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New EPA rule = more nuclear?

6/10/2014

5 Comments

 
By Lenka Kollar

There's been a lot of debate on the new Clean Power Plan proposed by the EPA last week. The plan outlines carbon reduction goals for each state that would cut carbon pollution by 30% by 2030, as compared to 2005 levels. Each state will come up with a plan to cut carbon emissions using the following mix of steps:
1. Improving efficiency at existing coal-fired power plants
2. Increasing utilization of existing natural gas fired power plants
3. Expanding the use of wind, solar, or other low- or zero-carbon emitting alternatives
4. Increasing energy efficiency in homes and businesses.
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The bad news is that the coal industry is going to take a hit (see map of affected power plants above) and this may cause a rise in electricity costs. The good news is that the EPA is recognizing more than just the popular renewables, wind and solar, as "alternative" low-carbon generation. The word "nuclear" is mentioned 76 times in the proposed rule, mostly when talking about the current energy sector, but also as a solution to cutting carbon emissions. These statements about how states should meet carbon reduction goals are getting us really excited:
...including the projected amounts of generation achievable by completing all nuclear units currently under construction, avoiding retirement of about six percent of existing nuclear capacity…

Policies that encourage development of renewable energy capacity and discourage premature retirement of nuclear capacity could be useful elements of CO2 reduction strategies and are consistent with current industry behavior.

As the Atomic Power Review says, we've seen a complete change in the prospect of nuclear energy in the United States with this proposed rule. Utilities have been threatening to close nuclear plants because of economics (low energy prices caused by low natural gas prices and subsidies for solar and wind) but the EPA is now encouraging sates to keep nuclear power plants open and even build new ones.

This is great and all, but what will the policies to discourage premature retirement and encourage new construction of nuclear power plants look like? Does this mean subsidies for nuclear energy or maybe a reduction in the red tape associated with regulation? We have the technology to build new nuclear power plants and to keep existing plants running, but how do we address the economic and political issues?

By the way, as with any government rule-making, you can voice your thoughts at a public hearing or comment on the proposal online.
5 Comments
Tim Finney
6/11/2014 01:41:52 am

Addressing the economic and political issues surrounding clean energy seems to focus around the opportunity cost of alternatives to building new nuclear power plants. The idea of creating energy cheaper than coal now seems to be shifting toward creating energy more affordable than natural gas. The microeconomic picture requires a bit of creativity to see the true potential of building new nuclear reactors. Getting a license for 40 years with the possible extension for another 20 makes the long term estimates and projections very important for both new and existing nuclear facilities. If it takes 30 years to recover the initial fixed capital costs invested, then the last 30 years of useful life provides a fair net profit. The true value of providing carbon free affordable energy lasts throughout the lifetime of the project. Lowering the variable costs of operating a plant by exploring alternative fuels to uranium such as thorium also provides great value. Focusing on smaller reactors that can provide about 100 MW of power makes building more new nuclear power plants more attractive. Looking at the issue from a macroeconomic perspective presents some unique challenges. In order for smaller reactors to have a significant impact on the energy grid, thousands would have to be built. Building thousands of small reactors that average a few hundred million dollars apiece ends up being a multi-trillion dollar development. Taking on a project of that scale requires excellent communication and a shared vision among private citizens as well as government officials. The new EPA clean power plan allows states the opportunity to create individual plans or combine plans with multiple states to find ways to incorporate clean energy such as nuclear into their future. Since these plans using the 4 building block approach do not need to be submitted by government officials for another two years on June 30, 2016, with the possibility of having an extension for another year for individual state plans and an additional two years for multi-state plans, showing the environmental and economic value in building block 3 is more about communication than time.

Reply
Lenka Kollar link
6/11/2014 02:48:27 am

Great insight, Tim. The Department of Energy is now a big proponent of small reactors and they should work with states to help develop their plans per the EPA rule.

Reply
Mark
6/23/2014 03:57:01 am

3. Expanding the use of wind, solar, or other low- or zero-carbon emitting alternatives ......

...funny how they never use the "n-word", though! :-(

Reply
Lenka Kollar link
6/24/2014 04:57:29 am

Right?! But like I said in the article, the "n-word" was used over 70 times in the whole document.

Reply
Mark
6/24/2014 06:02:17 am

Ooops. You're right. I was skimming and missed the OBVIOUS!




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