Vermont Yankee Becomes Latest Casualty in Nuclear Generators’ Struggle against Low-Cost Natural Gas Generation

On December 29, 2014, Entergy permanently shut down the reactor at its 604.3 MW Vermont Yankee nuclear generating plant located in Vernon, Vermont. Though the facility was licensed to operate until 2032, it was closed for economic reasons, specifically “… sustained low natural gas prices and wholesale energy prices caused by a transformational shift in supply due to the impacts of shale gas.”

Key Details

  • Vermont Yankee is the fourth nuclear plant to close in the past two years (others being Kewaunee, San Onofre Generating Station, and Crystal River)
  • The retirement of Vermont Yankee will further increase New England ISO’s reliance on natural gas generation. The ISO has already stated that, “it is concerned about the amount of non-gas generators retiring, because it increases the region’s dependence on natural gas-fired generation” and notes that recent demand for natural gas has expanded faster than the pipeline capacity to deliver the fuel
  • Entergy estimates the total cost of decommissioning the plant will be $1.2 billion

Implications

  • The closure of yet another nuclear facility will put additional pressure on states that must comply with the EPA’s proposed Clean Power Plan, as one of the four “building blocks” available to states for reducing carbon emissions from power plants is to increase the use of zero- and low-emitting power sources—like nuclear
  • According to an economic study conducted by the UMASS Donahue Institute of Economic and Public Policy Research, the closure of the plant will result in the loss of more than 1,000 jobs (500 at the plant) and cut the size of the regional economy by more than $450 million by 2020

More Information

Contributing Author: Eric Hanson

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