The Vermont Yankee nuclear power plant will cease electricity production by the end of next year and will then be decommissioned, Entergy has announced. The company said that continued operation of the plant was "not financially viable."
|Vermont Yankee will shut down after 42 years of operation (Image: Entergy)
Entergy anticipates shutting down the Vermont Yankee plant - a single 600 MWe boiling water reactor (BWR) that began operating in November 1972 - in the fourth quarter of 2014, but said the exact date has still to be determined. The plant provides almost three-quarters of Vermont's electricity.
The company attributed its decision to shut the plant on a number of factors, including the high cost of operating a single-unit plant. Entergy, which has invested over $400 million in Vermont Yankee since 2002, noted that "the financial impact of cumulative regulation is especially challenging to a small plant in these market conditions."
In addition, sustained low natural gas prices have impacted the plant's profitability, while "wholesale market design flaws continue to result in artificially low energy and capacity prices in the region, and do not provide adequate compensation to merchant nuclear plants for the fuel diversity benefits they provide."
Legal battle over licence
Vermont Yankee's original operating licence was due to expire on 21 March 2012, but in January 2006 Entergy submitted an application to the NRC to extend the licence by 20 years to March 2032. The NRC said in March 2011 that it would renew the plant's operating licence for a further 20 years.
However, Vermont is the only US state that claims entitlement to have a say in the relicensing of its nuclear power plants. In January 2010, the state voted by 26 votes to 4 against extending the licence of Vermont Yankee.
Entergy subsequently launched a legal case against Vermont, challenging the state's self-determined right to make rules about the perceived safety and economic performance of the plant. A district court ruled in the company's favour in January 2012, clearing the way for its extended operation.
Entergy said that estimated operational earnings from Vermont Yankee were "expected to be around breakeven in 2013 and generally declining over the next few years." By closing the plant, the company expects cash flow to increase by some $150 to $200 million in total up to 2017. Entergy said that it will take a charge of about $181 million in the third quarter of 2013 related to its decision to close the plant.
Announcing the plant's closure now "allows time to duly and properly plan for a safe and orderly shutdown," according to Entergy. Once Vermont Yankee ceases power production, the reactor will be defueled and placed in SAFSTOR, where the plant is maintained and monitored. Decontamination and dismantling work occurs later.
Assuming that Vermont Yankee shuts at the end of 2014, $566 million would be needed for its decommissioning, Entergy said. It noted that some $582 million had already been put aside for this, excluding the $40 million guarantee by Entergy to satisfy Nuclear Regulatory Commission (NRC) requirements following the 2009 review of decommissioning funding levels.
Some 630 people currently work at Vermont Yankee, which Entergy acquired from Vermont Yankee Nuclear Power Corporation in 2002. Entergy said, "Staffing levels will change and be reduced as the plant moves through the various stages of decommissioning."
Entergy chairman and CEO Leo Denault said, "This was an agonizing and an extremely tough call for us." He added, "Closing the plant on this schedule was certainly not the option we hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances."
Denault noted, "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 as part of a balanced energy portfolio."
Besides Vermont Yankee, Entergy operates eleven other nuclear power reactors with a combined generating capacity of almost 9400 MWe. The company said it currently has no plans to close any of its other reactors.
Commenting on the closure, Washington-based Nuclear Energy Institute (NEI) president and CEO Marvin Fertel said, "This is more proof that competitive markets must be designed appropriately to ensure reliable long-term electric capacity and to provide fair capacity payments to companies producing electricity in those markets."
Researched and written
by World Nuclear News