Exelon may shut down nuclear plants, citing low power prices, as DOE worries reactor closures may threaten climate change goals
Even though nuclear output hit a record level in 2013, Exelon officials said last week that some units in the company’s nuclear fleet remain unprofitable, and that the company may decide to shut these plants down if power prices do not recover.
Exelon CEO Christopher Crane and CFO Jonathan Thayer were among several senior officials present during a conference call with analysts in which the company outlined its Q4 earnings report. Mr. Crane said that bad energy policy, specifically subsidies for renewable energy sources such as wind, and low natural gas prices have caused some nuclear plants to remain unprofitabl e.
Mr. Crane said that “despite our best year ever in generation some of our nuclear units are unprofitable at this point in the current environment due to low prices and bad energy policy” and that without a path for sustainable profit, “we will be obligated to shut units down to avoid the long-term losses.”
Exelon currently operates 17 reactors at ten plants in Illinois, Pennsylvania, and New Jersey. Among those plants potentially on the chopping block are the Clinton nuclear power facility in central Illinois and the Quad Cities nuclear power plant on the Mississippi River, according to the Chicago Tribune.
Low electricity prices and federally subsidized wind power has claimed a number of casualties in the nuclear industry. Last May, Dominion citied cheap natural gas when it closed down its Kewaunee nuclear station in Wisconsin, while Entergy announced in August that it would be decommissioning its Vermont Yankee facility, also citing economic factors. In addition, the World Nuclear Association says at least 13 reactors at ten plants around the country as “at risk” of closure, as of the start of 2014.
At least four new nuclear reactors are under construction at sites in South Carolina and Georgia, however a number of other planned reactor projects, including Progress Energy’s Levy County nuclear project in Florida, have been delayed or outright cancelled due to economic and regulatory concerns.
The recent spate of closures, and the additional closures to come, is causing worries amongst U.S. government officials that the country’s carbon reduction goals might not get reached. Nuclear is currently the country’s biggest source of carbon-free generation, and is being touted by both the U.S. government and climate change activists as a necessary component to combat global warming.
"This is a trend we are clearly very, very concerned about," said Peter Lyons, Department of Energy (DOE) assistant secretary for nuclear energy at a nuclear energy conference last week, according to E&E Publishing. “If you look out longer, for retirements that could occur by 2035, you're starting to see a very substantial impact on the nation's [quest] for clean energy.”
President Barack Obama laid out his administration’s Climate Action Plan in June last year, calling for a reduction of carbon emissions by 17 percent below 2005 levels by 2020.
Exelon officials say that they would likely make a decision regarding any plant closures by the end of this year.
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