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CO2 Emissions powerplant

Published on May 5th, 2014 | by U.S. Energy Information Administration

53

Coming Coal & Nuclear Power Plant Retirements, & What That Means

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Originally published on EIA.
By Jeffrey Jones and Michael Leff

In 2012, coal-fired and nuclear power plants together provided 56% of the electricity generated in the United States. The role of these technologies in the U.S. generation mix has been changing since 2009, as both low natural gas prices and slower growth of electricity demand have altered their competitiveness relative to other fuels. Many coal-fired plants also must comply with requirements of the Mercury and Air Toxics Standards (MATS) and other environmental regulations. Some of the challenges faced by coal-fired and nuclear generators, and the implications for electricity markets if the plants are retired in significant numbers, are analyzed in this discussion.

Of the total installed 310 gigawatts (GW) of coal-fired generating capacity available at the end of 2012, 50 GW, or 16%, is projected to be retired by 2020 in the AEO2014 Reference case. Despite those projected retirements, coal continues to account for the largest share of the electricity generation mix through 2034, after which it is overtaken by natural gas. However, throughout the projection the coal share of total generation remains significantly below its 49% share in 2007, when coal set its annual generation record.

In 2012 and 2013, operators of five nuclear power reactors representing 4.2 GW of capacity announced plans to retire the reactors by 2015. Four of the reactors—San Onofre 2 and 3, Kewaunee, and Crystal River—already have ended nuclear power production, and the fifth, Vermont Yankee, is expected to end generation by the end of 2014 [1]. In addition, the Oyster Creek plant is expected to conclude operation in 2019 [2]. These are the first retirements of U.S. nuclear power plants since Millstone Unit 1 was retired in 1998. Retirements often are the result of unique circumstances, but some owners of nuclear power plants have voiced concerns about the profitability of their units, sparking discussion of possible additional nuclear retirements [3]. In order to evaluate the impacts of potential retirements beyond those in the Reference case, AEO2014 includes several alternative cases with economic assumptions that make it less likely that existing coal and nuclear power plants will be used for generation.

Factors that lead to power plant retirements

Power plant owners generally make the decision to retire plants when their expected costs exceed their expected revenues over the future life of the plants [4]. Costs incurred by power plants can include large capital projects, such as installation of flue gas desulfurization (FGD) systems or scrubbers on coal plants, increased operating costs, or higher fuel costs. Revenues are received from energy sales or capacity payments in wholesale electricity markets in regions of the country with competitive wholesale markets, or from cost-recovery mechanisms in regions with vertically integrated utilities subject to rate regulations [5].

Recent trends in the electric power industry have resulted in both declining revenues and increased operating costs for coal plants. Because natural gas often is the marginal fuel and thus sets prices in Regional Transmission Organization (RTO) markets, and natural gas influences wholesale electricity prices in non-RTO markets, the decline in natural gas prices beginning in 2008 tends to reduce electricity prices and the payments received by all generators for the electricity they produce. Lower natural gas prices also improve the competitiveness of natural gas combined-cycle (NGCC) power plants relative to coal-fired plants. When
lower natural gas prices drive the cost of generating electricity from an NGCC plant below that of a nearby coal-fired plant, the coal plant is dispatched, or operated, less often and earns less revenue [6].

Slow growth of electricity demand in recent years has resulted in fewer high-cost marginal generators being dispatched. In regions with excess generating capacity, plants with relatively high variable operating costs may not be dispatched frequently enough to produce the revenue needed to cover their costs [7], making them candidates for retirement. Although the average price of coal delivered to the electric power sector declined in both 2012 and 2013, it rose by more than 4% per year from 2007 to 2011, and the resulting increase in operational costs for coal-fired power plants reinforced the impacts of lower demand and more competitive natural gas prices.

When faced with declining profitability, plant owners may choose to retire their units rather than make additional investments to keep them operating. In the AEO2014 Reference case, all coal-fired plants are required to have either a scrubber or a dry sorbent injection (DSI) system combined with a fabric filter in order to continue operating in 2016 [8] and later years. As of the end of 2012, 64% of the U.S. fleet of coal-fired generators was compliant with this requirement. The remaining plant owners are in the process of deciding whether to retrofit or retire their plants [9].

The outlook for nuclear power also has been altered by the changing conditions in U.S. electricity markets. Nuclear power plants have lower fuel costs than either coal- or natural gas-fired plants, translating to lower variable operating costs and ensuring that they are dispatched when available. The spread between the price of electricity and the fuel cost for nuclear plants is often referred to as the quark spread. Nuclear power plant owners in wholesale markets rely on sufficient quark spreads to cover nonfuel operations, maintenance, and any new capital expenses associated with the plants to provide a return on their investment. Lower wholesale electricity prices have reduced quark spreads for all nuclear power plants, especially those with increasing operations and maintenance (O&M) costs or capital addition costs.

The AEO2014 Reference case assumes an additional 6 GW of generic nuclear retirements from 2012 to 2019, beyond the six reactor retirements already announced (a total that includes the Oyster Creek plant), as higher-cost units face continued economic challenges. Those projected retirements are represented by derating of existing capacity for plants in vulnerable regions, not by retiring any specific plants. Higher natural gas prices in the Reference case after 2020 support the continued operation of the U.S. nuclear fleet and limit retirements from 2020 through 2040.

Accelerated retirement cases

AEO2014 includes several cases designed to explore the effects of alternative assumptions that change projected natural gas prices or electricity demand, or assigns a value to carbon dioxide (CO2) emissions as a proxy for possible future policies to mitigate greenhouse gas emissions. However, those cases have impacts throughout the energy system and the economy, which makes it difficult to measure the independent effects of significant coal and nuclear capacity retirements. In order to isolate the effects of additional retirements on the energy system, several cases were developed by incorporating assumptions that directly accelerate retirements of coal-fired and nuclear power plants.

Accelerated Coal Retirements case

The AEO2014 High Coal Cost case assumes a decrease in coal mine productivity and an increase in coal transportation costs, causing coal prices to rise to a level 68% above those in the Reference case in 2040. In the Reference and High Coal Cost cases, real O&M costs are flat, which is consistent with long-term historical trends. However, as coal plants age, higher O&M costs may also become a concern because replacement parts and upgrades to plant equipment could be required to keep them operating effectively. In the Accelerated Coal Retirements case, the assumptions of the High Coal Cost case are combined with an assumed 3% annual increase in real O&M costs for coal-fired power plants from 2012 through 2040, with the increase intended to represent the high end of potential future O&M costs. The higher fuel prices and O&M costs in the Accelerated Coal Retirements case serve as proxies for any combination of factors that would produce a higher rate of coal plant retirements.

Accelerated Nuclear Retirements case

The Nuclear Regulatory Commission (NRC) has the authority to issue initial operating licenses for commercial nuclear power plants for a period of 40 years and then to extend them in 20-year increments. The NRC has already approved initial 20-year license extensions for more than 70% of the nuclear fleet, and the AEO2014 Reference case assumes that each plant will receive a first license extension unless its planned retirement has specifically been reported. The nuclear power industry currently is developing strategies to submit license applications for additional 20-year life extensions that would allow plants to continue operating beyond 60 years. The AEO2014 Reference case assumes that plants reaching 60 years of age between 2030 and 2040 will be granted a second life extension.

Nuclear power plants operate as baseload capacity. Although they are expensive to build and maintain, they have relatively low variable operating costs, which ensures that they are dispatched when available. While not affecting their dispatch order, increases in nonfuel O&M costs can have negative effects on the economics of nuclear power plants through lower profit margins. To avoid retirement for economic reasons, a plant must maintain a positive net present value over its operating lifetime. As with coal plants, annual O&M costs for nuclear power plants remain flat in the AEO2014 Reference case. However, recent data suggest that O&M costs for nuclear plants rose at an average annual rate of 4% over the 2008-12 period [10].

The Accelerated Nuclear Retirements case assumes that O&M costs for nuclear power plants grow by 3% per year through 2040; that all nuclear plants not retired for economic reasons are retired after 60 years of operation; and that no additional nuclear power plants are built after the 5.5 GW of capacity currently under construction is completed. This case reflects uncertainty regarding actions and costs associated with continued operation of the existing nuclear fleet.

Accelerated Coal and Nuclear Retirements case

Large-scale simultaneous retirements of both coal-fired and nuclear capacity could have a significant effect on the electric power system. In order to assess that potential effect, the AEO2014 Accelerated Coal and Nuclear Retirements case combines the assumptions of the Accelerated Coal Retirements case and the Accelerated Nuclear Retirements case.

Results Retirements

In the Accelerated Coal Retirements case, 110 GW of capacity, or 117% more than in the Reference case, is retired by 2040 (Figure IF6-1). In the Accelerated Coal and Nuclear Retirements case, coal retirement levels are similar to those in the Accelerated Coal Retirements case through 2030, with a slight leveling off toward the end of the projection, when some coal-fired capacity is needed to make up for the lost nuclear capacity.


figure data

In the Accelerated Nuclear Retirements case, 42 GW of nuclear capacity is retired through 2040 (Figure IF6-2). However, other than retirements early in the projection, there is no significant reduction in nuclear capacity before the plants begin to reach their 60th year of operation, in 2029. The same retirement trajectory is repeated in the Accelerated Coal and Nuclear Retirements case.

There is no incremental increase in nuclear retirements in the Accelerated Nuclear Retirements, despite higher O&M costs. However, incremental retirements do occur in the Low Nuclear case, discussed in the Market Trends section of the AEO2014. The Low Nuclear case uses the same assumptions as the Accelerated Nuclear Retirements case, but also includes the resource assumptions from the High Oil and Gas Resource case that result in lower natural gas prices than in the Reference case. As a result, economic retirements of nuclear power plants that have not operated for 60 years do occur in the last decade of the projection in the Low Nuclear case, with nuclear capacity falling to 35 GW below the levels in the Accelerated Coal and Nuclear Retirements case.


figure data

Capacity additions

In order to replace capacity that is retired in the accelerated retirement cases, more total capacity (including capacity in the electric power sector, combined heat and power, and capacity in the end-use sectors) is added than in the Reference case. The new capacity mix consists almost entirely of natural gas and renewable energy sources (Figure IF6-3). Natural gas-fired combined-cycle units are favored because of their low fuel prices and relatively moderate capital costs.


figure data

Generation fuel mix

As existing coal and nuclear plants are retired, natural gas and renewables gain increasing shares of the generation mix (Figure IF6-4). The strength of this trend depends on how much nuclear and coal-fired capacity is retired.

figure data

Coal-fired generation in 2040 is lowest in the Accelerated Coal Retirements case, which results in the greatest total loss of coal-fired capacity. In all AEO2014 cases, including the Reference case, available coal-fired capacity operates as baseload generation throughout the projection. Therefore, removing coal capacity results in lower overall levels of generation. Coal-fired electricity generation in 2040 is 1% higher in the Accelerated Nuclear Retirements case than in the Reference case as a result of a small increase in coal-fired capacity installed at the end of the projection period.

Nuclear power plants also consistently operate as baseload generation, and their total generation varies with changes in capacity. In the Accelerated Nuclear Retirements and Accelerated Coal and Nuclear Retirements cases, nuclear generation in 2040 is 40% lower than in the Reference case. In the Accelerated Coal Retirements case, nuclear electricity generation is 2% above the Reference case level in 2040.

Natural gas prices

In all the AEO2014 accelerated retirement cases, natural gas prices are higher in most years than in the Reference case as retirements of existing coal and nuclear capacity lead to both increased use of existing natural gas-fired plants and the development of new plants. The alternative cases with the largest increases in natural gas-fired generation also have the largest price increases. For example, the price of natural gas delivered to the electric power sector in 2040 in the Accelerated Coal and Nuclear Retirements case is 11% higher than the Reference case price (Figure IF6-5) [11].


figure data

Carbon dioxide emissions in the electric power sector

Coal and natural gas are the primary sources of CO2 emissions from the electric power sector. Coal is the most significant contributor, emitting more than twice as much CO2 per megawatthour (mWh) as a combined-cycle plant fueled by natural gas. Generation using nuclear power and renewables does not emit CO2.

Because of the high CO2 intensity of coal, scenarios that result in less coal-fired electricity generation also result in the most significant emissions reductions. Total electric power sector CO2emissions in the Accelerated Coal Retirements case are 20% below those in the Reference case in 2040 (Figure IF6-6). Emissions are slightly higher in the Accelerated Coal and Nuclear Retirements case, because some nuclear power generation is replaced by gas-fired generation; however, the effect of the coal-fired capacity retirements still keeps emissions 14% below the Reference case level in 2040. In the Accelerated Nuclear Retirements case, nuclear generation is 328 mWh below the Reference case level in 2040, while electric power sector CO2 emissions are 85 million metric tons higher, reflecting an average increase of 0.26 metric tons CO2 per mWh reduction in nuclear generation across the two scenarios. The estimated increase in CO2emissions per mWh of nuclear generation reduced, which is slightly below the estimated increase in CO2 emissions per additional mWh of generation from advanced combined-cycle plants burning natural gas, reflects replacement generation from natural gas and renewables, together with some reduction in overall electricity demand as a result of higher end-user prices.


figure data

Retail electricity prices

Retail electricity prices vary in the accelerated retirement cases, because natural gas prices are a key determinant of wholesale electricity prices, which in turn are a significant component of retail electricity prices. Accordingly, the cases with the highest delivered natural gas prices also show the highest retail electricity prices (Figure IF6-7). In 2040, real retail electricity prices in the Accelerated Coal and Nuclear Retirements case are 12% higher than those in the Reference case.


figure data

Conclusions

Accelerated retirements of coal-fired and nuclear electricity generation capacity would cause natural gas and renewables to gain an increased share in the nation’s electricity generation mix. Natural gas is most often the lowest-cost option for replacement capacity, while renewable generation grows, spurred by the increased economic competitiveness of solar and wind technologies toward the end of the projection period. The rising use of natural gas in the electric power sector results in price increases for both natural gas and electricity in all sectors relative to the Reference case (Table IF6-1).

Table IF6-1. Average delivered natural gas prices, electricity prices, and carbon diioxide emissions in four cases, 2012, 2025, and 2040
Year and case Average delivered natural gas price to power sector
(2012 dollars per million Btu)
Retail electricity price
(2012 cents per kilowatthour)
Electric power sector carbon dioxide emissions
(million metric tons)
2012 3.44 9.8 2,039
2025
Reference 5.75 10.1 2,194
Accelerated Coal Retirements 5.91 10.5 1,925
Accelerated Nuclear
Retirements
5.69 10.2 2,188
Accelerated Coal and Nuclear Retirements 5.92 10.6 1,923
2040
Reference 8.16 11.1 2,271
Accelerated Coal Retirements 8.60 12.0 1,821
Accelerated Nuclear
Retirements
8.57 11.5 2,356
Accelerated Coal and Nuclear Retirements 9.03 12.5 1,946
Average delivered natural gas prices, electricity prices, and carbon dioxide emissions in four cases, 2012, 2025, and 2040. History: U.S. Energy Information Administration, Monthly Energy Review September 2013, DOE/EIA-0035 (2013/09) (Washington, DC, September 2013). Projections: AEO2014 National Energy Modeling System, runs REF2014.D102413A, HCLONUC.D012314A, HCCSTOM.D012314A, and LOWNUC14.D012314B.

Endnotes

  1. Entergy, “Entergy to close, decommission Vermont Yankee” (Press Release, August 27, 2013; accessed March 25, 2014), http://www.entergy.com/news_room/newsrelease.aspx?NR_ID=2769.
  2. Exelon Corporation, “Exelon to retire Oyster Creek generating station in 2019″ (Press Release, December 8, 2010; accessed March 25, 2014),http://www.exeloncorp.com/newsroom/pr_20101208_Nuclear_OysterCreekRetirement.aspx.
  3. M. Wallace and G.D. Banks, Restoring U.S. Leadership in Nuclear Energy (Center for Strategic & International Studies, Washington, DC, June 2013),http://csis.org/publication/restoring-us-leadership-nuclear-energy.
  4. The U.S. Energy Information Administration analysis assumes competitive economics for electric power capacity, in which variable costs determine dispatch, and fixed costs must also be paid by electric sales revenue to continue operation over the long term.
  5. Capacity payments provide units with revenue for being available to run in order to ensure reliability. Capacity payments can account for a significant portion of revenue for peak load plants, which do not run often and require financial incentives to remain available for dispatch.
  6. U.S. Energy Information Administration, “Dark spreads measure returns over fuel costs of coal-fired generation,” Today In Energy (February 20, 2013),http://www.eia.gov/todayinenergy/detail.cfm?id=10051.
  7. U.S. Energy Information Administration, “Electric generator dispatch depends on system demand and the relative cost of operation,” Today In Energy (August 17, 2012),http://www.eia.gov/todayinenergy/detail.cfm?id=7590.
  8. U.S. Energy Information Administration, “Assumptions to AEO2014: Electricity Market Module” (forthcoming), http://www.eia.gov/forecasts/aeo/assumptions/.
  9. S. Ferris, “Hatfield’s Ferry Power Station quietly closes for good,” Herald Standard (Uniontown, PA, October 20, 2013), http://www.heraldstandard.com/new_today/hatfield-s-ferry-power-station-quietly-closes-for-good/article_cd0133e1-9adb-58c2-8f8d-66769de34835.html. Installing control equipment does not guarantee that a plant will remain economical to continue operating. Retirement of the Hatsfield’s Ferry power station in Pennsylvania was announced after installation of a $650 million FGD scrubber system in 2009. However, in the AEO2014 Reference case most coal-fired power plants continue operating despite the regulatory hurdle of MATS in 2016.
  10. Electric Utility Cost Group (EUCG), via Nuclear Energy Institute, “Annual briefing for the financial community” (February 13, 2014), http://www.nei.org/Issues-Policy/Economics/Financial-Analyst-Briefings/Nuclear-Energy-in-2014-Status-and-Outlook.
  11. The 2025 average price of natural gas price delivered to the electric power sector in the Accelerated Nuclear Retirements case is slightly lower than the price in the Reference case due to a decline in LNG export capacity additions. The retirement of nuclear capacity in the Accelerated Nuclear Retirements case after 2030 causes an increase in demand from the electric power sector, resulting in higher natural gas prices, and the anticipation of higher prices reduces the economic competitiveness of LNG export facilities, lowering LNG export projections. This results in lower natural gas prices in the Accelerated Nuclear Retirements case between 2022 and 2032, because less natural gas is exported. Demand from the power sector does not change significantly from the Reference case until significant amounts of nuclear capacity are retired.

 






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  • Doug

    It’s always fun to poke at complex projections on the future of nuclear, coal, natural gas, hydro, solar, wind and geothermal. It wasn’t clear to me if this analysis was performed at the level of detail of individual plant locations. Some anecdotal mentions were made, for instance the (early) retirement of SONGS.

    What would be truly interesting is to get detailed analysis on each coal and nuclear facility plant by plant. Of the 310GW in coal capacity, which specific plants are forecast to be non-economic or must shutter because of the new regulations that the owner cannot afford to meet?

  • Others

    Read the actual news.

    http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1

    Coal fired power generation has increased a lot as the natgas prices has gone above $3. Only at $2/therm, natgas can compete with Coal.

    The sweet spots of shale natgas has gone, now a days with companies drilling deeper, cost of natgas will keep increasing.

    Meanwhile Nuclear power generation also has increased because of their uprating and increased efficiency factors. Soon the EVs and plugins will increase Coal and Nuclear further.

    • Bob_Wallace

      I’d suggest you not bet your lunch money on that outcome.

      We’re in the process of closing about 200 coal plants. And building no new ones. Going to be a bit difficult to burn more in less.

      We just closed/scheduled to close five reactors. Exelon is making noises about closing some or all of the six of theirs that been losing money for the last five years. We’ve got another dozen or so in financial straights. And we’re building only five.

      But if you wish, go ahead. Perhaps you enjoy the thrills of very long shots….

  • http://electrobatics.wordpress.com/ arne-nl

    I’m not sure why CleanTechnica is paying any attention to EIA projections. They have a solid track record of being wrong, way wrong.

    • JamesWimberley

      If these projections came from Fox “new”, right, But the EIA is the agency of the US government responsible for providing policymakers and the public with authoritative energy data. Every time they come out with another piece of junk, we have to call it. Eventually Secretary Moniz – a former MIT department head – will notice this part of his empire has a major credibility problem.

      • http://electrobatics.wordpress.com/ arne-nl

        I can imagine by the turn of the century that they were a sleepy government bureaucracy diligently processing the numbers. An agency completely unequipped to deal with disruptive changes.

        But a decade and a half later…. You might expect them to have learned from their mistakes and adapt their processes and models.

        Not so it seems. If it didn’t happen in all theses years, how much longer will it take?

        • Bob_Wallace

          Let’s not rule out Bush/Cheney “implants”.

  • LookingForward

    Like allways, the eiA is full of ….
    Right now coal is 1500TW anually, gas at 1000TW, nuclear at 750TW and renewables at about 5/600TW, if I rememeber correctly. With the masive before coal retirements we can assume that coal and gas are gonna switch production. Retiring Nuclear is being replaced and expanded by new nuclear. And renewables will keep on growing, no matter how the politics are, the pricetag will dictate that more and more in future.
    So fig IF6-4 is completely incorrect, I think/hope (with a little feeling and a lot of logic) it will be more like, petroleum dead, coal (nearly) dead, the rest will be about a third each and that will be big for gas and small for renewable. I think nuclear will expand a little over the coming decades for non-hydro/geo-base-load, renewables will do most of the rest and gas will cover the new peak loads (a couple of days with little sun or wind)

    • Matt

      Ok I know (based on all the predictions they print) that EIA hates renewables. But were is the neg-a-watts in their chart for new replacement? The can’t see any efficiency improvement coming?

      • LookingForward

        Yeah that’s weird too, they won’t assume extended incentives for renewables, but they will assume them for fossil fuels and apparently more incentives, cause they’re gonna need them from 2020 onward if they want to keep running, which they won’t get cause renewables will be to cheap.
        WOOHOO!!! :P

      • Calamity_Jean

        “…EIA hates renewables.”

        It isn’t so much that EIA hates renewables, it’s that they know that Congress hates renewables.

    • Bob_Wallace

      Retiring nuclear will not be replaced and expanded. That’s not happening.

      We closed/announced the closing of five reactors in 2013. We’ve got another dozen to two dozen hanging on for dear life. Exelon has six reactors that have been losing money for five years and they are starting to make noise about closing them.

      We’ve got only five under construction. They won’t be coming on line for years. And their power, best case, is going to be 11c/kWh. Twice the price of wind and (by then) twice the price of solar.

      There’s no serious building happening past these five. Companies are “thinking about it” but every year they think that new plant becomes less and less competitive. They’ll keep “thinking” until it’s time to commit and the math won’t work.

      New nuclear, and new coal, priced off the table.

    • http://electrobatics.wordpress.com/ arne-nl

      Probably you mean TWh instead of TW. 1500 TW of coal capacity would be rather impossible.

      • LookingForward

        Indeed :P
        “coal is (producing) 1500TW anually”

  • spec9

    If we installed solar PV, solar thermal, geothermal, hydropower, and wind fast enough then we would not need to build very many old fossil fuel plants to replace them. Do your part and install solar PV on your roof if you have one.

    • Bob_Wallace

      Excellent.

      And if you can’t install solar, or even if you can, conserve.

      Home Depot is now selling 60 watt replacement LEDs for less than $5. 100 watt replacement LEDs are under $20. No one should replace a frequently used incandescent with another incandescent at those prices.

      Maybe it’s time to ditch the beer refer in the garage? Or at least replace it with an efficient one?

  • JamesWimberley

    These EIA scenarios must be rejected out of hand. The climate crisis requires that CO2 emissions from US electricity generation must be slashed by 2040, not allowed to plateau. Fortunately the EIA’s assumptions about wind and solar are ridiculous.

    Notice the sleight of hand about nuclear retirements. The EIA reference case assumes that reactors will have their lives extended from 60 to 80 years; so retiring them at 60 (they’ve already been extended from their initially designed 40) is treated as “accelerated” retirement. Far from being normal, this second extension is very hypothetical and novel, and must assume a conscious and unlikely lowering of safety standards.

    • Bob_Wallace

      At the minimum extending nuclear reactor lifespans will require large expenditures. It might be possible to extend to 60 or even 80 years but with many reactors now not making enough to stay in business it’s likely that it won’t make financial sense to extend lifespans.

      Those extra years will come at a cost. Right now we’ve closed a half dozen reactors because upgrading them for service was found too expensive.

      • Ronald Brakels

        France’s nuclear plant life extension and post Fukushima safety improvements will increase the generating costs for older plants, which is most of them, by about 9.5% to 14.5%, which would make generating costs come to about 5.3 to 7.5 US cents per kilowatt-hour. Which isn’t cheap. But at least it’s a lot cheaper than electricity from the new Flammanville nuclear plant which might cost around 11 US cents a kilowatt-hour, although that’s looking a little optimistic at the moment.

        • Calamity_Jean

          “But at least it’s a lot cheaper than electricity from the new Flammanville nuclear plant which might cost around 11 US cents a kilowatt-hour, although that’s looking a little optimistic at the moment. “

          Ouch. And isn’t there a nuke plant under construction in the UK that is about the same projected price?

          France goes rather far south. If electric prices get raised too much, a lot of French folks are going to be putting solar panels on their roofs. There’s a lot of solar potential in France outside of the big cities.

          • Ronald Brakels

            No, there’s no nuclear planned nuclear plant in the UK that will charge 11 US cents a kilowatt-hour. The actual guaranteed figure is over 16 US cents a kilowatt-hour. About 16.2 at the moment using current exchange rates and including inflation since it is set in 2012 money.

            And electricity prices in France are already high enough for people to save money from installing rooftop solar in France. French people pay a heck of a lot more for electricity than Americans do. About 21 cents US a kilowatt-hour during the day if I recall correctly. So we can expect to see a rapid expansion of rooftop solar in France, which will be very helpful as they have problems meeting electricity demand in summer thanks to their reactors overheating river water.

          • Calamity_Jean

            “The actual guaranteed figure is over 16 US cents a kilowatt-hour. “

            Double ouch. I’m surprised the British put up with it.

            And hurray for the French! I hope every sunny roof soon has solar panels.

            “So we can expect to see a rapid expansion of rooftop solar in France…. “

  • heinbloed

    The forecasts of the EIA are dubious by nature.
    Check the forecasts made in the past and compare them to reality.

    As commentator “Fact” hinted already:

    The de-centralisation of electricity production and the conservation of energy on a national base as well as the socio-economic reality (available purchase power,declining living standards, stagnation of expected life time, declining birth rate) will play a role not included in the forecasts of the EIA. As usual.

    The fall of King Coal and Lord Atom comes at a mucher faster speed than ever predicted by the EIA ort the IEA or the IAEA. Check the real development of the last 10, 20 or 30 years and compare these with the forecasts made by the servants in the past.

    For example no one of these servants predicted a shrinkage of electricity generation/sales in Europe: 8% this century already.
    The official target is 20% energy saving, 20% efficiency increase and 20% RE by 2020 ….. This target might not be achieved but the trend is very clear.

    But for the USA there is no change predicted concerning conservation and efficiency. Why so? Doesn’t that suit the plans of the idle class?

    Adding 100GW of RE ( see figure IF 6-3) to the US-grid by 2040 is a joke.Little Germany added 70GW of new capacities in the last 10 or 12 jears.

    • LookingForward

      indeed it is, but EIA is thinking, when incentives stop renewables will stop and since they can’t make forecasts about future incentives they assume they will stop. stupid but true. Solar alone will reach 40/50GW new capacity by 2020 (including rooftop)

      • http://electrobatics.wordpress.com/ arne-nl

        “when incentives stop renewables will stop”

        The only explanation is that they use a very simplistic excel sheet handed to them by the ivory tower scientists that are only staring at their computer screens and never come out to see what happens in the real world: technological progress, lifestyle changes, policy, climate change, etc.

        And their mathematics skills are very basic. It is so bad, they don’t even understand exponential growth. Everything is a linear extrapolation from trends obtained from 5 year old data (newer data is likely still in the process of begin typed in).

  • Fact

    I still don’t get ‘flat electricity demand’ when ev adoption over the next 30 years is (hopefully) increasing dramatically. i would believe that this would increase demand, and likely make the profitability projections inaccurate.

    • Bob_Wallace

      Current demand has flattened (in the US) and is likely to decrease. We’ll add renewable faster than we add EVs.

      EVs are going to greatly aid wind farms. Onshore wind tends to blow harder late at night when demand is low. That power has to be sold for lower rates. EVs coming on line will create a larger late night demand as they charge while parked for the night. That means more profit for wind farms, more investment, and more wind farms built.

    • spec9

      LEDs replacing incandescents, flat panel LCDs replacing old CRT tubes, energy star appliances replacing old wasteful ones, tables and cellphones replacing desktop PCs are all reducing demand. EVs will increase energy demand but not the need the need for new power plants since EVs mainly charge at night when we have massive amounts of excess generating capacity.

    • http://electrobatics.wordpress.com/ arne-nl

      As a simple calculation can show, an overnight shift to a 100% electric LDV fleet would increase total electricity demand by less than 25%.

      The question is, can the US save 25% energy over the coming decades? European per capita energy consumption is about half of the US, yet we enjoy a high standard of living. So the answer is probably yes,. The US can shift to EV’s and power them by negawatts. But whether it will be done is ultimately a matter of will, not technology.

  • Michael Berndtson

    I live in Chicagoland, where 75 to 80 percent of my electricity is nuke generated so obviously this is not normal. There’s like 5 operating plants in Illinois not slated for shutdown. On the other hand, why didn’t the author(s) discuss new power plants under some level of development from planning through construction.

    Here’s a great article from Environmental Law and Policy center on energy development throughout the US: http://elpc.org/2014/04/15/chart-week-energy-capacity-development

    There’s like a bunch nuclear power plants in development throughout the US. From the Nuclear Energy Institute:

    http://www.nei.org/Knowledge-Center/Nuclear-Statistics/US-Nuclear-Power-Plants/New-Nuclear-Plant-Status

    From this table there’s 25 plants slated for development. Some have permitting issues. Some are moving forward. About 5 are under construction as of the date of the table, January 2014.

    Between this post and New York Times editorial board stumping for nuke a few days ago (google it, I’m too lazy to cite while on a rant), I got to think there’s something connected. Like how can more of the development cost get passed onto ratepayers and taxpayers so investors can get richer? Or how can investors become indemnified for financial loss? Or cynically, how can investors be shielded from liability? All the while using climate change concerns to freak everybody out on one hand – and promoting fracked gas on the other. And if there was a third hand, downplaying the utility of renewables.

    • Bob_Wallace

      It’s not very likely that we’ll see many more reactors past the current five. The current five are demonstrations that costs have not come down.
      And at the same time the cost of wind and solar keep falling. We’ve identified where we can double hydro output. The cost of storage is falling.

      We’re likely to lose a couple dozen current reactors simply because they are not economically competitive. They are going bankrupt. You’ve got six reactors in Illinois which have been losing money for the last five years with no hope in sight for returning to profitability.

      If a paid off reactor can’t compete there is zero chance a newly build reactor can play.

      • Michael Berndtson

        Is it a matter of wanting to make more money? Or is it actual operating loss? I’m wondering how much the pending cost for managing high level nuclear waste looms with operators and investors. We’re still in interim onsite storage after, what, 50 years? This may contribute to some folk’s thinking on whether to get out of nuke or not.

        What freaks me out is when I read blogs or articles by relatively smart people on the over concern America has on nuclear power plant risks (life cycle). A one time event from a nuclear plant can outweigh many events from fossil fuel. And many many events from renewables. I believe nuke is an important tool in the mix, I just don’t want the risk downplayed. Especially by people who have never performed a risk assessment. Here’s an example of a famous risk communicator, David Ropeik:

        http://www.nytimes.com/2002/12/03/science/a-conversation-with-david-ropeik-the-fear-factor-meets-its-match.html

        and here’s the first one or two sentences immediately giving me pause:

        “In this world of new occupations, David Ropeik, a former television reporter, is the director of risk communication at the Harvard Center for Risk Analysis. As a professional ”risk communicator” for a research group, Mr. Ropeik writes essays, books and opinion articles about reasons for people’s fears, using the tools of statistics, psychology and evolutionary biology.”

        A couple folks from Harvard are telling us that there’s little risk for many things that seem risky to me.

        • Bob_Wallace

          Roughly 25% of our paid off nuclear reactors are in financial trouble. They can’t compete with wholesale grid prices of roughly 5c/kWh.

          It could be that some can break even, but return no profit. If that’s the case then one has to ask why a company would continue to operate and risk a disaster for no profit.

          Whatever the risk of a nuclear disaster, what must be understood is the likely impact of a nuclear disaster on US soil. We might melt one down, kill no one, ruin less land than a single mountain top removal operation, but the end result would be people in the streets demanding total and permanent closure of all nuclear plants.

          Would their behavior be rational or irrational? That does not matter. The outcome would be the same and that makes nuclear an investment too risky to consider.

    • Calamity_Jean

      I live in Chicagoland, where 75 to 80 percent of my electricity is nuke generated so obviously this is not normal.

      Are you sure? I’m in Chicago, and Commonwealth Edison sends out a notice once a year showing the source of their power. IIRC (I can’t find the last one), the mix is 3% or 4% hydro, wind, and “other”, and the remaining 95+% is almost evenly split between nuclear and coal.

      • Michael Berndtson

        It use to be about 80 percent nuke several years ago, maybe more. And that was from the annual statement. This could be over 5 years ago. I’m looking into right now. Illinois is all mixed up so to speak. There are several suburbs who did a deal with Peabody for coal generations at the Prairie State Energy Campus downstate. I believe several western suburbs and Winnetka got sucked into the deal. Chicago has its own deal with renewables if I’m not mistaken.

      • Michael Berndtson

        Exelon Corporate is 55% nuke, 28% gas, 6% hydro, and 3 or 4 percent for renewables, coal, other.

        http://www.exeloncorp.com/energy/generation/Pages/generation.aspx

        Here’s more on supply for Exelon Illinois. It’s all over the place. Nuke is probably above 55% at this point, but below 80%, since Illinois generates the most nuke power in the country, I think – I don’t want to be wrong in front of clean technica’s comments section muscle.

        http://www.exeloncorp.com/community/locations/illinois.aspx

        • Bob_Wallace

          You might want to give this article a read. it starts -

          CLINTON, Ill. — Exelon’s six nuclear power plants in Illinois have failed to turn a profit over the last five years, and the 27-year-old plant here is the most vulnerable for closing, a Chicago Tribune analysis has found.

          Chicago-based Exelon, parent of Commonwealth Edison, and the nation’s largest operator of nuclear power plants, said last month that unless market conditions improve, it will announce plant closings by the end of this year.

          http://articles.chicagotribune.com/2014-03-09/business/ct-exelon-closing-nuclear-plants-0308-biz-20140309_1_quad-cities-plant-byron-plant-exelon

          • Michael Berndtson

            Are you paid by clean technica to police the comments section? Or just have extra time on your hands? If so I’ll make sure to tread lightly or avoid getting into comment squabbles. I’m not that interested in nuke, it just is what it is – based on by ComEd bill. 2012 was about 78 percent nuke for me.

          • Bob_Wallace

            Just an humble volunteer.

            No harm in getting into squabbles. Just be prepared to back up claims that others might find questionable.

            And if proven wrong, take that information and grow. That’s what most of us here do.

          • Michael Berndtson

            I assumed you were a natural gas plant. Your tone seems to suggest that.

          • Bob_Wallace

            A natural gas plant? I have put on some weight recently, but I’m nowhere that large….

            My view on NG is it is something like chemo for cancer. Very nasty stuff, but right now it’s a tool we can use to get us from a predominately fossil fuel grid to a renewable grid. NG is, for the moment, standing in for storage while we develop cheaper storage.

            Doing a 1:1 coal replacement with NG buys us little (as long as we continue to let NG leak).

            But NG is dispatchable, it can be turned on and off quickly. NG can, for now, fill in the gaps between wind and sunshine. We can use a modest amount of NG to turn wind and solar into 24/365 grid power.

            40% wind + 30% solar + 30% NG is “replacing” 100% coal with 30% NG. A 70% reduction in fossil fuel use.

          • Michael Berndtson

            Plant as in shill. Here’s the thing about natural gas development. There are $ billions being spent on development of natural gas, natural gas liquids and oil and tar sands. Oil and gas aren’t separable. For every Marcellus there’s a Bakken shale producing liquids. Gas is simply vented or flared at will when oil is the money product. Russia is the worst right now for flaring. We’re no slouches either.

            Natural gas via shale is being proven, by production, to be less bountiful than when it was being sold by New York Times, Bloomberg, Sierra Club, EDF as a climate change fighting coal alternative. Combining transportation use options and LNG sales, gas will increase in price. This could improve renewables chances. Or not. It depends who wins at the State government levels. Many shale oil and gas producing states are already putting restrictions on renewable development. Ohio for instance. NRDC has a great example of State governments getting strong armed here:

            http://switchboard.nrdc.org/blogs/swilliams/ohio_senate_scheduled_to_vote.html

            You’re right, coal produces 2 carbon dioxide molecules for every 1 carbon dioxide molecule produced by gas burning – simply from stoichiometry of combustion. But extending throughout the life cycle of both raw materials, natural gas starts to lose its advantage. Natural gas requires an enormous amounts of mining for drilling materials, production equipment and transmission and distribution piping. An ever increasing amount of wells will have to be drilled and reconditioned to produce enough gas for a projected consumption. The advantage is still with gas until methane emissions comes in to play.

            Natural gas via shale fracturing is an environmental concern for both groundwater and breathing zone. Groundwater impact is only going to get worse – even after plugging and abandonment of wells. Inside Climate News (Lisa Song et al) are doing a great job covering the problems with fracking in Texas:

            http://insideclimatenews.org/news/20140411/report-offers-grim-predictions-south-texas-air-quality-amid-eagle-ford-oil-boom

            I’m not a fan of coal, but natural gas is not intended to be a bridge fuel by those invested in its development. (What’s the right distribution of generation is beyond me and this thread.) The same people promoting a natural gas economy are the same people submarining efficiency and renewables. And the same people promoting oil and tar sands mining.

          • Bob_Wallace

            Yes, I knew what you meant. Did I need to add a smiley face for you?

            Look, fossil fuels must go. I don’t think we disagree on that, do we?
            The issue is how we get rid of them. Some people think we should block them but I really don’t think that will work. The general public is not that concerned about climate change. Not concerned enough to give up electricity and vehicles.

            I think the only route to eliminating fossil fuels is to give people acceptable alternatives at an acceptable price. And we have to move gradually to a fossil fuel free grid. There’s no magic button we can push to get the job done over night. We’re looking at a 20 -30 year process, most likely.

            Natural gas is nasty. Fracking chemicals. All that stuff. You have that all down.

            Coal is nasty. People dying in underground mines, people dying from coal emissions, open pit mines, mountain top removal, pollution including mercury, monstrous coal ash dumps, ….

            NG is a tool we can use to cut coal use now. I’m really hoping that Ambri’s liquid metal battery will prove to be as good as claimed. If so, we can start eliminating NG as a fill-in in a couple/three years.

            According to the latest IPCC report greenhouse gas emissions in 2050 will have to be 40 to 70 percent lower than what they were in 2010. If we didn’t ever develop good storage (we already have pump-up hydro) we could cut our grid CO2 by that amount with NG.

          • Michael Berndtson

            Bob, I’m not sure you live in Illinois, but this has nothing to do with individual plants I believe. They may need to make a statement that’s bold and scary. From 4/30/14 Tribune:

            “In the Tribune interview before a conference call with investors, Crane also said the company does not support a 500-mile high-voltage transmission line project, which is pending approval at the Illinois Commerce Commission, that would bring more wind-generated power into the state from Iowa.”

            http://articles.chicagotribune.com/2014-04-30/business/chi-exelon-pepco-20140430_1_exelon-ceo-christopher-crane-market-exelon

            OMG. Here’s an awesome presentation from Exelon on nuclear from last month:

            http://www.usea.org/sites/default/files/event-/USEA%20WAV%20slides%20FINAL%20042014.pdf

            With Browner (former EPA head under Clinton) telling us all to go Nuclear yesterday – I’d say this is a concerted effort to bail out nuke for climate change – and to protect early investors.

          • Bob_Wallace

            Never lived in IL. Lived next door in Kalamazoo for three miserable winters. But that’s a different story.

            You do realize that the high CF for nuclear is simply because it’s impossible to turn them on and off quickly, don’t you?

            Wind and solar are easy to curtail. As is hydro. Natural gas can be shut down quickly and brought back up quickly (10-15 min for turbines, a couple hours for the secondary stage of CCNG plants). Coal can be shut off and brought back up in a few hours.

            Nuclear plants can take days to bring back on line. Because of that nuclear plant operators will pay other generators to curtail/shut down. Or, more often, they will sell at a loss in order to avoid stopping.

            Now, Exelon has six reactors in Illinois that have lost money for the last five years. Exelon, IMHO, is fishing for subsidies to keep those reactors on line. They want some sort of special fee structure that makes them profitable and let’s Exelon avoid taking a huge bath.

            Should they be paid to provide low carbon electricity? Perhaps.

            Long term? I don’t think so.

            Put a price on carbon. That will make those plants profitable for a while. At least until more renewables come on line and replace them.

            The decision you folks in that area, on that grid, are going to have to make is whether you pay more for electricity in order to save Exelon’s bacon or whether you bring in cheaper wind and develop some of your hydro potential.

          • Michael Berndtson

            Bob, that is completely besides the point. If you are going to play the role of comment section muscle for free, then at least discuss the topic at hand. The topic is the politics of nuclear not start up time. Your scolding is boring, when its irrelevant.

          • Bob_Wallace

            Michael, you are the one who posted the Exelon page on nuclear, bragging on nuclear’s high CF.

            If you post something then someone responding to it is getting off point?

            Explaining why nuclear has a high CF is scolding?

      • Michael Berndtson

        Wow. In 2005 Exelon (parent of ComEd) was 85 percent nuke for Illinois. The disclosure form is in PDF and located down the list in the link I included below. So sometime between 2005 and 2012 there was a switch. Here’s all the environmental disclosure inserts from ICC:

        http://www.icc.illinois.gov/electricity/EnvironmentalDisclosureArchive.aspx

        This has mostly to do with how the electricity business has gone from area utilities to national corporations. Illinois is increasingly getting more coal based so you’re right.

        • Calamity_Jean

          Well, I wasn’t totally right; natural gas is a lot higher than I remembered.

          Thanks for fact-checking me. I didn’t have time, real life intervened.

          • Michael Berndtson

            That sounds like a poor excuse. At what point does your life and the task at hand intersect? [i'm being silly] I usually shoot for “abouts” in the comments. Exactlys only if I’m getting paid. You can call me out on any number or assumption. Just be prepared for an OCD driven data dump.

            Nonetheless, you did get me looking at data I haven’t thought about in a long time. I was totally surprised how much coal has increased for ComEd in Illinois. Like I said, just several years ago nuke generated the lion’s share, between 75 and 85 percent. I’m guessing that Exelon can sell its nuke generated electricity on the market at a premium for marketers selling low carbon sourced electricity. Exelon (ComEd parent), seems to be playing politics with nuke plants.

          • Bob_Wallace

            “I’m guessing that Exelon can sell its nuke generated electricity on the market at a premium for marketers selling low carbon sourced electricity.”

            If they can, then why haven’t they been?

            Why has Exelon been enduring a loss for the last five years if there was a market somewhere that would make them profitable?

          • eveee

            Where is the “OCD driven data dump”? :). I prefer collated , referenced, and neatly organized data, relevant and laser focused on precisely defined assertions. All done in a logical and orderly fashion. Like this:
            http://www.energy.me/pdf/eme-PJM-disclosure-102012-2.pdf
            That’s from energy.me, which is sourced from PJM, the power ISO Chicago belongs to.
            The next is EIA, which is all Illinois.
            http://www.eia.gov/state/?sid=IL
            Another, this eere,

            http://apps1.eere.energy.gov/states/electricity_generation.cfm/state=IL

            The result? Illinois electricity production from coal dropped to about 50% in 2012. Looks like it’s going down. Two curiosities. Illinois switched to consumer choice, which is causing ratepayers scams, and Chicago belongs to PJM, an east coast iso that includes New Jersey , if my memory serves. That’s odd.

    • Doug

      I seriously doubt that many new nuclear power plants will be built. They cost too much and take too long to get regulatory approval. Not to mention the protests…

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