With its decision today to ditch its Vermont Yankee nuclear power plant, Entergy Corp. will now join a growing list of utility companies that have made similar moves. Entergy is citing low natural gas prices as a key factor. 38 nuclear reactors in 23 states are also at risk of early retirements and shutdown.
The Vermont Yankee nuclear reactor will shut late next year and be decommissioned, its owner announced Tuesday, citing low prices for natural gas and high operating costs.
The New Orleans-based utility is fourth in line. It has been preceded by Duke Energy, Dominion Resources and Southern California Edison. Duke and Edison closed their Florida and Southern California facilities, respectively, because of maintenance issues while Dominion shut down its Wisconsin unit because it could not compete with natural gas in today’s market.
Meanwhile, Duke also said it would not build two nuclear reactors north of Tampa, Florida, saying that the rising construction costs and delayed completion dates stand in the way. The plant was going to cost $24 billion while it was not scheduled to begin operations until 2024.
As far Entergy’s decision to close Vermont Yankee in Vernon, Vt., it said that the impact of the shale gas revolution has resulted in sustained low natural gas prices and wholesale energy prices. It also said that the cost structure of this single plant has been to high, saying that it has invested more than $400 million into the facility since 2002.
Finally, it said that the wholesale market design flaws continue to result in artificially low energy and capacity prices in that region. That is, nuclear power plants are not adequately compensated for the power that they sell. The plant will therefore officially close in 2014. In the meantime, Entergy says that it will be working with the Nuclear Regulatory Commission to decommission the facility in a process that will take decades.
“We are committed to the safe and reliable operation of Vermont Yankee until shutdown, followed by a safe, orderly and environmentally responsible decommissioning process,” says Leo Denault, chief executive of Entergy. “Entergy remains committed to nuclear as an important long-term component of its generating portfolio. Nuclear energy is safe, reliable, carbon-free and contributes to supply diversity and energy security ….”
“Our nation’s energy security, economy and environment all suffer when energy markets fail to value the attributes intrinsic to nuclear energy—namely clean energy with virtually no air emissions, continuous baseload generation that enhances electric grid reliability … adds Marvin Fertel, chief executive of the Nuclear Energy Institute.
Rash of Setbacks
Beside the current closures and uprate cancelations, of which there are nine, 38 reactors in 23 states are also at risk of early retirements, with 12 of those facing the greatest risk of being shutdown, says Mark Cooper, senior fellow at the Institute for Energy and the Environment at Vermont Law School. Uprates are the increasing of a plant’s current output — a phenomenon that has been put on hold because of current cheap natural gas prices.