By John Stewart
Director, Policy and Research
Canadian Nuclear Association
Liberalized North American energy markets and a shale gas boom have made the financing of new nuclear plants extremely difficult, according to experts and U.S. industry executives.
Leading U.S. nuclear CEOs told the Nuclear Energy Assembly in Scottsdale, Arizona, on May 20, current market conditions are also now causing the premature closure of existing nuclear power plants, accelerating a loss of baseload power and a loss of fuel diversity. Canadian Nuclear Association (CNA) President John Barrett and CNA policy director John Stewart were in attendance at the conference.
The closure of the Kewaunee Power Station in Wisconsin last year stunned the industry. Market forces, not reactor age or safety, was cited as the cause.
William Mohl, an executive with Entergy Corporation, predicted that more nuclear plants will close without reform to the electricity market structure.
U.S. electricity prices are chronically too low, partly due to a politically-driven push for renewable energy combined with cheap natural gas and the short-term focus of liberalized electric power markets.
NEA participating experts said U.S. decision-makers, both public and private, will be slow to recognize the threat from loss of energy diversity, just as they were slow to recognize the implications of the shale revolution in oil and gas.
Lawrence Makovich, vice president at IHS CERA, said the reliability of the diverse generation mix is being taken for granted in the energy policy debate and many policymakers do not understand the problems associated with the intermittency of renewables.
“When people get this notion that solar is a substitute for conventional generation, you can see a country like Germany, with the solar intensity of Anchorage, Alaska, closing nuclear plants and replacing them with solar (facilities),” he told the conference.
Gerald Anderson, CEO with DTE Energy, also said there was a problem with the structure of markets. High capital intensity and price volatility have to led to distress and instability in the electric sector. He also said there is trouble attracting capital to invest in new build.