Renewable Power Push Threatens Last Two New England Reactorsby
Massachusetts plan would boost renewable share to 50 percent
States are facing a wave of nuclear power plant closures
A proposal by Massachusetts to boost the use of renewable energy may put New England’s last two nuclear reactors out of business and undermine the state’s efforts to cut carbon emissions, according to an industry group.
Legislation requiring utilities to use renewable power to meet nearly half the state’s energy needs would test reactors already grappling with cheap natural gas prices and falling demand, said Dan Dolan, president of the New England Power Generators Association Inc. The legislative session ends July 31. Governor Charlie Baker supports the measure.
While backers says the measure is needed to help the state meet a target to cut carbon emissions 25 percent below 1990 levels by 2020, Dolan said it could backfire. If Dominion Resources Inc.’s Millstone plant in Connecticut and NextEra Energy Inc.’s Seabrook plant in New Hampshire close as result of the renewable mandate, Massachusetts will lose a major source of zero-emitting electricity, he said.
“You could very well do all this contracting and knock out the nukes, and from an emissions standpoint you end up at the same place,” Dolan said in an interview July 8. The legislation “says the rest of the competitive generation industry isn’t allowed to compete for roughly 50 percent of the market.”
The proposal comes as states face a raft of reactor closures. Entergy Corp. shut its Vermont Yankee reactor in 2014 and announced it will close its Pilgrim reactor in Massachusetts in June 2019 as the shale gas boom sent prices for the fuel plummeting. New York said last week it could provide about $965 million in subsidies over two years to help support struggling nuclear plants as part of a plan to promote clean energy.
On Wednesday, Entergy said it’s in talks to sell its James A. FitzPatrick nuclear plant in New York to Exelon Corp. The deal depends “largely on the final terms and timeliness of the New York State Clean Energy Standard,” Bill Mohl, president of Entergy’s wholesale commodities unit, said in a statement.
Matt Mooren, a Denver-based energy markets analyst with PA Consulting Group, said historically low wholesale power prices are a bigger threat to nuclear generators than the renewable mandate.
The legislation won’t have “a major impact on nuclear relative to what natural gas prices are already doing,” Mooren said. “While it is a negative as it relates to base load nuclear economics, it’s not as big of a negative.”
Dominion declined to comment in an e-mail. E-mails and calls seeking comment from NextEra weren’t returned.
“This legislation has the potential to not just forestall, but avoid the increase in carbon resources,” Greg Cunningham, director of clean energy and climate change for the Conservation Law Foundation, said in an interview. “It really could be transformational, not just for Massachusetts but for the region itself.”
Power generators, including Exelon and Calpine Corp. oppose the renewable mandate. It will mean lower sales for the region’s power suppliers and higher-cost hydropower from Canada, with the added expense passed on to consumers, the companies said in a September letter to lawmakers.
“It’s hugely disappointing that Massachusetts’ elected leadership are considering an out-of-market deal that is likely to undermine the economics of other, existing zero-carbon resources, such as existing nuclear plants,” Susan Tierney, a Denver-based senior adviser at the Analysis Group, a consulting company, said by e-mail July 11.
Spot wholesale power at New England’s benchmark Boston hub fell $12.73, or 32 percent, to average $26.83 a megawatt-hour during the hour ended at 3 p.m. on Thursday from the same time a day earlier, grid data compiled by Bloomberg showed.