Despite aging nuclear plant retirements, the U.S. nuclear industry continues to support new development and advanced nuclear technologies.
The Administration supports continued federal nuclear energy program funding in its “all of the above” energy strategy. Despite aging plants challenged by low-cost natural gas-fired generation and several off-schedule new plant constructions, the nuclear energy industry will continue its vital role in the domestic energy mix. In addition, nuclear energy is particularly embraced by Republicans, including Sen. Lamar Alexander (R-TN), chair of the Senate Appropriations Subcommittee on Energy and Water Development, which will determine spending appropriations for federal energy projects.
In the U.S. nuclear power industry, aging plants are retiring and opting out of license renewals due to high maintenance costs, price competition from natural gas-fired generation, and unfavorable wholesale electricity market structure. On December 29, 2014, the Vermont Public Service Department (PSD) announced the official closure of Entergy’s Vermont Yankee Nuclear Power Station, despite its operating license being valid through 2032. The plant began operations in 1972. In closing the plant, Entergy cited financial considerations related to the plant’s high cost structure, low natural gas price impacts, and wholesale market design flaws. The company says the market design flaws resulted in artificially low energy and capacity prices in the region, and that the design does not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide. The plant operated in the New England Independent System Operator (ISO-NE) region, which experienced record low average wholesale energy prices of $36.09/MWh in 2012. The ISO approved the retirement, but the loss of capacity adds to New England’s winter electric reliability challenges, as the region continues to struggle to adequately supply its gas-fired generators in times of prolonged extreme winter weather. Regional economic activity is expected to decline by approximately $500M annually as a result of Vermont Yankee’s closure.
New England has not been the only region to lose nuclear capacity over high operational costs. Dominion’s closure of its single unit Kewaunee plant (Wisconsin) in May 2013 was also due to low wholesale electricity prices; natural gas-fired generation is both cheap and abundant compared to nuclear. San Onofre (California) and Crystal River (Florida) plants closed due to problems related to steam generator replacements. There are currently 99 operating reactor units with approximately 100 GW of total summer capacity. The majority of nuclear plants are located along the eastern coast and Great Lakes regions.