The fate of at least two, and possibly three, unprofitable nuclear plants in Illinois are hanging in the balance after the state’s Democratic Legislature adjourned this week without an agreement on subsidizing the reactors to keep them alive.
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The Legislature is expected to return later this month to close the deal, as Democratic Gov. J.B. Pritzker, legislators, environmental groups, and labor unions are motivated to preserve thousands of jobs associated with the plants and to maintain Illinois’ status as the largest producer of nuclear power, a central element of the state’s clean energy ambitions.
“What’s happening in Illinois is very unique. It’s not often you see legislative sessions extended, which signals just how important this bill is for the state, governor, and energy champions across the state,” said Christine Csizmadia, director of state governmental affairs and advocacy at the Nuclear Energy Institute.
But the impasse underscores the broader challenges facing large traditional light-water nuclear power plants first built in the 1950s that have struggled to stay economically competitive compared to cheaper natural gas and renewables.
Without any policy changes, half the current 93-unit nuclear fleet will retire by 2030, the Rhodium Group recently projected.
At the federal level, there is bipartisan support for giving nuclear plants tax credits or other subsidies to stave that off. The Biden administration’s fiscal 2022 budget proposes to spend $9.7 billion over 10 years for tax incentives to existing nuclear power plants.
Energy Secretary Jennifer Granholm testified to Congress last month that the Biden administration can’t “achieve our climate goals if nuclear power plants shut down.”
Nuclear provides more than half of the country’s carbon-free electricity.
A number of states with aggressive clean energy targets have implemented credit programs that reward nuclear plants for providing zero-carbon electricity.
That includes Illinois, which passed a law in 2016 providing 10 years of zero-emissions credits to the Clinton and Quad Cities nuclear plants operated by utility Exelon.
Exelon is warning it will shut down two of its other nuclear plants, Byron and Dresden, in the rural northern part of the state this fall if it doesn’t get more help soon. Unfortunately, that means federal assistance won’t be able to arrive in time.
The plants need to be refueled soon, but Exelon won’t proceed with that investment without assurance of state subsidies.
"Nothing at the federal level is going to happen in time to impact those decisions," said Craig Piercy, CEO of American Nuclear Society, which is based in suburban Chicago.
There is consensus among Illinois stakeholders that if Exelon shuts down the nuclear plants before renewable energy is scaled up, new natural gas-powered plants would spring up to meet the power demand, as has happened historically when nuclear plants retire prematurely.
“What is happening in Illinois is a conversation happening nationally. If you close a nuclear plant, how do you cope with the loss of clean energy, and what does that do to your emissions?” Piercy said.
Nuclear supplies more than half of Illinois’ power, while renewables produced 8% of the electricity generated in the state in 2019, almost triple the amount in 2010, but still less than coal and natural gas, at more than 30% combined.
Like other Democratic-run states that have helped nuclear plants, Illinois policymakers aim to include the aid as part of a larger clean energy package that also promotes the build-out of more solar and wind.
“That was one of the large motivations in order to bring clean energy and conservation groups together,” said Timothy Fox, vice president at ClearView Energy Partners, a research group. “The idea is to include provisions to increase procurement of solar and wind and keep existing nuclear in service long enough for other clean resources to backfill.”
A final energy deal is likely to be modeled after a Pritzker proposal introduced by Democrats in April, called the Consumers and Climate First Act, that includes more than 100 provisions such as a Green Bank to develop clean energy, setting pollution limits on power plants, providing funding to fossil fuel-dependent areas, spending on electric vehicle charging stations, and building transmission lines.
Pritzker’s plan also aims to achieve 100% clean energy by 2050 while raising the state’s existing requirement that 25% of electricity come from renewables by 2025 to a 40% renewable mandate by 2030.
According to local media reports, negotiations broke down this week over a disagreement on whether certain coal plants should be exempt from deadlines for shutting down.
But other details need to be worked out regarding the size of nuclear subsidies, how long they should last (Exelon wants 10 years of aid, but Pritzer offered five), and which plants should be eligible to receive them.
Another sore spot is that Illinois lawmakers interested in helping the nuclear plants want to maintain political distance from a bribery scandal facing the state’s main electricity provider Commonwealth Edison, an Exelon subsidiary.
“Providing financial support to nuclear reactors owned by a company that has faced allegations of bribery is an uphill battle,” Fox said.
Also, complicating matters is that Exelon says two more of its plants, Braidwood and LaSalle, face high risk of early retirement.
In a filing to the Securities and Exchange Commission this week, Exelon said the Braidwood plant faces “premature retirement due to unfavorable” power market rules that don’t reward it for providing zero-carbon electricity.
But the plant is expected to remain in service through May 2023, while LaSalle is projected to have a longer lifespan.
All sides agree that Byron and Dresden nuclear plants face imminent retirement without help from the state.
“Illinois is a nuclear state,” Piercy said. “To lose those plants means literally losing decades of progress in clean energy generation.”
Original Author: Josh Siegel
June 5, 2021 at 07:26AM