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The Impact of Closing Vermont Yankee Nuclear Plant

The New England Electric Grid, NEEG, managed by ISO New England, ISO-NE, has a generating capacity of about 34,020 MW, power supplied is about 130,000 GWh/yr. It includes over 350 central power plants and 8,000 miles of high-voltage transmission lines to provide power to about 6.5 million customers. The 2010 NEEG power is 55.4% is from CO2-producing fossil fuels (44% gas, 11% coal, 0.4% oil), 29% from CO2-free nuclear, 6.2% from CO2-free hydro, 3.3% from interstate transfers, 3% from CO2-producing wood waste, 2.4% from CO2-producing solid waste and 0.7% from Other i.e., CO2-free wind, solar, etc.  http://www.iso-ne.com/nwsiss/grid_mkts/enrgy_srcs/index.html

 

Almost all of this power is STEADY power and the grid is designed accordingly. The reason the few New England nuclear plants produce so much electricity is because their capacity factors, CFs, are about 0.92, much higher than the other plants on the grid.  

 

Vermont Yankee, VY, Mark 1 type, boiling water reactor, BWR, rating 620 MW, replacement cost about $4 billion, produces 4,500-5,000 GWh/yr of LOW-COST, CO2-FREE, 24/7/365, STEADY power. 

 

Entergy, the owner of VY, has requested the US Nuclear Regulatory Commission, NRC, to extend the VY license to 2032. An unusual request? In the US, 17 of 36 plants with BWRs had their license extended from about 40 years to about 60 years. All of the extensions, except one, were for Mark 1 reactors. 

 

Entergy also needs a Certificate of Public Good from the Vermont Public Service Board, an entity created by the Legislature. The Vermont legislature has voted on a resolution to close VY in 2012. If the Board withholds the Certificate, Entergy will likely go to court to protect a multibillion dollar asset of its shareholders. VY will be operating while the case is in court which may take some years.

 

Removing VY, fully paid for, from the CO2-free column into Safestore for 60 years is an unwise waste of CO2-free resources. The US should be ADDING power plants to the CO2-free column to reduce global warming.  

 

Vermont acting on its own to shut down VY is unfair and counterproductive to the CO2 reduction efforts of the other New England states.

 

STUDY SUMMARY

 

Economic and Environmental Impact

 

If VY stops operating it will:  

 

– increase Vermont power cost by $620,500,000 during the 6-yr period after VY is closed.  

 

– raise Vermont electric rates from $0.120/kWh to $0.137 kWh, or 14.2%.  

 

– require a capital expenditure to implement renewable power systems in 6 years = 2,086/3,595 ($2.49 billion + $5.14 billion) = $4.43 billion. See Vermont Electric Power in Transition report, pg 3. 

 

http://www.coalitionforenergysolutions.org/vt_elec_pwr_in_transitionpr.p...

 

– add 66 billion lbs of CO2 to atmosphere, because of power purchases from the grid for 6 years.  

 

VY’s direct employment is about 650 and its direct payroll, with benefits, is about $80 million per year. The economic multiplier effect is about three, meaning many businesses in a 25-mile radius from VY, a 300-sq mi area, will be under significant ADDITIONAL economic pressure and will have to cut staffs; estimates are more than 1,000 employees.

 

The closing of VY would mean this 300-sq mi area will become an economic backwater, just as Windsor, Vermont, became a backwater when companies moved out; Windsor has not recovered after 30 years. 

 

For comparison: the Duane Arnold Energy Center, Palo, Iowa, Mark 1 type, BWR, rating 615 MW, employs 600 people, annual payroll $85 million, received a 20-year license extension from the NRC in December 2010.

 

http://en.wikipedia.org/wiki/Duane_Arnold_Energy_Center

http://www.nrc.gov/reactors/operating/licensing/renewal/applications/dua...  

 

Impact on New England States

 

Instead of being a significant benefit to the economies and budgets of the States of Massachusetts and Vermont, the area will become a significant burden for many years. Tax collections will be less by many millions of dollars and payments for unemployment benefits, etc., will increase. 

 

New England states will have deficits for years to come. People, including voters, are suffering; the Great Recession is here and now. There is no money for heavily-subsidized, multibillion dollar renewables buildouts. 

 

The last thing New England  households and businesses need is to see unnecessary electric rate increases that will be reflected as higher prices and lower living standards later. Closing VY means Vermont would be shooting itself and other New England states in the feet at the worst of times. 

 

Vermont’s standing among New England states would be diminished at exactly the time it needs to cooperate with these states to integrate PV solar and wind power into the grid. 

 

Vermont acting on its own to close down VY and trying to replace a part of the VY power with heavily-subsidized, multibillion dollar renewables buildouts that produce just a little of expensive power per invested dollar, remove just a little CO2 per invested dollar and create just a few jobs per invested dollar will not lead to economic prosperity and higher living standards for Vermont and New England.  

 

Subsidies to Attract Capital

 

Vermont, a very marginal state for PV solar and wind power, will have to offer 

 

– state tax credits, similar to the current 30% federal tax credits 

 

– PV solar FITs of at least $0.30/kWh and wind FITs of at least $0.08/kWh 

 

– 20-year power purchase agreements, PPAs 

 

to attract the billions of dollars required to build the PV solar and wind systems that would replace the VY power used by Vermont. 

 

Adding large quantities of subsidized renewable power will greatly increase electric rates in Vermont and drive employers, such as IBM, out of state or become less eager to expand, and will discourage other businesses from coming to Vermont.

 

For comparison: 

 

– current ISO-NE grid prices are about $0.06/kWh. 

– Hydro-Quebec and VY power on long term contract is about $0.06/kWh AND requires no capital investments.

 

Grid Modifications 

 

The ISO-NE grid is not designed for large variable and intermittent renewable power inputs. Large quantities of such power cannot be fed into the grid without several hundred million dollars of modifications. 

 

Rushing into expensive wind and solar power without, what engineers call, systems planning (in this case grid-wide planning, including Hydro-Quebec) is unwise.

 

Power Purchases

 

The closing of VY would immediately require increased power purchases from Hydro-Quebec (if transmission capacity is available) and from the grid, and ultimately would require Vermont to spend billions of dollars for the construction of PV solar and wind systems to generate 2,086 GWh/yr to replace the power provided by VY. 

 

Other New England states also will have to increase their purchases from the grid and, if so inclined, raise billions of dollars for PV solar and wind systems to generate about 2,500-3,000 GWh/yr to replace the power provided by VY.

 

Power purchases from the grid by New England states due to the closing of VY will last for many years, because it will take many years to construct the renewables capacity to replace VY. This means the CO2-producing power plants on the grid have to increase their outputs to provide replacement power to New England states; the CO2-free nuclear plants on the grid already are operating near maximum capacity. A step backwards for global warming.  

 

PV SOLAR, BIG WIND AND SMALL WIND IN VERMON

 

PV Solar

 

New England, because of its rainy, snowy and cloudy weather, is a very poor place for solar power. 

 

Vermont’s statewide PV solar capacity factor is about 0.12 out of a theoretical maximum of about 0.143. 

 

For comparison: Germany, with similar weather as New England, has a national PV solar capacity factor of about 0.095 out of a theoretical maximum of about 0.115. The German government, under budget pressures, has significantly reduced the PV solar FITs, as has the Spanish government.

 

The reasons for the deviation is that PV panels are aging, are dusty, roofs are not true-south-facing and not correctly-angled, snow covers the panels for about 20-30 days, or more, during the winter, etc. 

 

PV solar power output varies with the sunlight, of not much use on cloudy days, during the winter season, when panels are snow-covered about 20 days, or more, and is not “there” at night, requiring CO2 power purchases from the grid throughout the year. 

 

PV solar power in New England requires various subsidies equivalent to about 50 to 60 percent of the capital cost to be competitive with utility power.

 

The PV solar buildout in Germany would not have happened without the extremely high FITs. Germans, because of rapidly rising electric rates, are beginning to regret their huge PV solar investments and small PV solar power production. The German government, under budget pressure, has significantly reduced the FITs.

 

http://www.coalitionforenergysolutions.org/residential_pv.pdf  

http://theenergycollective.com/willem-post/46824/impact-csp-and-pv-solar...

http://theenergycollective.com/willem-post/46142/impact-pv-solar-feed-ta...

 

Big Wind

 

Big wind power on some high ridge lines in Vermont has a CF of about 0.33; the power output varies with the wind strength, steadiness and duration. The power is not “there” when there is no wind, too little wind, or too much wind, requiring CO2 power purchases from the grid throughout the year. 

 

The 2.5-3 MW, 400-ft tall, highly visible wind turbines must be: 

 

– located on high ridge lines, 2,000 ft, or higher, with good winds 

– accessible by roads which must be maintained throughout the year 

– near existing power lines with adequate capacity  

– sited on soils that provide adequate foundation support

– located about a mile from private residences to reduce noise impact, especially at night

– designed for extreme weather conditions 

 

There are not many miles of ridge line in Vermont that satisfy all these necessary conditions. 

 

Whereas, there is a large POTENTIAL for wind power in Vermont, only a small fraction of it is economically, socially and environmentally feasible. 

 

http://theenergycollective.com/willem-post/51642/dutch-renewables-about-...

 

Small Wind

 

Small wind, 10 kW or less, usually located away from high ridge lines, has a CF of about 0.10; its power is even more expensive than PV solar power. Vermont’s subsidies for small wind is unwise policy and an egregious waste of scarce taxpayer money. 

 

http://www.coalitionforenergysolutions.org/residential_wind.pdf

 

ANALYSIS OF ALTERNATIVES 

 

Per the VPIRG “Repowering Vermont” report, Strong Case, renewable power is to be 15.4% PV solar and 27.4% wind, for a total of 42.8% = 3,595 GWh/yr by 2032. The installed capital costs of the VPIRG Strong Case is about $2.49 billion for small and big wind and about $5.14 billion for small and big PV solar (2010$). See Vermont Electric Power in Transition report, pg 3.  

 

http://www.coalitionforenergysolutions.org/vt_elec_pwr_in_transitionpr.p...

 

Vermont uses about 40% of VY’s output = 2,086 GWh/yr = 34% of Vermont’s 2008 electricity consumption. The impact of providing the 2,086/3,595 fraction of the VPIRG Strong Case with PV solar and wind renewables will be studied. 

 

Before rushing into closing VY, some questions need to be answered: 

 

– what will be the installed capital cost of the renewable power systems to make up for VY power? 

– what will be the electric rate percentage increase? 

– how much additional CO2 will be produced due to closing VY? 

– what will be the impact on the economy in the vicinity of VY and on the State of Vermont. 

 

Two alternatives will be studied to answer these questions. 

 

The assumptions are:

 

– it will take at least 6 years to buildout the renewables capacity 

– a new PPA with VY is at $0.06/kWh (the current PPA is at about $0.042/kWh and expires in 2012) 

– grid power is sold to utilities at $0.06/kWh

– Vermont’s 2008 consumption of 6,134 GWh/yr will stay about the same until 2018 to simplify the analysis  

– it will take about 6 years to build the PV solar and wind systems and integrate them into the grid; based on renewables progress to-date, 6 years appears to be extremely optimistic. 

 

BASE CASE: VY CONTINUES OPERATING  

 

Consumer cost of power would consist of: 34% VY power + 66% grid power for 6 years = $4,416,500,000. 

See note 1.  

 

Consumer statewide average unit cost of power for 6 years = $4,416,500,000/(6,134 GWh/yr x 6 yrs) = $0.120/kWh  

 

Capital cost is ZERO dollars.  

 

CO2 impact is unchanged.  

 

ALTERNATIVE CASE: VY STOPS OPERATING

 

Vermont would have to:  

 

– build, own, operate, maintain renewable power sources which are assumed to come on line from 2012 to 2018; 

 

– offer an FIT of about $0.30/kWh for solar and about $0.08/kWh for wind, and 20-year PPAs to attract capital, i.e., billions of dollars.  

 

Consumer cost of power would consist of: grid power to replace VY + renewable solar and wind power to replace VY + 66% grid power for 6 years = $5,0370,000,000. See note 2.  

 

Consumer statewide average unit cost of power for 6 years = $5,0370,000,000 /(6,124 GWh/yr x 6 yrs) = $0.137/kWh  

 

Capital cost to implement renewable power systems in 6 years = 2,086/3,595 ($2.49 billion + $5.14 billion) = $4.43 billion  

 

CO2 charged to Vermont (40%) = 620,000 kW x 8,760 hrs/yr x 0.9 x 6 yrs/2 x avg 1.8 lb CO2/kWh = 26,395,632,000 lbs 

 

CO2 charged to other states (60%) = 1.5 x 26,395,632,000 lbs = 39,593,448,000 lbs

 

CALCULATIONS AND NOTES   

 

Vermont utilities buy their power at an average of about $0.06/kWh and sell it at an average of about $0.12/kWh. The “$0.06/kWh added by utility” is for distribution, various utility costs and return on investment. 

 

Note 1. $0.12/kWh ($0.06 +$0.06, added by utility) x 2,086 GWh/yr x 6 yrs + $0.12/kWh ($0.06+ $0.06 added by utility) x (6,134 GWh/yr – 2,086 GWh/yr) x 6 yrs = $4,416,500,000  

 

Note 2. $0.12/kWh ($0.06 + $0.06, added by utility) x 2,086 GWh/yr x 6 yrs/2 + [$0.36/kWh ($0.30 + $0.06, added by utility) x 0.154/0.428 x 2,086 GWh/yr + $0.14 ($0.08 + $0.06, added by utility x 0.274/0.428 x 2,086 GWh/yr] x 6 yrs/2 + $0.12/kWh ($0.06+ $0.06 added by utility) x (6,134 GWh/yr – 2,086 GWh/yr) x 6 yrs = $5,0370,000,000  

 

Power cost increase: $5,037,000,000 – $4,416,500,000 = $620,500,000, equivalent to raising the unit cost from $0.120/kWh to $0.137 kWh, or 14.2%; this is in addition to future increases due to rising energy prices and any additional acts of the Vermont Legislature that will raise energy prices. 

 

INCREASED ENERGY EFFICIENCY

 

A much more economically-viable and environmentally-beneficial measure to reduce CO2 would be increased energy efficiency. 

A 60% reduction in Btu/$ of GDP is entirely possible with existing technologies. Such a reduction would merely place the US on par with most European nations.

 

It would be much wiser, and more economical, to shift subsidies away from expensive renewables, that produce just a little of expensive, variable, intermittent energy, towards increased EE. Those renewables would not be needed, if we use those funds for increased EE. 

 

EE  is the low-hanging fruit, has not scratched the surface, is by far the best approach, because it provides the quickest and biggest “bang for the buck”, AND it is invisible, AND it does not make noise, AND it does not destroy pristine ridge lines/upset mountain water runoffs, AND it would reduce CO2, NOx, SOx and particulates more effectively than renewables, AND it would slow electric rate increases, AND it would slow fuel cost increases, AND it would slow depletion of fuel resources, AND it would create 3 times the jobs and reduce 3-5 times the Btus and CO2 per invested dollar than renewables, AND all the technologies are fully developed, AND it would end the subsidizing of renewables tax-shelters at the expense of rate payers, AND it would be more democratic/equitable, AND it would do all this without public resistance and controversy.

 

http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses

http://theenergycollective.com/willem-post/61774/wind-energy-expensive

http://theenergycollective.com/willem-post/64492/wind-energy-reduces-co2...


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