NUCLEAR:

Spate of reactor closures threatens U.S. climate goals -- DOE

The Obama administration is concerned that a recent and growing spate of premature U.S. reactor closures could threaten the country's aggressive climate goals, a top Energy Department official said today.

Pete Lyons, DOE's assistant secretary for nuclear energy, told attendees at a Platts nuclear energy conference in Washington, D.C., today that his agency is reviewing how plant closures -- four in recent months -- are affecting the United States' ability to lower carbon dioxide emissions.

"This is a trend we are clearly very, very concerned about," Lyons said.

Lyons, a former member of the Nuclear Regulatory Commission and former science adviser to then-Sen. Pete Domenici (R-N.M.), has previously warned that nuclear power, critical for tackling climate change, is waning without a price on carbon in markets that don't recognize the value of carbon-free power (Greenwire, Nov. 12, 2013).

DOE is reviewing one scenario under which a third of the country's approximately 100 reactors would be shuttered. Lyons said such a situation could throw a wrench in the Obama administration's goal -- outlined in the president's Climate Action Plan unveiled in June -- of cutting emissions 17 percent below 2005 levels by 2020.

"If you look out longer, for the goals that have been set by 2035 and retirements that may occur along with this case, you're starting to see a very substantial impact on the nation's quest for clean energy," Lyons said.

The recent spate of closures has highlighted the plight of older nuclear plants facing near-term market challenges including competition from cheap natural gas and waning demand for electricity. Some operators have also cited subsidies for renewable energy.

Other facilities, like the San Onofre facility in California, experienced equipment failure that led to the plant's closure.

Industry officials have repeatedly pointed to the Kewaunee plant in Wisconsin last year as an example of a healthy plant forced to close early. Dominion closed the facility last year, blaming low demand and cheap gas, even though the reactor was performing well and was slated to run for another two decades.

Proponents of nuclear power at the conference acknowledged the industry's struggle while pointing to new construction in the Southeast.

Donald Hoffman, president of the American Nuclear Society, said the share of the nation's total electricity supply provided by nuclear power, which has averaged about 20 percent since 1990, has now fallen to 18 percent. "Nuclear provides about 18 percent, for the longest time we've talked about 20 percent, for the longest time we talked about the fleet of 104 reactors," Hoffman said. "Where we're at, that's somewhat changed, unfortunately."

Hoffman laid out a number of critical steps to ensure that the nuclear industry remains strong in the United States and reiterated calls for the government to treat the U.S. nuclear fleet as a "national asset." Hoffman said it's also critical for the Department of Defense to be an "eager lead customer" of small modular reactors, new technology currently being developed with federal cost-share dollars through DOE, and for the country to find a way to store and dispose of spent reactor fuel.

The focus now is squarely on new construction in Georgia and South Carolina, as well as the development of small modular reactors through a DOE cost-share program.

Southern Co. is building two new reactors in Georgia at the Vogtle plant and attempting to secure an $8.4 billion loan guarantee. "We have delivered our documents to the DOE; we remain optimistic and expect closure soon," Cheri Collins, director of nuclear development at Southern, said today.

The industry and DOE also have high hopes for potentially cheaper, transportable small modular reactors.

Christofer Mowry, president of Babcock & Wilcox mPower Inc., rejected assertions that SMRs cannot replace retiring coal plants or that the technology is still decades away. The small reactors, he said, are instead only years away and are poised to provide utilities an alternative to heavy reliance on natural gas.

"It means that utilities on a going-forward basis have an option; it's not just 'Hey, I'm retiring this coal asset, and I have to replace it with a combined-cycle asset,'" he said.

The Tennessee Valley Authority is partnering with engineering giant Babcock & Wilcox Co. to build an mPower small reactor at the utility's Clinch River site in Oak Ridge, Tenn. The unit is slated to produce 180 megawatts and is about a sixth the size of a large light-water reactor. The units will be built in factories and shipped by rail to the plant site.

Joe Grimes, TVA's executive vice president and chief nuclear officer, said TVA has already invested more than $5 billion to reduce its emissions and is interested in leaning harder on nuclear power. TVA -- which recently shuttered eight coal-fired units in north Alabama and Kentucky -- is working to complete its partially finished Watts Bar Unit 2 reactor in Rhea County, Tenn.

Grimes said new nuclear power is critical to ensuring that utilities can access cheap, reliable baseload power and to reduce carbon emissions.

"We need to plan on having nuclear as our future," he said.