’s self-serving arguments; almost too easy–there’s no sport to it anymore.

Economist Mark Cooper took Conca and others warning of economic disaster and skyrocketing electricity rates to task (an article perhaps Adams should read if he wants to understand nuclear economics):

Critics of the closing of the Vermont Yankee nuclear reactor have forecast a 40 percent jump in New England winter heating bills as a result of the shutdown. The facts suggest they have it wrong in more ways than one.

Last year New England electricity prices were about 36 percent higher than the U.S. average. Ten years ago they were about 36 percent above the U.S. average. The Energy Information Administration (EIA) price increase projected for New England in 2015 is 3 percent (compared to a national average of 2.5 percent). Having Vermont Yankee online did not help New England achieve lower winter electricity prices and closing it won’t make an appreciable difference….

The problem with new reactor construction costs is well known, but the really stunning development is the problem that nuclear power has in terms of operating costs. Nuclear power has always touted itself as the low-cost source of electricity by emphasizing its low operating costs and downplaying its high construction costs. That sleight of hand does not work anymore. Twenty years ago, nuclear power had the lowest operating costs, so keeping them online made perfect sense. As they aged, their operating costs rose, while technological progress has lowered the operating costs of renewables. Today the operating costs of nuclear reactors, particularly old ones like Vermont Yankee, are much higher than renewable alternatives.

Indeed, VY closed because it couldn’t provide electricity at competitive rates. So how could closing it lead to higher electricity rates? If the rates were high enough, VY could have stayed open. The reality is that the reactor was uneconomic for Entergy now, and would forever remain so; the gap between rates and VY’s cost of producing electricity likely would have widened, not narrowed.

Deb Katz and the Citizens Awareness Network were among the most tireless and effective opponents against Vermont Yankee.

Deb Katz and the Citizens Awareness Network were among the most tireless and effective opponents against Vermont Yankee.

As for Adams’ insistence that solar power can’t work in Vermont, here’s a tip: solar power works everywhere. Vermont’s climate is not so different from Germany’s, where renewables are providing an ever-increasing percentage of the nation’s electricity, and will continue to grow until they provide virtually all of it.

Gregg’s insistence that nuclear power is “100% carbon-free” is somewhat surprising: even the Nuclear Energy Institute doesn’t try to make that claim anymore. It may be news to Gregg that nuclear reactors require a dirty fuel chain to produce their atomic fuel (a chain that continues through the nearly eternal requirement to keep reactors’ lethal radioactive waste from entering the environment), but it’s no longer a surprise to anyone following energy issues.

And Gregg’s argument that “This 24-7, 365 always-on source of electricity is key to our country’s success” is dead wrong. In fact, that was nuclear’s 20th century selling point–and it was relevant then. It’s not in the 21st century, when new methods of generating and distributing electricity are both in place and required.

As Cooper explains,

Because reactors are inflexible, “must run” facilities that cannot quickly increase and decrease power, they cannot respond to changes in load. They put all of the supply-side response to changes in load onto other facilities. The 20th century central station approach met peak load by burning fossil fuels, first diesel and then natural gas.

Rather than relying solely on the supply-side to meet increases in demand, the 21st century electricity system marshals a much broader range of tools. The ability to use demand response has increased dramatically with improvements in information and control technologies, particularly when it is integrated with diversified, distributed supply. The Regulatory Assistance Project, based in New England, has identified a dozen policies that can lower the peak and increase the system-wide load factor dramatically.

The industry is attempting to use VY’s “premature” shutdown as a rationale to change energy policies to favor uneconomic nuclear reactors above the growing use of cleaner, safer and cheaper renewables. That’s what’s behind their laments, their fearful (yet unrealized) predictions of higher electricity rates and lower grid reliability and their prescriptions to return to the days when nuclear was “properly valued.”

As for grid reliability, former Sierra Club head Carl Pope neatly sums up the reality that nuclear and fossil fuels are now actually less reliable than renewables.

In truth, if nuclear power were “properly valued,” every reactor would close tomorrow. There is no value in continuing with an electrical generating source that, unlike any other, can lead to catastrophic meltdown, that produces radioactive waste lethal for eons, that does not mesh with a 21st century high-tech grid, and that, increasingly, cannot compete economically with the available alternatives.

That’s the real lesson of Vermont Yankee’s shutdown. That, and the fact that the relentless persistence and dedication of the clean energy campaigners who successfully organized and mobilized to bring about that shutdown can be replicated elsewhere, is what the nuclear industry truly fears. For good reason.

Michael Mariotte

January 5, 2015


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Filed under: aging reactors, energy future, Nuclear Economics Tagged: Carl Pope, Citizens Awareness Network, Mark Cooper, Vermont Yankee

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