The nuclear power industry says it’s getting a raw deal under President Obama’s proposal to limit carbon emissions from power plants.
States and energy utilities say the Environmental Protection Agency’s plan would penalize nuclear energy generation, which produces no greenhouse gases. The contentious issue has emerged prominently during the comment period that began after the rule was proposed in June.
The rule is intended to produce a 30 percent cut in power-sector emissions below 2005 levels by 2030, but industry has two big concerns.
One is an EPA policy designed as an incentive for states to keep operating reactors “at risk” of shutting down because of market pressure or expensive safety upgrades. Industry officials say the incentive is not enough and won’t work as intended.
The other issue concerns five nuclear reactors that are under construction. When it wrote its emissions proposal, the EPA counted these projects, in Georgia, South Carolina and Tennessee, as completed. The states say this makes their emission targets difficult because they are not allowed to count these cleaner plants’ lower emissions toward their mandated cuts.
Nuclear industry sources say the EPA has miscalculated.
“I think they’re looking at the whole nuclear issue again,” a utility industry source told the Washington Examiner.
The states also are worried about meeting their targets in the event that the nuclear reactors never come online. Even if they do, Georgia, South Carolina and Tennessee must drop their carbon output by 44 percent, 51 percent and 39 percent, respectively.
The EPA acknowledged in its proposal that it recognized both the possibility that the reactors might not come online and that this would create a problem for the states trying to reach their emissions targets.
“The EPA also realizes that reflecting completion of these units in the goals has a significant impact on the calculated goals for the states in which these units are located,” the proposal said. “If one or more of the units were not completed as projected, that could have a significant impact on the state’s ability to meet the goal.”
Even if the reactors get built, the states’ targets are stringent, said Steve Clemmer, director of energy research and analysis for the Union of Concerned Scientists. He thinks that’s no bad thing because he’d like the EPA to seek even bolder cuts. Nor is the EPA being inconsistent. For the purpose of calculating emissions, it also counted unfinished natural gas plants as being completed.
“From my perspective it makes sense,” Clemmer said. “If you didn’t include those new nuclear plants in the calculation, then once they got built if they used them for compliance then they essentially wouldn’t have to do anything.”
Many states have argued that the goals that have been set for them ask too much of them. The proposal is due to be finalized in June.
One way the EPA thought it might help states was by giving those with at-risk nuclear power a 6 percent credit, which is a rough translation of the amount of nuclear power thought to be at risk of shutting down nationwide.
Calling it a credit is a misleading, nuclear industry officials and experts say, because it actually functions more as a coercive measure.
That’s because the 6 percent is added to the state’s total for cutting emissions. The logic is that it would force utilities and states to keep the at-risk reactors running.
But the credit operates more as a stick than a carrot, said Jane Montgomery, an environmental lawyer at Schiff Hardin LLP. If states can’t keep their reactors afloat, they must find another way to make up for that 6 percent.
Part of the problem is that states can use up to only 6 percent of their nuclear generation to meet emissions cuts, even if a much greater share of their electricity comes from that cleaner source. That’s different than, say, wind or solar power, since states can apply all of that clean energy toward their carbon goals.
That has pushed states and utilities to draw up plans without nuclear power, said a Republican House source who works on energy issues. They’re turning to natural gas because those facilities are cheaper to build, can turn on and off more easily, and can be combined with renewable energy.
“They’re trying to make this formula work, but it has not been fully thought through,” the source said.
The EPA acknowledges through the policy that running nuclear plants isn’t cost-effective. But nuclear produces no greenhouse gas emissions, so it’s vital to achieve emissions reductions.
Owners of large amounts of nuclear power, such as Chicago-based Exelon Corp., say the measure is not enough to compel utilities to maintain their facilities.
EPA Administrator Gina McCarthy didn’t dismiss the possibility of changing nuclear’s 6 percent contribution to the cuts when she spoke with reporters at a recent Washington event.
“That dialogue is continuing. And we’ll take a look at that,” McCarthy said. “I think we all know that nuclear plays a significant part of our low-carbon strategy in terms of providing a lot of base-load capacity in this country for electricity. And that needs to be factored.”
The credit was not designed to prompt new nuclear construction, though the industry wants to bump up the role of nuclear enough to make that a possibility. The industry is looking for help from the federal government, as market forces have made nuclear power’s U.S. future tenuous.
Unlike gas-fired power plants, nuclear generators must run constantly. In some competitive markets where utilities compete with the cheapest sources of power, wind energy, aided by federal subsidies, has cut into nuclear’s share. Safety upgrades are another big cost.
“The problem is EPA thought they created an incentive, but they really in most minds did not,” Montgomery said.
