The Nuclear Way: We Can Reduce Greenhouse-Gas Emissions by Moving to Nuclear Power. By Jonathan Lesser
http://www.nationalreview.com/article/379599/nuclear-way-jonathan-lesser
It’s been an interesting few days for the electric industry. On Monday, the Environmental Protection Agency (EPA) released its long-anticipated proposed rule aimed at reducing greenhouse gas (GHG) emissions from the U.S. power sector. The proposed rule, to its credit, firmly acknowledges that maintaining the nation’s existing nuclear-power plants in operation is essential to meet these new GHG requirements. Compared with all other sources, nuclear energy is the nation’s undisputed zero-emission workhorse, providing over 60 percent of America’s clean energy. Now and for the foreseeable future, nuclear energy will remain the only resource capable of producing low-cost, dependable, around-the-clock, zero-emission electricity. Wisely, the EPA recommends that states take action to ensure the continued operation of these existing nuclear plants through their intended license lives.
The stakes are high. Last week, for example, PJM Interconnection, the organization that oversees the mid-Atlantic electric system, announced that four nuclear power plants in Illinois failed to clear in the PJM installed-capacity auction for 2017-18. The capacity market is a complex animal, and so are the words used to describe it. Suffice it to say that the phrase “failed to clear” represents code words for a plant that is not economically viable, as currently valued in the economic and political marketplace.
EPA administrator Gina McCarthy has recognized that the nation’s GHG-reduction goals cannot be achieved without nuclear power. Moreover, the nuclear plants in Illinois are not the older, smaller, and least cost-effective ones; they are large, dual-unit plants and among the most efficient generators in the country. These plants can out-compete all comers, save for one: endless government subsidies in the form of discriminatory tax breaks, such as the Production Tax Credit (PTC), which favor windmills above all other resources, and mandatory purchase requirements in states that have renewable-portfolio standards.
These government subsidies and their resulting unintended distortions of the market have badly tilted the playing field. The great irony of this week’s announcement is that, while the EPA recognizes the critical role of nuclear energy, it also insists on picking technology winners and losers that are, in turn, triggering the premature retirements of those same nuclear plants.
Some may argue that nuclear is not clean because it generates a volume of waste. But that is not what the EPA’s proposed rule regulates. It will regulate greenhouse gases. In fact, nuclear-waste regulation is not even within the EPA’s jurisdiction; it’s within the purview of the U.S. Nuclear Regulatory Commission. The EPA should not discriminate against resources that are fully licensed and comply with all NRC regulations, including those regarding nuclear waste.
The EPA rule should promote GHG reductions, rather than a narrow political agenda that arbitrarily anoints technology winners and losers. The EPA needs to acknowledge that intermittent resources such as wind and solar are not carbon-free: They require enormous amounts of backup generation, fueled primarily by carbon-emitting natural-gas plants. As more subsidized wind energy is built, more backup generation is required. The American Wind Energy Association (AWEA) recently released a report heralding wind power’s estimated reduction of 127 million tons of carbon in 2013 (“The Clean Air Benefits of Wind Energy,” May 27). But that report completely ignored the emissions from needed backup generation. EPA’s carbon proposal makes the same mistake. Note what has happened in Germany: Families have been impoverished and businesses rendered uncompetitive because they have been forced to spend billions subsidizing wind and solar energy, only to have carbon emissions increase. Why? Because wind and solar are backed up by coal plants running in standby mode to cover the grid when the sun doesn’t shine (often, in Germany) or the wind doesn’t blow, and because Germany foolishly decided to shutter the country’s nuclear plants.
Even ignoring the need for carbon-emitting backup generation, we cannot replace baseload nuclear energy with intermittent wind and solar resources. As shown below, in 2013, the total amount of installed nuclear generation was about 100,000 MW, compared with 61,000 MW of wind generation, a 65 percent difference. Yet that nuclear generation reduced CO2 emissions by 591.8 million tons, an almost five times greater impact on carbon reductions than the entirety of America’s 61,000 MW wind fleet.
Source: U.S. Energy Information Administration
Moreover, nuclear generation reduced SO2 emissions by almost 1 million tons in 2013, and NOx emissions by half a million tons — again, almost five times more than wind was able to achieve.
Nuclear generation provides steady and dependable supplies of electricity around the clock, day in and day out. It has the highest overall availability of any generating resource — better than coal, better than natural gas, and much better than wind. When electricity demand is greatest, nuclear is there. In contrast, wind generation provides low-value electricity. On hot and humid days, when power demand is at its highest, wind just isn’t there. According to data published by the U.S. Energy Information Administration in 2013, wind generation produced the least amount of power in the months of July and August, the time when we need it most. Instead, wind produces the most power at night and in the spring, when we least are in need of it. For example, in July 2012, the Chicago area experienced record-breaking heat and record-breaking electricity demand. On July 7, the hottest day of all, the 2,700 MW of wind generation in northern Illinois generated an average of just 4 MW of power.
Finally, wind power has very low power density, which means that each wind turbine requires lots and lots of land. That’s why wind turbines are typically located in remote rural areas where land is cheap. Consequently, wind generation has required billions of dollars of new transmission lines to be built — also paid for by consumers — to deliver wind generation to where it is needed.
Clean energy is important. But not all clean-energy policies are equal. The EPA rule has the potential to become a catalyst for a technology-neutral approach that reduces GHG emissions at the lowest possible cost and ensures the reliable electricity supplies vital to America’s competitiveness — but it could also become yet another subsidy scheme disguised as an air-pollution rule, which will undermine both competitiveness and clean-energy goals.
Time will tell. In the meantime, power-grid operators and states would do well to heed EPA’s advice to preserve nuclear energy as part of the compliance program with the new rules. Likewise, the federal government and state governments should eliminate the market-distorting subsidies that are undermining zero-emission resources, such as nuclear and hydro, and ultimately our collective future.
For its part, AWEA heralded EPA’s new rule as a major driver for the wind industry. The wind industry has wrung out the benefits of multiple overlapping subsidies for decades — mandatory purchases by utilities under the Public Utilities Regulatory Policy Act of 1978, accelerated depreciation, the PTC, state renewable-portfolio-standard mandates, and federal stimulus programs — to the tune of tens of billions. It’s long past time to eliminate these subsidies, now that the wind industry has additional financial sponsorship courtesy of the EPA. Or is this just another political sop that will further extend wind energy’s claims on the federal fisc?
— Jonathan Lesser is the president of Continental Economics, Inc.
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