Nuclear Plants, Despite Safety Concerns, Gain Support as Clean Energy Sources

The Three Mile Island nuclear power plant in Pennsylvania. Exelon, the plant’s owner, is considering closing two of its nuclear facilities. Credit Carolyn Kaster/Associated Press 

Just a few years ago, the United States seemed poised to say farewell to nuclear energy. No company had completed a new plant in decades, and the disaster in Fukushima, Japan, in 2011 intensified public disenchantment with the technology, both here and abroad.

But as the Paris agreement on climate change has put pressure on the United States to reduce greenhouse gas emissions, some state and federal officials have deemed nuclear energy part of the solution. They are now scrambling to save existing plants that can no longer compete economically in a market flooded with cheap natural gas.

“We’re supposed to be adding zero-carbon sources, not subtracting,” Ernest Moniz, the energy secretary, said recently at a symposium that the department convened to explore ways to improve the industry’s prospects.

As a result, there are efforts across the country to bail out nuclear plants at risk of closing, with important test cases in Illinois, Ohio and New York, as well as proposed legislation in Congress.

Exelon, one of the country’s largest nuclear operators, for example, is deciding whether to close two of its struggling plants in Illinois after efforts to push a bailout through its Legislature fell apart.

Nuclear power remains mired in longstanding questions over waste disposal, its safety record after the catastrophes at places like Fukushima and Chernobyl, and the potential for its plants to be converted into weapon-making factories. In spite of the lingering issues, policy makers, analysts and executives, along with a growing number of environmentalists, say that at stake is the future of the country’s largest source of clean energy.

“Nothing else comes close,” Mr. Moniz, a nuclear physicist, said at the symposium.

In an interview on Tuesday, Mr. Moniz added, “Maintaining the nuclear fleet is really important for meeting our near-term and midterm goals.”

Renewable sources like solar and wind have grown in popularity in recent years, but nuclear plants provide nearly 60 percent of carbon-free power, followed by hydroelectric plants at roughly 18 percent, according to the Energy Information Administration. In addition, nuclear plants, which can produce power steadily and on demand, run at more than 90 percent of their capacity, higher than any other type of plant, including gas and coal facilities.

They also have the advantage of keeping fuel on-site, which allowed them to supply electricity during the extreme cold of the polar vortex in 2014, when the use of natural gas for heating led to shortages and when some coal plants shut down because of frozen fuel or equipment.

In recent years, a rise in greenhouse gas emissions has tended to follow nuclear plant closings, since they are most often replaced by natural gas, industry executives say. This was the case in California and New England after the San onofre and Vermont Yankee plants folded.

But the nuclear industry is facing a crisis of old age. The majority of the country’s 99 nuclear reactors are more than 30 years old and were opened before deregulation. Starting in the late 1970s, under federal rules established to help reduce the price of electricity, independent power producers gained the ability to compete in wholesale electricity markets. When prices were relatively high, nuclear plants were able to fare well because their facilities, once up and running, were inexpensive to operate.

However, the recent slowdown in the demand for electricity and the glut of natural gas from the rise in fracking has driven down wholesale prices. That lower revenue poses special challenges for nuclear plants, which operate potentially for as long as 80 years, and so require costly upgrades and repairs during their life spans.

“At these prices,” said Jay Apt, a professor and a director of the Electricity Industry Center at Carnegie Mellon University, “they can’t save up enough to have cash on hand for periodic capital investments.”

Supporters of the bailouts say the current prices undervalue nuclear power, given the method’s lack of greenhouse gas emissions and ability to operate at all hours. The low prices make it hard for the plants to compete with other clean technologies like wind and solar, which receive subsidies and are bolstered by mandates that require purchases of clean power. They argue that the environmental and efficiency value of nuclear plants mean they should be eligible for similar subsidies or be included in clean energy mandates.

“We get no recognition for the fact that we emit nothing,” said Marvin S. Fertel, chief executive of the Nuclear Energy Institute, an industry trade group.

Support for plans to save nuclear energy has come from a seemingly unlikely group — environmentalists, some who have come to believe that the climate benefits of nuclear energy far outweigh the risks.

Michael Shellenberger, president of Environmental Progress, a nonprofit research and policy organization, said that because nuclear plants produce so much more energy than other forms, they can be more environmentally friendly than even renewables when all the mining, development and land disturbances are taken into account.

“Those of us who have changed our minds on it have changed most often on the climate stuff,” Mr. Shellenberger said, “but from the whole life-cycle analysis, it’s just better.”

Opponents argue that the industry has already had decades of support, which made many of the companies that own the plants profitable, and that further subsidizing nuclear energy would take momentum and investment away from renewables like solar and wind.

“We need to be building the 21st-century energy system and not continuing to subsidize the energy system of the past,” said Abraham Scarr, director of the Illinois Public Interest Research Group, a consumer advocate.

Without help, nuclear officials say, there will be far less nuclear power. Two Exelon plants, Quad Cities in Illinois and Three Mile Island in Pennsylvania, for instance, were unable to submit winning bids in a recent auction to meet future energy needs in the PJM territory, covering 13 Middle Atlantic and Midwestern states and the District of Columbia.

After the auction, Christopher M. Crane, chief executive at Exelon, said that by itself the market “can’t preserve zero-carbon emitting nuclear plants that are facing the lowest wholesale energy prices in 15 years.”

Exelon pressured the Illinois State Legislature to approve a raft of energy measures, including extra subsidies for nuclear as a zero-carbon energy source, by the end of May or risk the shutdown of the two plants. However, the proposals never came up for a vote.

Exelon, which has not yet announced a decision on the plants, is hardly the only company seeking more income for its facilities.

In March, Ohio regulators approved plans between the utilities and power generation subsidiaries of FirstEnergy and AEP that guaranteed set rates for power from some struggling nuclear and coal plants, even if other plants in the market charged less.

But federal regulators blocked the arrangement pending a review. FirstEnergy is now pursuing an amended version, which executives hope will go forward with state approval alone. It would allow the company to charge customers for the shortfall between the costs to operate the plants and the market rate it receives over the next eight years; customers would receive credit if the rate rose above the costs.

In New York, officials are taking a different approach. Public hearings were held last month on a proposed clean energy mandate that would include an credit paid to nuclear operators, aimed at helping keep upstate plants like FitzPatrick in Oswego County in operation.
 
The Exelon proposal in Illinois followed a similar logic but attracted a number of critics — including the state attorney general, Lisa Madigan — who said that customers had paid for the plants twice and should not have to pay again, especially when Exelon’s overall finances may not be so dire.

“The disruption in these communities if Exelon decides to shut down the plants is very significant and has a human consequence,” said Dave Lundy, a Chicago public relations executive who leads a coalition opposed to the proposal. “But I don’t know that they actually have to shut down these plants.”

Correction: June 3, 2016 

An article on Wednesday about efforts by state and federal officials to support existing nuclear plants misidentified the entities involved in trying to set above-market rates for power generated from some struggling coal and nuclear plants. The contracts would have been between AEP’s Ohio utility and its unregulated power-generation affiliate, and another contract would have been between FirstEnergy’s Ohio utilities and their unregulated generation affiliate; the contracts would not have been between AEP and FirstEnergy. The article also misstated the action taken by state regulators in Ohio. Regulators approved the rate plans — not the contracts — that would have allowed for above-market rates to go forward

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