Exelon: Illinois nuclear report highlights need to help plants

Nuclear energy critics were encouraged by the release of a voluminous report by Illinois officials last week examining the possible impacts if three of Exelon’s financially troubled nuclear plants in Illinois were to shut down.

They pointed to report findings that electricity supplies would not be seriously affected by closures, and that clean energy investments could partially mitigate the job losses and economic impacts.

But Exelon also praised the findings in the report, and said it supports the company’s assertions about the need for state action to avoid plant closures.

“Several of Illinois’ nuclear facilities, including the Byron, Quad Cities and Clinton stations, have been experiencing major annual losses in the past few years, and continuing to operate them at a loss would defy common business sense,” said Exelon spokesman Paul Elsberg. “If we do not see a path to sustainable profitability emerge for them, we will consider all options, including unit shutdowns.”

Elsberg said that the state has within the past seven years passed laws that support “clean coal,” wind, hydro, solar and biomass energy, and that nuclear energy should get similar treatment.

“Nuclear energy is the only energy source not recognized for the carbon-free energy it provides and needs to be included as part of an all-of-the-above energy strategy,” Elsberg said.

An Exelon statement provided by Elsberg indicated that the company interprets the report as supporting Exelon’s plea for state intervention to create “market-based solutions” favorable to nuclear power.

The Exelon statement cites potential economic impacts at the high end of a wide spectrum detailed in the report. The Exelon statement says:

“The report finds that closing the three Illinois nuclear plants at greatest risk of early retirement would have a significant negative economic impact on the state, including $1.8 billion in annual lost economic activity and more than 7,800 job losses, and that the resulting increase in carbon emissions would have a societal cost of more than $18 billion. It also concludes that the closures would increase wholesale electricity costs in the northern Illinois region served by ComEd by up to 9.9 percent, or $437 million, in the first year.”

The Illinois Department of Commerce and Economic Opportunity, one of four state agencies that created the report, found that the closure of the Byron, Clinton and Quad Cities nuclear plants would result in $1.8 billion of lost economic activity, including the loss of 2,500 direct and 4,431 indirect jobs.

The department said this impact could be mitigated by investment in renewable energy and energy efficiency, including the creation of 9,600 new jobs, though the report noted elsewhere that wind energy jobs taper off quickly when construction is completed and that energy efficiency has a low investment-to-job-creation return rate.

The Illinois Environmental Protection Agency estimated the “social cost of carbon” if the nuclear plants closed and were replaced by coal or gas plants that emit carbon dioxide. The agency predicted between $2.5 billion and $18.6 billion in social costs of carbon between 2020 and 2029, depending on how many of the nuclear plants retired and what energy sources replaced them.

The PJM regional transmission organization, working with the Illinois Commerce Commission on the report, found that plant retirements could increase load payments in ComEd’s zone (covering northern Illinois) by between $307 million and $437 million. It predicted load payment increases of 8.1 to 9.9 percent if all three plants closed, increases of under 1 percent if only Clinton closed; of 2.7 to 3.2 percent if Quad Cities closed and 5.1 to 6.8 percent if Byron closed. Over the entire PJM footprint, the increase would range from zero to 3.5 percent. Load payment increases could translate to higher rates for consumers.

The report explored “market-based solutions” including a cap-and-trade program, a carbon tax, a sustainable energy plan and a low-carbon portfolio standard, all measures that could make nuclear energy more competitive on the market.

State lawmakers or agency officials could potentially create such programs including as part of Illinois’ plan to comply with the U.S. Environmental Protection Agency’s mandates to reduce power plant emissions. However, the report notes that solutions to limit carbon emissions are typically more common and effective on a federal or regional level.

“We continue to believe that the best, most cost-effective approach for preserving the benefits these plants provide is a market-based solution that properly values the emissions-free, always-on energy they generate,” said Exelon’s statement. “The report presents several potential policy solutions and is a good starting point for discussions with lawmakers and other stakeholders about the right path forward for continuing to meet Illinois’ energy needs.”

Meanwhile the power company NRG provided their view on the state report. NRG is the country’s largest solar developer, with a total capacity of 53,000 MW also including natural gas, coal, oil and wind power. A statement from spokesman David Gaier said:

These reports demonstrate that the economic situation for multiple nuclear facilities is more manageable than originally thought. The report finds that the retirements of the Illinois nuclear fleet won’t cause reliability problems with the state’s electric supply, except under extreme scenarios never before seen in US energy markets.  In addition, short-term job losses could be replaced with increased investment in energy efficiency and renewable energy.

 

In any event, any subsidy to these plants, already paid for many times over, is unnecessary and could easily cost more than the rate increase costs of nuclear plant retirements. Allowing the market to work, which means no “subsidy legislation,” will save ratepayers more than $120 million per year and create almost 10,000 new Illinois jobs between now and 2020.

 

NRG is willing to invest in new energy projects in Illinois without additional ratepayer subsidies. Within the last 8 months, NRG has announced a Waukegan solar project; a fleet modernization plan with dramatic environmental improvements; an electric vehicle charging station network in Chicagoland; and is looking at opportunities to build additional clean generation. NRG made these investments with no direct assistance from Illinois taxpayers or ratepayers.

7 thoughts on “Exelon: Illinois nuclear report highlights need to help plants

  1. This is pretty important – a nuclear utility identifying the value of carbon reduction at $18 billion. It will take me a little while to figure out exactly what that means, but off the top of my head it probably means that efficiency and renewables are worth a lot more than the expanded subsidies the nuclear facilities are seeking.

    Ohio has one nuclear utility seeking $182 million per year to prop up its two nukes and allegedly three coal plants. This is more than three times what the same utility was spending on EE and RE, before the Ohio legislatures allowed them to cut their programs. Yet their programs would have allowed them to do without the nukes if continued for a reasonable time, and could be substantially expanded at no net cost to the public.

  2. Now that both sides have weighed in on the State Agencies’ report, it is important to realize that the Agencies took a very narrow field of examination, constrained by the specific requirements prescribed in the enabling Resolution, HR1146. They did not, and were not receptive to equally valid and impacting lines on investigation that were suggested by critics of the Exelon position, such as examining and comparing the negative effects that providing Exelon with a bailout would have on the renewable energy/energy efficiency sectors, which together provide over 4-1/2 times as many jobs in Illinois as ALL of Exelon’s operating reactors and secondary jobs combined, As a result, what we have here is self-fulfilling prophecy of incomplete and questionable validity, a “study to show,” rather than a legitimate “study to know.”

    The bottom line here is that Exelon’s co-opting the EPA carbon rule to subsidize uneconomic nuclear reactors parallels the blacksmith industry trying to inhibit the introduction of the automobile. The half-billion dollars would be better spent on forward thinking, 21st Century energy systems, not inflexible, anachronistic, aging nuclear reactors. Trading more plutonium for less carbon is just plain dumb energy policy, given the availability of viable energy alternatives. We would hope the Legislature and Gov. Rauner will recognize this, and be forward thinking in their decision on this issue.

  3. According to pp. 120ff. of the report, in the 3-plant replacement scenario “The SCC for each metric ton emitted in years 2020 thru 2024 is estimated to be $46, and $50 per metric ton emitted for the years 2025 thru 2029. 45,000,000 MWh of nuclear generation is replaced…SCC = $18.6 billion for emissions occurring over the decade of 2020 to 2029.” It does not appear to be the case that the estimated uses of energy efficiency and wind options were accorded the same SCC values, which would substantially increase the pool of cost-effective opportunities.

  4. I’ll try to make the math simple for you (Ned, David). To keep even the most “struggling” nuclear plant on line will only require one cent or so (per kW-hr) of support, and the needed support is likely to be only temporary. It is absolutely clear that building and operating renewable generation will cost far more than that. Providing temporary, marginal help for existing nuclear plants (that produce large amounts of emissions free power 24/7) is one of the most cost effective ways of reducing CO2.

    Negative impact on the renewable energy sector? It would be more relevent to ask about renewables negative impact on the nuclear sector. This especially given that a smaller amount of intermittent, non-emitting generation may end up resulting in the closure of a larger amount of 24/7, non-emitting generation. As a result, such “renewables investments” may actually result in increased CO2 emissions and pollution.

    Dave is advocating for a (govt. fiat) decision to choose to build renewables, and is trying to make economic arguments why such a fiat decision should be made. How about just taxing or limiting CO2 and letting the market decide how to respond (i.e., treating all non-emitting sources equally, thus allowing them to compete)? If Illinois did that, those plants would have no trouble staying open. Policies like Illinois Renewable Portfolio Standard, on the other hand, are indefensible policy and should be rescinded.

    Why all the effort/glee on the notion of replacing one non-emitting source (nuclear) with another (renewables) with relatively little concern over the continued use of fossil fuels. We need both, renewables and nuclear. Keeping existing nuclear open at least! (It’s not like we’re asking for a huge investment in new plants, as part of a govt. policy/decision.) Any renewables gains should be used to replace fossil fuels, not nuclear.

    Any real environmentalist would be trying to keep these plants open. There’s plenty of fossil generation in Illinois to replace, with renewables, for the forseeable future.

  5. (1) If they were too short-sighted to not invest in Renewable Energy knowing that their nuclear plants were unprofitable, then let them fail…..

    Or run the nuclear plants at a loss for the next 2 years while they invest/build heavily in Renewable Energy, which can be up-and-running and profitable in a short amount of time.

    (2) Nuclear energy is NOT carbon free—>

    Nuclear power plants release 90 – 140 g of CO2 per kwh

    (whereas Solar power, water power and wind power = 10 – 40 g CO2 per kwh)

    In addition, nuclear power plants release radioactive Carbon-14 which is converted to CO2. See here—>

    “Once formed, the carbon-14 is quickly oxidized to produce carbon dioxide, CO2”

    http://www.preparatorychemistry.com/bishop_book_atoms_16.pdf

    (3) In addition, nuclear power plants release dangerous cancer-causing radiation into the air and water during their “normal” operations.

    (4) Go to www dot thesolutionsproject dot org to learn how every state can be run ENTIRELY by Renewable Energy.

    (5) Go to www dot enenews dot com to learn what happens when nuclear energy goes WRONG.

  6. It appears that the crowd who wants the renewable energy market option needs to take a step back and review what’s on their plate. Will you all be complaining about the ugliness or the hum of the wind turbines? Can you live with drop in the bird population as they get hacked to shreds by the blades or scorched by the solar panel mirrors? Does Illinois have enough sun to drive the solar option? What’s the lifespan of the alternative methods. Nukes are 40 years plus extensions.
    I’m no chemist when it comes to those emission statements, but I’ve worked at the Exelon plants in question, except for Byron. A LOT of people depend on those plants as a source of income (maintenance and outage personnel). Give the nukes the same playing field as the alternative power sources and you’ll see that the nukes will crush the competition. Handily, I might add.