President calls for action to preserve US nuclear plants

04 June 2018

US President Donald Trump has directed Secretary of Energy Rick Perry to take immediate action to stop the loss of "fuel-secure power facilities" from the country's power grid, including nuclear power plants that are facing premature retirement.

Three Mile Island - 460 (NRC)
Exelon's Three Mile Island, which Exelon last year said could face premature closure(Image: US NRC/Exelon)

"The United States of America has the most technologically advanced and developed infrastructure in the world, with access to a reliable, dependable, and diversified electric grid," a statement issued on 1 June by the White House said, adding that the president "believes in total energy independence and dominance" and the importance of a "strong and secure" energy grid and infrastructure to protect US national security, public safety, and economy.

"Unfortunately, impending retirements of fuel-secure power facilities are leading to a rapid depletion of a critical part of our Nation's energy mix, and impacting the resilience of our power grid," the statement said. "President Trump has directed Secretary of Energy Rick Perry to prepare immediate steps to stop the loss of these resources, and looks forward to receiving his recommendations." Fuel-secure facilities include nuclear and coal-fired plants, which are able to store fuel securely on site, enabling them to continue operating in times of major disruption whether from "adversarial attack" or natural disaster.

Bloomberg reported that the Department of Energy (DOE) had outlined in a memo a strategy to establish a strategic generation reserve and to compel grid operators to buy electricity from at-risk plants. The 40-page draft memo, which is marked as privileged and confidential, is dated 29 May and was circulated ahead of a US National Security Council meeting scheduled for 1 June.

The plan would see DOE use authority under two existing laws - the Federal Power Act and the 1950 Defense Production Act - temporarily to delay retirements of fuel-secure electric generation resources, while it analyses and takes action to address the "resilience needs" of the electric generation system. This would involve directing system operators over a two-year period to purchase electricity or generation capacity from a designated list of facilities, to forestall any further retirements. The proposed order would also establish a Strategic Electric Generation Reserve.

"This prudent stop-gap measure will allow the Department further to address the Nation's grid security challenges while the Order remains in force," the memo notes.

The US Federal Energy Regulatory Commission (FERC) earlier this year launched its own proceeding to examine the resilience of the US grid after terminating proceedings on a proposed rulemaking on grid resilience and reliability submitted by Perry in September 2017. Perry's proposed rule would have recognised the attributes of generation sources able to store fuel on site, such as nuclear. FERC instead directed the bodies that operate the USA's power grid - the ISOs (independent systems operators) and RTOs (regional transmission organisations) - to assess the resilience of the electricity grid and to recommend additional actions to mitigate any identified issues.

Nuclear plant operators in the USA's deregulated markets, where generators compete against each other to sell power to suppliers through auctions, have faced competition from low-cost gas, particularly from shale gas developments, and subsidised wind power, leaving well-performing nuclear units at risk of closure for economic reasons. Some states have now passed legislation specifically recognising the attributes of nuclear plants, particularly for their contribution to emissions reduction targets.

In response to potential market intervention, regional transmission organisation PJM Interconnection on 1 June said any federal intervention to order customers to buy electricity from specific power plants would be damaging to the markets and costly to consumers. "There is no need for any such drastic action," PJM said. The RTO reiterated its assertion that planned deactivations of four nuclear power plants - FirstEnergy Solutions' Beaver Valley, Davis-Besse and Perry units in Ohio and Pennsylvania - did not threaten the reliability of its grid. PJM is the wholesale electricity market serving all or part of 13 states including New Jersey, plus the District of Columbia, and is the country's largest grid operator.

World Nuclear Association Director General Agneta Rising said today: "Action should be taken to help the plants under immediate threat of closure. But in the longer term, failures in the market need to be corrected to recognise and value the benefits of clean and reliable electricity generation from nuclear plants."

Auction failure

The White House issued its statement days after more than 10,000 megawatts of nuclear generating capacity failed to clear PJM's annual capacity auction. The auction, which procured power supply resources for electricity demand needs over the period 1 June 2021 to 31 May 2022, produced a price of USD140 per megawatt-day, compared to USD76 for the previous year. PJM procured 163,627 megawatts of resources, with 19,900 MWe of nuclear generation clearing the auction, about 7400 MWe less than in 2017.

The failure of the Three Mile Island and Dresden nuclear plants, and all but a small portion of the Byron nuclear plant, to clear the auction prompted Exelon Nuclear to call for urgent federal action to preserve the benefits of the plants' resiliency and emissions-free generation. "PJM has acknowledged the long-standing market flaws that put nuclear energy at risk, and the time to implement solutions is running out," Kathleen Barrón, Exelon’s senior vice president of government and regulatory affairs and public policy, said on 24 May.

The Quad Cities plant cleared the capacity auction as a result of Illinois legislation that fairly compensates certain nuclear plants for their environmental attributes, Exelon said.

Maria Korsnick, president and CEO of the US Nuclear Energy Institute, said nuclear plants in the PJM market are more at risk of premature closure now than ever before and called for immediate action on market reform. "Distorted market forces jeopardise clean, fuel-secure sources of electricity. If these plants are forced to close because markets are not being reformed to value the attributes that nuclear provides to the grid, we will face an energy supply that is less diverse, less clean and overly reliant on natural gas," she said.

Researched and written
by World Nuclear News