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Nuclear industry calls for state policy focus as resource outstrips coal generation in US

Dive Brief:

  • While the Biden administration has indicated support for nuclear energy and advanced reactors, state policies valuing the resource continue to be necessary to keep existing plants on the grid, the Nuclear Energy Institute (NEI) said in its annual State of Nuclear Energy address on Tuesday.
  • The nuclear industry group applauded the introduction of the CLEAN Future Act and other federal legislative measures that aim to support nuclear buildout, while emphasizing the need for states like Illinois to maintain an economic pathway for existing nuclear infrastructure. “We need complementary policies, to make sure the plants that we have stay online,” Maria Korsnick, NEI CEO, said during the program, referencing the American Nuclear Infrastructure Act of 2020 that was advanced by the Senate Environment and Public Works Committee in December.
  • Korsnick touted relicensing existing nuclear plants as the most economic way to have clean energy on the grid. The Nuclear Regulatory Commission (NRC) approved four units for relicensing in 2020, and will be reviewing six units for relicensing this year.

Dive Insight:

NEI’s presentation came as federal regulators kicked off a technical conference to evaluate wholesale market competition in states that have clean energy subsidies intended to subsidize nuclear and other zero-emission resources.

States that offer zero emission credits to guide their resource mix toward higher concentrations of clean energy have found those efforts counter-acted in wholesale markets by mechanisms like the minimum offer price rule (MOPR).

According to NEI, four Exelon nuclear reactors are under threat of closure this year in Illinois, alone — which has been central to the MOPR discussions within the PJM Interconnection. The utility has told regulators and state officials that some of its plants cannot compete under MOPR conditions. Officials from Gov. J.B. Pritzker’s office said last year that Exelon is threatening the state in order to secure more funding for its plants.

“If they shut down, carbon emitting sources will likely fill the gap,” Korsnick said.

The discussions happening on the state level continue to be top of mind for the nuclear sector, according to NEI.

Clean energy debates in states like Illinois and Minnesota had been “sidelined by COVID,” but are picking up again, according to Korsnick. Amid the momentum for federal clean energy legislation, the Illinois government is “very focused” on the issue during their spring session.

“Our climate plans can’t work if we go backwards by shuttering nuclear plants,” Korsnick said.

Korsnick said relicensing plants that utilities are already investing in to keep them in good condition is a cheap way to ensure clean energy capacity. The six plants currently under NRC review for relicensing are NextEra’s Point Beach Units 1 and 2, Dominion’s North Anna Units 1 and 2 and Surry Units 1 and 2.

NEI also acknowledged the difficulties that COVID-19 pandemic conditions had on the nuclear industry in the past year, particularly with regard to the only nuclear plant under construction in the country: Southern Company’s Vogtle Units 3 and 4.

Southern said it anticipates a delay of at least a month regarding Unit 3’s November 2021 in-service date.

Others in the nuclear power sector have similarly offered support for the plant in regard to the delay.

“Let’s be real. We can afford a month’s delay at Vogtle in constructing reliable, zero carbon nuclear power that will help America decarbonize, mitigate climate change, secure the power grid, and deliver high-paying jobs in Georgia that will last decades,” Craig Piercy, CEO and executive director of the American Nuclear Society, said in an e-mail.

Pushing for advanced nuclear

In 2020, nuclear generation surpassed coal for the first time ever in the United States, but the coal generation retired that last year was mostly replaced with natural gas, Korsnick said in her remarks.

However, new nuclear capacity, such as advanced reactors, could make more sense in the future for replacing fossil fuel generation, she said.

The opportunity of a nuclear reactor to generate hydrogen and a high temperature steam supply, alongside its baseload power generation attributes, makes nuclear plants “a pretty attractive asset,” she said, particularly as small modular reactors can be about the size of the coal plants that are being retired.

Korsnick focused her remarks on the opportunities of advanced nuclear reactors, as well as the progress that various designs have already had with NRC permitting. She acknowledged a lot more work is needed to make advanced reactors cost-competitive.

“We’re setting a condition that by the time we get to the mid-2030’s … [small modular reactors] are going to be cost-competitive,” Jeff Lyash, president and CEO of the Tennessee Valley Authority, said during a panel on Wednesday for the U.S. Nuclear Industry Council’s Advanced Reactor Summit.

However, a lot of the support for advanced reactors must also come through steady funding from the federal level as developers continue working with the NRC, James Schaefer, senior managing director at Guggenheim Partners, said at the Advanced Reactor Summit.

“To the extent that the DOE loan program took on more risk and had more funds, that would help a lot … Grant money can’t have ‘year in, year out’ stuff,” Schaefer said.

During the first hearing of the House’s Democrat-led CLEAN Future Act earlier in March, several members of Congress asked about a more specific role for advanced nuclear energy. The CLEAN Future Act would create a national standard of 100% clean energy by 2035, with an interim goal of 80% by 2030.

Several members of Congress asked for specific ways to boost advanced nuclear reactors through legislation based on the attributes of the technology.

“Advanced small modular reactors under development are capable of being safely placed next to existing industrial infrastructure,” Rep. Bill Johnson, R-Ohio, said during the hearing on the CLEAN Future Act.

Source: Utility Dive