The writer, of Omaha, is a retired environmental engineer and an emeritus member of the American Nuclear Society.
A recent World-Herald article spoke of potential rate increases from the Omaha Public Power District. Some might argue these increases are due solely to issues at Fort Calhoun. But before we all jump on the “shut down Fort Calhoun” bandwagon, here are some thoughts to consider.
Since 2012, electricity-producing reactors have closed in six states — California, Florida, Wisconsin, Vermont, Massachusetts and New York — in large part due to competition from cheap natural gas.
Nuclear plants in several other states, including Iowa and Nebraska, are considered vulnerable. A top U.S. Energy Department official has warned that as many as one-third of the nation’s fleet of about 100 nuclear power plants could be shut down over the next decade.
Why is this happening?
Many argue that the loss of nuclear plants reflects the advent of the shale-gas revolution — innovative use of fracking and loose regulation resulting in booming gas production. Despite its abundance, natural gas has a serious downside. It accounts for one quarter of the greenhouse gas emissions from electricity production, and the burden of carbon dioxide and methane emissions will grow as the use of natural gas increases.
There is another, more troubling explanation for these trends. Nuclear power’s value as a carbon-free source of electricity and its critical importance for reliability as part of a balanced mix of energy sources are discounted as good-for-nothing in electricity markets. This market distortion puts nuclear power at a serious disadvantage when grid operators purchase electricity for a region.
Even the greatly improved performance of nuclear plants in recent years has not been able to offset the market’s tilt in favor of natural gas and heavily subsidized solar power and wind power, both of which are unreliable energy sources, requiring fossil-fuel plants to meet energy demands when the wind isn’t blowing and the sun isn’t shining.
A new study shows that closing a nuclear plant has enormous energy-replacement costs and significant environmental costs.
Two economists, Lucas Davis of the University of California-Berkeley and Catherine Hausman of the University of Michigan, found that after the twin-unit San Onofre nuclear plant in Southern California closed in 2012, electricity generating costs rose by $350 million during the year following the shutdown (“Market Impacts of a Nuclear Power Plant Closure,” Lucas Davis and Catherine Hausman, American Economic Journal: Applied Economics, 2016).
The study also determined that, based on the Interagency Working Group’s social cost of carbon, which is $35 per ton, the increased cost of carbon releases due to the need for replacement natural gas totaled $316 million. Carbon emissions rose by 9 million metric tons, which is equivalent to putting 2 million additional cars on the road.
Closing a nuclear plant results in the loss of several hundred jobs and substantial tax revenue for local governments. Consider what might happen if either the Cooper or Fort Calhoun plants were suddenly closed. Each plant employs between 400 and 700 workers, has a payroll of about $40 million and contributes $470 million to the local economy. Imagine what would happen to Blair or Auburn if $470 million were suddenly removed from the economy.
Without nuclear power, we will need to burn a lot more natural gas and build more pipelines to transport the gas to power plants. Complying with EPA’s carbon reduction rules will be impossible if we don’t keep our fleet of nuclear plants in operation.
States need to correct abnormalities in the electricity market. Illinois and New York have made some changes that recognize the economic and environmental value of nuclear power as part of a balanced mix of clean energy sources.
These are practical market modifications that will allow nuclear power to compete fairly in the years ahead. Nebraska should adopt the same policies so that Cooper and Fort Calhoun don’t slip away.