What nuclear plant closings could mean for the area

By Drs. Robert & Sonia Vogl
President and Vice President, Illinois Renewable Energy Association

Three nuclear plants owned by Exelon Corporation, including the Byron and Quad Cities plants in Illinois and one in New Jersey, may close after failing to secure contracts in the annual auction to provide power to the electric grid.

The plants are in financial difficulty because of lower-cost electricity from wind and natural gas generators.

If the plants were to close, jobs and tax revenues in the surrounding areas would be lost.

In response to the threat of closure, Illinois Speaker of the House Michael Madigan (D) introduced legislation to the House urging the U.S. Environmental Protection Agency (EPA), the Federal Energy Regulatory Commission and electric grid operators to enact a rule that would allow nuclear power plants to be included in federal efforts to cut greenhouse gas emissions, as they do not emit the gases.

Madigan’s request also asks the Illinois EPA and Department of Commerce and Economic Opportunity to prepare reports addressing both the societal costs of increased greenhouse gas emissions and job losses that would come from closing the plants.

As pointed out in an article by Julie Wernau in the Chicago Tribune, some investors do not believe the plants will be closed. She cites Travis Miller, director of utilities research for Morningstar, as pointing out that the plants could actually end up making more money by “agreeing to be available to the grid,” as capacity payments will double per megawatt-day in 2017 and 2018. The power market extends beyond Illinois and includes states to the east.

While electricity from wind and natural gas is providing lower-cost electricity than nuclear power, rooftop solar power, including residential installations, is another challenge to utilities. According to an article by Rob Wile in Business Insider, Barclays has downgraded its rating of the electric sector because of the challenge of residential solar power.

For the past decade, governments around the world have subsidized renewable energy. The global output of PV modules experienced a 30-fold increase and reached 30,000 MW by 2013. Module prices fell accordingly.

The existence of net metering has allowed the owners of solar installations to sell excess power to the grid and rely on the grid to provide backup power when the sun is not available, solving the intermittency problem.

An owner of a 15kW solar array estimated he should be able to meet all the energy needs of his energy efficient home by producing and selling excess electricity in summer, then buying it back in winter to heat his house.

Another available storage solution is declining in cost. According to Wile, the cost of battery storage for a residential system in 2009 was $17,000, but with the increase in electric vehicles, the same battery storage capacity cost has fallen to $3,700.

The power stored in an electric vehicle’s batteries could power an average home for up to three days. Barclay’s estimates that within eight years, battery storage will reach grid parity in Illinois.

They also expect that while utilities and regulators will continue to put up roadblocks to the solar revolution, the rising cost of the electric grid and thermally generated power will continue to be challenged by the falling cost of solar electricity and electrical storage.

Drs. Robert and Sonia Vogl are founders and officers of the Illinois Renewable Energy Association (IREA) and coordinate the annual Renewable Energy and Sustainable Lifestyle Fair. E-mail sonia@essex1.com.

From the June 4-10, 2014, issue

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