Is shale gas killing nuclear power?3/13/2013
It should be continuing to generate electricity steadily for another 20 years, but early in May the Kewaunee nuclear power station on the Western, Wisconsin shore of Lake Michigan will close down for good, with the loss of some 650 jobs. The reason will not be wear and tear or the safety issues that often afflict reactors or, for that matter, predictable environmentalist opposition. Instead, its nemesis is something new and unexpected – shale gas.
Dominion Resources, which bought the 39-year-old plant back in 2005, has been investing heavily to upgrade it, with the result that its operating licence has been extended for 20 years, allowing it to continue in production until 2033. But all for nothing; the tumbling price of natural gas, brought about by fracking, has meant that the company cannot make it pay its way.
“It's a fantastic plant,” the CEO, Thomas F Farrell, told The Washington Post. “Unfortunately the economics just don't work.” The cheapness of gas, and its impact on electricity prices, meant the reactor just could not compete.
The story is much the same right across the country, in Florida's self-styled “home of the manatee”, Crystal River on the Gulf coast. Again the local nuclear power plant has a licence to operate well into the future, but again it is due to close for good. It has been offline since 2009, in need of repair, and last month its owner – Duke Energy – decided that it would be more economic to build gas-fired power capacity to take its place.
Analysts suspect that this may be the beginning of a trend. Another four existing reactors are thought to be threatened with premature retirement thanks to the “new power market economics” brought about by the shale gas boom. Plans for two nuclear units in Texas have been scrapped because gas (and wind) proved cheaper. And Exelon Generation has put off two projects to increase it's nuclear capacity because of the price of gas.
All this suggests that nuclear power will suffer much more from the shale gas boom than renewable energy. And it greatly complicates the much-heralded environmental benefits of the increasing use of the fossil fuel. As long as the gas replaced coal, its supporters could claim a clear benefit for the climate, since it emits only about half as much carbon dioxide, the main cause of global warming. But if it is also knocking out the atom, which produces none of the greenhouse gas in operation, this effect is much reduced.
Nor is this the only problem plaguing nuclear power in the United States, which – just a few years ago -was expecting imminent “renaissance”. Several reactors are dogged with safety issues: three of these have now been closed for over a year. Worse, on Monday the official Nuclear Regulatory Commission refused permission to a company owned by French nationalised company EDF to build a new reactor in Maryland that was intended to be the precursor of six nuclear power stations. The reason? US law bars foreign companies from having “ownership, control or domination” of US nuclear plants and in October 2010 a US firm, Constellation Energy dropped its 51 per cent stake in the company – rather as Centrica has pulled out of a partnership with EDF to build reactors in Britain – and has not been replaced.
This is serious stuff. All in all, the amount of electricity generated from the atom has dropped by three percent since 2010. To make up that loss of carbon-free power, it has been calculated, the US would have to quadruple its present solar installations. And the decline is expected to be even greater as shale gas increasingly takes its place in the sun.