Wednesday, Jun 20, 2018
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Natural gas boom takes toll on nuke power plants

Fracking shapes DTE’s plans for Monroe area


The huge towers and reactor of the Fermi II Nuclear Energy Plant in Newport, Mich., loom over the landscape.


Japan’s Fukushima disaster notwithstanding, America’s support for nuclear power remains strong — at least in concept.

But that is not enough to relieve anxiety building within the nuclear industry itself, which now questions the nation’s commitment in terms of its pocketbook.

Four nuclear reactors — Crystal River in Florida, two at the San Onofre complex in southern California, and the Kewaunee plant in Wisconsin — have closed this year. A fifth, Vermont Yankee, has announced plans to close at the end of 2014.

The latter two are the most troubling to the Nuclear Energy Institute. While Crystal River and the two San Onofre reactors were closed because of management and equipment issues, the decisions affecting Kewaunee and Vermont Yankee are seen by the industry as purely economic.

“From our viewpoint, there was and is nothing wrong with [those two] plants,” Richard Myers, the NEI’s vice president for policy development, planning, and supplier programs, told reporters during a September briefing.

Mr. Myers said the decisions to close Kewaunee and Vermont Yankee are symptoms of how market conditions are rapidly changing as the nation gears up for a fracking frenzy that is expected to last the next 20 to 30 years, untapping vast sums of natural gas as well as a lot of oil that was previously considered inaccessible.

Eastern Ohio is expected to be a big part of that.

In a Sept. 12 speech at the World Nuclear Association annual symposium in London, Mr. Myers said the shutdowns of Kewaunee and Vermont Yankee “raise legitimate questions.”

“Is it the start of a trend?” he asked delegates. “Will other nuclear plants follow?”

Forty percent of the megawatts retired in recent years have been in coal-fired power. But now nuclear executives are wondering if sheer economics of falling natural gas prices — not pro-nuke or anti-nuke rhetoric, not even so much post-Fukushima regulations — will cut deeper into their industry’s market share.

The NEI held extensive briefings on the topic days before it released results of its latest opinion polls that attempt to gauge the nation’s consensus about nuclear power.

That poll, done for the NEI by Bisconti Research Inc. with Quest Global Research, shows 82 percent of Americans believe nuclear energy will play an important role in meeting America’s future electricity needs, with half saying more reactors are needed.

Sixty-nine percent of those polled said they favor the use of nuclear power, while 29 percent oppose it — a split that, according to the NEI, mirrors results from its February survey.

The latest polling was done of 1,000 Americans between Sept. 5 to 15. Bisconti Research claims there is a margin of error of plus or minus three percentage points.

Fermi 3 plans

DTE Energy’s pursuit of a license to build a Fermi 3 nuclear plant north of Monroe is a sign of the changing electricity market too.

Although the utility has stated numerous times since it submitted its license application in 2008 that it was doing so only as a placeholder — to be eligible for $300 million to $400 million in tax credits offered for future nuclear construction by former President George W. Bush’s administration — it is now telling people it has a preference for natural gas or renewables if it is going to build a new power-generation station.

Ron May, DTE’s vice president of major enterprise projects, told a local paper prior to last week’s hearings on the Fermi 3 application that DTE would likely hold onto the license for an indefinite time if the U.S. Nuclear Regulatory Commission approves it, as the NRC has approved other applications that have come before the agency.

If DTE builds anything, it would have to take a hard look at a natural gas plant, Mr. May said.

The cost of a Fermi 3 plant is now more than $10 billion.

The article said DTE is not looking to build another generating plant for at least five years, but is spending upward of another $70 million to obtain a license to build Fermi 3.

In addition to falling natural gas prices, Michigan’s energy demands are lower now because of how the state’s industrial base has eroded.

A DTE spokesman, Guy Cerullo, reinforced Mr. May’s comments during a break of the Fermi 3 hearings.

Mr. Cerullo said the utility also is likely to build more solar, wind, and other renewable energy projects to stay in compliance with a Michigan law that requires an eventual 10 percent commitment to renewables.

“In the long run, it’s a prudent move,” Mr. Cerullo said of the decision to move forward with the Fermi 3 license application.

“We look at every option,” he added. “Obviously, one of the current options is natural gas. If we were to build anything at this point, it would be natural gas.”

Nuclear industry

The Bush administration’s $6 billion package of government incentives to jumpstart the nuclear industry under the Energy Policy Act of 2005 fell far short of expectations, drawing 26 applications instead of several dozen.

Several of those applications have been voluntarily suspended by their utilities, while many others have been held in abeyance by the NRC until the decades-old debate is settled about where to permanently store high-level radioactive waste once it’s been pulled from reactor cores. For now, the waste is stored in each plant’s spent fuel pool or in on-site dry cask storage units. Congress wants a national repository, but one has not been built.

The industry is encouraged by plans proceeding to build five new nuclear reactors in the Southeast, Steve Kerekes, NEI spokesman, said. The Fermi 3 proposal is the only one for a new plant in the Great Lakes region and one of only two in the Midwest, the other being in Missouri.

Other polling done for the NEI in September shows 57 percent of Americans believe the waste dilemma would be better managed by an independent authority accountable to a corporate-style board of directors than the federal government.

America’s changing energy-production landscape also now has the nuclear industry promoting diversity in how those megawatts are produced.

It’s a familiar theme: The concept of a strong energy mix has been pushed by renewable energy lobbyists for years on the grounds that energy diversity helps promote economic stability to national security.

“It’s sort of the motor that keeps everything going or the blood that goes through the economy to keep it working,” Marv Fertel, NEI president and chief executive officer, states in an online video to encourage energy diversity.

Contact Tom Henry at: or 419-724-6079.

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