Illinois rallies as nuclear plants fail in capacity auction

26 May 2016

Exelon's Quad Cities and Three Mile Island nuclear power plants failed to clear in the PJM regional capacity auction for the 2019-2020 planning year, meaning those units will not be able to receive capacity revenue for that period. Meanwhile, over 1500 people rallied in Illinois to support the passage of legislation that would protect nuclear plants from early closure.  

Supporters rally to urge lawmakers to adopt the NGEP (Image: Nuclear Powers IL)  

A portion of the capacity of the Byron nuclear power plant also failed to clear the auction, although the unit is committed to operate until May 2020. Exelon's other PJM nuclear plants cleared the auction with the exception of Oyster Creek, which is scheduled to retire in 2019 and therefore did not take part. It is the second consecutive year that Three Mile Island unit 1 has failed to clear in the PJM auction.

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. Its annual capacity auction ensures enough power generation resources are available to meet predicted future energy demand in its region. Generators that clear the auction receive capacity revenue for reliably delivering power for electricity customers when needed, especially during power system emergencies.

PJM procured 167,306 MWe in the auction, ensuring capacity for the delivery year from 1 June 2019 to 31 May 2020, at a clearing price of $100 per megawatt-day for the majority of the region. PJM senior vice president for markets Stu Bresler said, "The load forecast is lower, and there was a large amount of new gas-fired combined-cycle generation clearing for the first time in the auction."

US nuclear plants operating in deregulated markets face economic challenges from the short-term nature of the competitive market, coupled with competition from low-cost gas and federally subsidized wind power. This has led to calls for market reforms to recognize the full value of nuclear - and other generation options - including their contribution to price stability, greenhouse gas reduction initiatives and local economies.

Earlier this month, Exelon said it will move forward with the early retirements of Clinton - which operates in the Midcontinent Independent System Operator (MISO) RTO - and Quad Cities if the state of Illinois fails to pass the Next Generation Energy Plan (NGEP), which would support their continued operation. The two plants have made combined losses of $800 million over the past seven years despite being two of the company's highest-performing plants. Although Clinton cleared MISO's recent capacity auction, Exelon said that the unit will not receive enough revenue to avoid continued losses.

"The capacity market alone can't preserve zero-carbon emitting nuclear plants that are facing the lowest wholesale energy prices in 15 years," said Chris Crane, president and CEO of Exelon. "Without passage of comprehensive energy legislation that recognizes nuclear energy for its economic, reliability and environmental benefits to Illinois, we will be forced to close Quad Cities and Clinton, resulting in the loss of jobs and economic activity, higher energy prices for consumers, and a dramatic increase in carbon emissions that will make it harder and more expensive for Illinois to meet its clean energy goals."

Support for NGEP

Meanwhile, over 1500 people attended a rally at the Illinois state capital in Springfield to voice their support for the NGEP. The bill, which is currently before the state legislature, includes implementation of a zero emission standard that would specifically target at-risk nuclear plants.

"We need to do all we can to preserve our plants," Illinois senator Donne Trotter told the rally. "Passing the Next Generation Energy Plan before the end of session is critical for Illinois' clean energy future, the state's economy and thousands of Illinois families," he said.

If passed, the NGEP would make Illinois one of the first states to recognize the zero-carbon benefits of nuclear energy. It would also nearly double energy efficiency programs and boost the development of solar power in the state, growing it from less than 60 MWe to more than 1650 MWe by 2030.

Researched and written
by World Nuclear News