Nuclear powerShale gas threatens U.S. nuclear power industry
The U.S. nuclear industry is facing a new enemy, and it is not anti-nuclear peacenicks. It is the shale gas boom, which on Tuesday claimed yet another victim when Entergy Corporation said it would close its Vermont Yankee reactor ahead of schedule. It is the fourth U.S nuclear plant to be closed this year, as utilities have concluded that investing in refurbishing older reactors is no longer economically viable.
The U.S. nuclear industry is facing a new enemy, and it is not anti-nuclear peacenicks. It is the shale gas boom, which on Tuesday claimed yet another victim when Entergy Corporation said it would close its Vermont Yankee reactor ahead of schedule.
Leo Denault, chairman and chief executive of Entergy, tod the Financial Times that the closure was “an agonising decision,” but said energy market conditions, including low gas and electricity prices resulting from the shale boom, meant it was the right move to take.
The comoany said Yankee would have likely broken even in 2013, but would have fallen into loss in subsequent years.
The FT notes that t is the fourth U.S nuclear plant to be closed this year, as utilities have concluded that investing in refurbishing older reactors is no longer economically viable.
The Nuclear Energy Institute (NEI), an industry group, said the Yankee decision was “jarring evidence that market reform is essential to ensure [the U.S.] maintains a diversified portfolio of electricity options.”
Vermont Yankee is more to 40-year old – it was began operations in 1972 — but had a license from the Nuclear Regulatory Commission (NRC) to remain in service until 2032.
Entergy’s decision follows Duke Energy’s decision to retire Crystal River plant in Florida, Dominion’s closure of the Kewaunee plant in Wisconsin, and Edison International’s closure of both units at the San Onofre plant in California.
The closing of the four plants account for about 4 per cent of U.S. nuclear capacity.
Entergy bought six nuclear plants between 1999 and 2007, shortly before the shale gas boom became apparent. After Vermont Yankee is closed, the company will continue to operate eleven other reactors on nine sites.
In its statement announcing the closure, the company criticized what it called “flaws” in the design of the New England power market, saying it resulted in “artificially low energy and capacity prices” and did not provide “adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide.”
Marvin Fertel, president of NEI, agrees, telling the FT that failure to reform power markets to support nuclear power would “jeopardize reliable electricity supplies and leave consumers vulnerable to steep or long-term electricity price swings.”
