More nukes are shutting down than getting built.
Cheap and plentiful natural gas accomplished what thousands of anti-nuclear protesters could not: shut down the Yankee Nuclear Power Station in Vernon, VT. In late August 2013, the operator of the plant, Entergy Corp., the second biggest operator of nuclear reactors in the US after Exelon, announced that the decision to close the 41-year-old boiling water reactor was purely economic, namely sustained low natural gas prices and low wholesale energy prices in the Northeast.
Source: U.S. Energy Information Administration, Annual Energy Outlook 2013, EIA-860, and EIA-923
Louisiana-based Entergy also blamed “wholesale market design flaws,” which it claims “continue to result in artificially low energy and capacity prices in the region, and do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide.” All generators in New England bid into the market operated by ISO New England, as in other parts of the US where competitive wholesale markets exist.
The plant began operating in 1972 under a 40-year operating license issued by the Atomic Energy Commission, the predecessor to the Nuclear Regulatory Commission (NRC). Entergy bought the plant from a group of New England utilities in 2002. Despite strong opposition from the anti-nuclear lobby, in 2011, the NRC issued a 20-year license extension that allows it to operate until 2032, a mute issue now.
Source: The Economist, 2 Mar 2013 based on data from Bloomberg
According to Bill Mohl, president of Entergy Wholesale Commodities quoted in a 27 August 2013 article in the Wall Street Journal, “The bottom line is the plant’s costs exceed its revenue as we look into the future. The decision was solely based on economics.” Mr. Mohl said the plant’s output today is worth about half as much as in 2008, blaming depressed wholesale power prices – currently around $40-50/MWh from $90-100/MWh in 2008. Making matters worse, operational costs have risen 15-20% over the same period, even before the additional safety costs imposed after the Fukushima accident are counted.
Entergy’s decision to decommission the aging VT reactor follows recent move by three other US utilities to shut down existing nuclear plants ahead of the expiration of their operating licenses: Southern California Edison Company (SCE) is decommissioning its two-reactors at San Onofre Nuclear Generating Station (SONGS) in Southern California, Dominion Resources has decided to shutter its Kewaunee plant in Wisconsin, and Duke Energy is closing the Crystal River plant in Florida.
As a sign of how bad the US nuclear prospects are, in July 2013, Electricite de France (EDF) announced that it was withdrawing from the North American nuclear market, period. Low demand growth, low natural gas prices, and depressed wholesale prices are not good for nuclear business.
