EPA’s proposed carbon rules provide subsidies to uneconomic, aging, dangerous nuclear reactors

The Environmental Protection Agency’s long-awaited proposed rules to attain carbon emission reductions from existing power plants was released today.

We’ve noticed some environmental groups already have sent out mass e-mails urging their members to support the proposal. Not so fast. Very few government rule proposals deserve unqualified support and this proposal is no exception.

Indeed, its 645-page text includes some–although oddly worded and wholly unnecessary–support for nuclear power. The support is not only unnecessary, it would be counterproductive to building a clean, carbon-free energy system.  

The EPA appears concerned that some uneconomic, aging reactors will close during the next few years–as we’ve been arguing they will and should for months. So the EPA came up with the idea of allowing states to partially subsidize these reactors. As worded, it seems that EPA would encourage ratepayer subsidies to support six percent of a state’s existing nuclear generating capacity. That’s a strange formulation and is based on the notion that about six percent of the nation’s nuclear capacity is uneconomic and thus subject to early shutdown. But the concept doesn’t necessarily work well on a state-by-state basis, so it’s not clear that this would really be helpful to the industry. And it’s probably less helpful than EPA appeared willing to support in some earlier drafts of the proposed rules.

However, since the proposal is so poorly worded, it is possible EPA means that subsidies should be allowed for all nuclear capacity in order to save the six percent it thinks might close otherwise. That certainly would be an unwarranted and very costly subsidy for ratepayers. The lawyers are looking into this and we’ll let you know what they conclude…

The nuclear industry seemed relatively pleased, although not exuberant, with the proposal, which leaves implementation of carbon reduction goals mostly up to the states. Nuclear Energy Institute CEO Marvin Fertel told Greenwire that the next push for the industry at the state level will be to add nuclear power to existing state Renewable Energy Standards, “We have a bunch of states that have renewable portfolio standards; we think you ought to be basically looking at in the state maybe a clean energy standard … and you should be including nuclear as a part of that,” Fertel said.

We’ve been saying here for several weeks that the state implementation plans for carbon reductions will be the next key nuclear battleground, and the proposed rule makes clear that will be the case.

The proposed rule also appears to greatly understate both the possible and nearly inevitable contributions renewable energy will provide. And EPA actually admits it understates those contributions. Basically, EPA set renewable energy targets for every state (except, again oddly, Vermont and Washington, DC) based on something–we’re not clear what. But these targets are lower than many states’ existing Renewable Energy Standards, and EPA’s projections of the growth of renewable energy capacity are much lower than other projections, and lower than the actual current growth rates.

That means the very small amount of nuclear capacity EPA is concerned about, which is less than 1 1/2 percent of U.S. electricity supply, could (and should be) easily be replaced with renewables and efficiency.

Comments on the EPA proposal will be due around October 1, and there will also be four public hearings on the proposal: in both Atlanta and Denver on July 29, at the Sam Nunn Atlanta Federal Center Main Tower Bridge Conference Area, Conference Room B, 61 Forsyth Street, SW, Atlanta, GA 30303 and at EPA’s Region 8 Building, 1595 Wynkoop Street, Denver, Colorado 80202. On July 31, a public hearing will be held in Pittsburgh, Pennsylvania at the William S. Moorhead Federal Building, Room 1310, 1000 Liberty Avenue Pittsburgh, Pennsylvania 15222. And during the week of July 28, 2014, a public hearing will be convened in Washington, DC with details to be announced.

NIRS will be preparing comments for organizational sign-on as well as to assist individuals to submit comments–and it will be important for as many people as possible to participate and submit your comments.

NIRS’ released a media statement today on the proposal:

EPA CARBON RULE OFFERS MISGUIDED SUBSIDIES FOR UNECONOMIC, AGING AND DANGEROUS NUCLEAR REACTORS

CARBON REDUCTIONS WOULD BE GREATER AND COSTS LOWER IF SUCH REACTORS WERE REPLACED WITH RENEWABLES AND EFFICIENCY

The Environmental Protection Agency’s (EPA) proposed rules on carbon reductions from existing power plants released today would encourage states to provide ratepayer subsidies for continued operation of nuclear reactors that cannot compete economically in the current electricity marketplace.

Six nuclear reactors have either closed permanently or announced their planned early shutdown (San Onofre-1 & 2, Crystal River, Kewaunee, Vermont Yankee, Oyster Creek) and a dozen or more other reactors have been widely reported to be operating close to or at a financial loss. Some of these reactors face potentially costly post-Fukushima safety modifications as well, calling their long-term viability into doubt. Most recently, five reactors owned by Exelon, the nation’s largest nuclear utility, were shut out of last week’s PJM auction because of their high costs and lack of need for their electricity. (See Exelon loses big in PJM electricity auction).

According to the EPA, about six percent of the nation’s nuclear capacity could be expected to close early over the next few years. This amounts to about 5.7 GW of electricity, or less than 1½ percent of the nation’s electricity supply, a miniscule level easy to replace with clean energy sources.

The EPA proposal cites a Credit Suisse study that indicates “nuclear units may be experiencing up to a $6/MWh shortfall in covering their operating costs with electricity sales.” The EPA proposal leaves actual implementation of its carbon reduction goals up to the states, but states, “EPA views this cost as reasonable. We therefore propose that the emission reductions supported by retaining in operation six percent of each state’s historical nuclear capacity should be factored into the state goals for the respective states.”

Said Tim Judson, executive director of Nuclear Information and Resource Service (NIRS), “While we celebrate the EPA setting a path for reducing carbon emissions, the proposed subsidies for nuclear power are both misplaced and ineffective. If the agency is concerned about the emissions impacts of closing uneconomical nuclear plants, it should just ensure that they are replaced with renewable energy sources and efficiency. Uneconomical reactors can be replaced more cost-effectively that way, and ratepayers shouldn’t be forced to throw good money at fifty-year old technology forever. In fact, EPA’s projections for renewable energy are so low that retiring nuclear plants could actually be an incentive for further developing renewables and driving the shift to a green energy economy. Even though nuclear reactors have low “tailpipe” emissions, nuclear power has a much larger carbon footprint than wind, solar, and efficiency. Replacing uncompetitive reactors with sustainable sources would in fact be another option to reduce emissions, a net positive for the economy and the climate.”

The EPA proposal would also include new reactors, including the five currently under construction (Vogtle-1 & 2, Summer-1 & 2, and Watts Bar-2), as counting toward meeting CO2 emissions goals.

On renewable energy, the EPA supplied a state-by-state chart of renewable energy targets, many of which even EPA admits are lower than existing state Renewable Energy Standards require. EPA also predicts a slower growth rate for renewable energy than is currently the case. The proposal thus understates the potential for renewable energy to supplant both existing coal and nuclear power plants.

Added NIRS’ President, Michael Mariotte, “The EPA should drop all support for nuclear power in its final rule. The approach the EPA is taking is simply odd, and attempting to “preserve” the most uneconomic six percent of the nation’s nuclear capacity makes even less sense. Renewable energy and energy efficiency can more than make up for the retirement of these reactors—and should. This would provide greater carbon reductions, lower electricity rates and a higher margin of safety for the American people. Moreover, while we strongly support reducing the nation’s carbon footprint—and by a higher margin than the EPA’s proposal–it’s important to remember that carbon is not the only power plant pollutant. Nuclear reactors routinely release toxic radiation into our air and water, and continue to generate lethal radioactive waste for which the U.S. has no disposal plan. The EPA’s goal should be to reduce carbon emissions using the cleanest and safest means possible. Support for dangerous, dirty and uneconomic nuclear reactors fails that test.”

Michael Mariotte

June 2, 2014

Permalink: https://www.nirs.org/2014/06/02/epas-proposed-carbon-rules/

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