Despite years of unfavorable conditions, Exelon thinks next year may be different.
The company announced earlier this year it won’t close the Clinton Nuclear Power Plant, 45 miles east of Springfield, for at least another year in light of potential market reforms in Illinois. The announcement follows similar announcements for two of Exelon’s other Illinois nuclear plants. Meanwhile anti-nuclear groups are calling for the plants to begin shutting down now.
The landscape of the energy market is undergoing major changes as coal plants begin to close, thanks in large part to tightening environmental regulations and a glut of cheap natural gas. Because coal has long been one of the main fuels for electricity production in the U.S., its decline creates a vacuum for other sources of electricity to fill. While environmental groups prefer more solar, wind and hydro electricity, companies which operate nuclear power plants see an opportunity for a larger role.
In Illinois, however, nuclear power has faced a competitive disadvantage since the late 1990s due to the state’s “deregulated” energy market. Illinois law requires a separation between companies that generate electricity and those which transmit electricity to customers. (Springfield’s City Water, Light and Power is allowed to own both generation and transmission assets because it’s a municipal utility.)
Illinois’ market structure allows customers to choose where their electricity comes from, even if they can’t change which company transmits it. Because most customers choose their electricity source based on price, relatively expensive nuclear power tends to lose when compared with cheaper coal and natural gas.
Even though nuclear power accounts for half of all electricity generated in Illinois, the market situation has led Exelon, which owns six nuclear power plants in Illinois, to consider closing some of its plants. The plants at Clinton, Byron and the Quad Cities were all on the chopping block this year, but Exelon decided to hold off closing the plants for a year in anticipation of potential changes to Illinois’ power market.
The Midcontinent Independent System Operator (MISO), which operates the power grid covering most of Illinois outside of Chicagoland, released an “issues statement” in October announcing a reexamination of how it procures and allocates energy resources. Although the details are complex, the bottom line is that nuclear power in Illinois could see more demand as MISO reworks its system.
Paul Adams, an Exelon spokesman, told Illinois Times that the plant at Clinton still faces a decision on early retirement as early as next year. Clinton has sustained losses of $350 million over the past six years, he said, and energy prices remain low.
David Kraft, executive director of the Nuclear Energy Information System, an anti-nuclear advocacy group, says Exelon should begin the costly and lengthy process of closing its aging nuclear fleet now instead of holding on another year. Kraft acknowledges that Exelon’s plants have lost money, but he says that’s partly due to the high cost of maintaining a nuclear plant that is nearing the end of its design life. He says Exelon’s “threats” to close plants were aimed at convincing the Illinois General Assembly to create an artificial demand for nuclear energy.
That legislation, called the Low Carbon Portfolio Standard, would give preference to nuclear power in the energy market based on the fact that nuclear power doesn’t emit carbon dioxide. Two bills to create the standard failed in the current legislative session, partly because Kraft’s group and others urged the General Assembly to make small fixes to account for market changes.
“The legislature did the right thing by doing nothing and waiting for the market to adjust,” Kraft said. “It did.”
Adams says the standard is crucial to helping Illinois meet its required reduction in carbon dioxide emissions. Closing the Clinton and Quad Cities plants would increase Illinois’ CO2 emissions by about 24 million tons, Adams said, “making it twice as difficult and twice as costly to comply.”
Meanwhile, Kraft says the energy market is entering the “age of decommissioning” as nuclear plants reach the end of their design lives.
“The world trend is really away from nuclear,” he said. “It’s only a matter of time.”
Contact Patrick Yeagle at email@example.com.