Oh, What a Month: Recapping the Month That Was in the U.S. Nuclear Industry

When it comes to historic months in the U.S. nuclear industry, few in recent memory compare to that of June 2016. Numerous events, both positive and negative, occurred last month that have the potential to significantly shape the industry for years to come. Some of these events are describe below.

Key Details

Date: 

June 2

Description of Event: 

Exelon announced that it would retire its Clinton Power Station (1,097 MW single-unit facility in MISO) and Quad Cities Generation Station (1.871 MW two-unit facility in PJM) in 2017 and 2018, respectively. Despite being two of Exelon’s higher performing plants, the facilities had lost a combined $800 million over the past seven years.

Impact: 

Negative


Date:

June 3

Description of Event:

Tennessee Valley Authority’s (TVA) Watts Bar Unit 2 began supplying electricity to the grid, making it the first commercial American nuclear reactor to be added to the grid in 20 years. The synchronization of the 1,150 MW reactor cumulated a 43-year journey for Unit 2 (TVA began construction on the unit in 1973, but suspended work from 1985-2007).

Impact:

Positive


Date:

June 5

Description of Event:

Two days after initial synchronization, TVA’s Watts Bar Unit 2 reactor automatically tripped when problems developed in the turbine system in the non-nuclear side of the plant. At the time of the trip, the reactor was running at approximately 18% of capacity. Though TVA was able to get the unit running again, it tripped once again on June 20 when an auxiliary feedwater system failed. At the time of the second shutdown, the unit was operating at approximately one-third of its capacity.

Impact:

TBD


Date:

June 7

Description of Event:

Exelon announced that it will apply for a 20-year license extension for its two-unit Peach Bottom plant in 2018. Units 2 and 3 both began commercial operation in 1974 and have a combined capacity of 2,599 MW. If approved, the extended operating license would allow Unit 2 to operate until 2053 and Unit 3 until 2054.The two units are co-owned 50-50 by Exelon and Public Service Electric and Gas.

Impact:

Positive


Date:

June 13

Description of Event:

Exelon notified the New York State Public Service Commission (PSC) that it would close its Ginna (597 MW plant located in Ontario, NY) and Nine Mile Point Unit 1 (640 MW plant located in Oswego, NY) reactors if the commission is unable to implement its proposal requiring all companies that sell electricity in the state to buy a percentage of its power from upstate nuclear plants by September 30. In response, the PSC indicated that it is in the process of developing “… a plan that will ensure the future viability of these emission-free resources…” Though regulators have indicated they will have a plan finalized sometime this summer, it is currently unclear how it will be implemented.

Impact:

Negative


Date:

June 15

Description of Event:

The U.S. Nuclear Regulatory Commission (NRC) completed a final safety evaluation for licenses at two 1,100 MW reactors in Levy County, Florida proposed by Duke Energy. The evaluation concluded that “…there are no safety aspects that would preclude issuing the license for construction and operation of the proposed reactors at the site.” Though many believed Duke Energy abandoned the project in 2013, the company has continued to move through the process of obtaining a combined construction and operating license (COL) from the NRC. The NRC is expected to make a final decision on the COL in October, and Duke has indicated that it will make its final determination regarding the future of the project once the NRC publishes its decision.

Impact:

TBD


Date:

June 16

Description of Event:

The Omaha Public Power District announced that that it would retire its Fort Calhoun Station (476 MW single-unit plant) by the end of the year. The board cited market conditions associated with low natural gas prices, unfavorable economies of scale associated with operating a single-unit facility, and the fact that the EPA’s proposed Clean Power Plan does not classify existing nuclear facilities as carbon-free generation as the primary reasons for closure. The estimated cost for decommissioning the Fort Calhoun Station is $1.2 billion.

Impact:

Negative


Date:

June 16

Description of Event:

The Wall Street Journal reported that environmental organizations such as The Sierra Club and The Environmental Defense Fund are in the process of reexamining their historical opposition to nuclear power. According to the report, the leaders of these organizations are starting to view nuclear power as a bridge to renewable electricity and an alternative to carbon-emitting coal and natural gas plants.

Impact:

TBD


Date:

June 17

Description of Event:

The U.S. Department of Energy (DOE) announced that it would be providing more than $82 million to fund nearly 100 advanced nuclear energy research projects. According to DOE Secretary Ernest Moniz, “[The] awards will help scientists and engineers as they continue to innovate with advanced nuclear technologies.”

Impact:

Positive


Date:

June 21

Description of Event:

Pacific Gas & Electric (PG&E) announced that it will no looker seek license renewals for its two-unit Diablo Canyon nuclear plant (combined capacity of 2,240 MW) when they expire in 2024 and 2025. According to PG&E, it will replace the lost capacity through a combination of energy efficiency, renewables, and energy storage projects. According to recent regulatory filings, the estimated cost of decommission the plant will be approximately $3.8 billion. Diablo Canyon is the last operating nuclear plant in California and currently generates approximately 9% of the state’s electricity.

Impact:

Negative


Though it is unlikely the U.S. nuclear industry will experience another month like June 2016 for some time, low natural gas prices, ongoing reductions in the cost of installed renewable energy resources, and the fact that nuclear power is not financially compensated for being a carbon-free baseload resource will continue to drive uncertainty in the industry.

More Information

This report is part of ScottMadden’s Nuclear Minute series. To view all featured Nuclear Minutes, please click here.

Additional Contributing Author: Eric Hanson

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