Mostly about Vermont Yankee: The Boston Meeting on the future New England Energy Mix

Looking forward to Nuclear Going Forward

On June 24, in Boston, Bloomberg BNA and Nuclear Matters co-sponsored an event about the future of nuclear,  Nuclear Going Forward.  The two organizations are holding a series of these joint events.  The June meeting was A Chain Reaction: The Role of Nuclear Energy in New England's Energy Mix.

The June meeting had an absolutely stellar line-up of speakers, including nuclear plant owners and nuclear start-up companies.  In this meeting, nuclear energy (current and future) was not compartmentalized, but rather presented as a whole. And the conference focused on New England!  I was delighted to go to it.

I wrote about my plan to attend the meeting in this blogpost, and you can see the videos of the meeting at the Nuclear Going Forward website.

Vermont Yankee and Nuclear Going Forward.

There were three main sections to the meeting.  I will discuss only the second section: a panel focused on existing power plants.

The panel started with extensive discussion about Vermont Yankee (video below). Topics included the reasons for Vermont Yankee shutting down, the consequences of Vermont Yankee shutting down, and the risk factors for other plants in the Northeast. Many of the statements made on this panel will be familiar to readers of this blog.  However, there were some factors that were new to me.

What is a "single plant? I knew that single, stand-alone plants are more vulnerable to being shut down. However,  I didn't remember that Millstone 2 and 3 have different vendors. They do not have the economies of "sharing" (operators, training, etc.) that most dual-unit plants can  boast.   They are more vulnerable than other dual-unit plants because their labor costs are higher.  It would be a disaster for the New England grid if these plants closed.

Do capacity payments help? I had been heartened to see that the forward capacity auction has been yielding higher prices.  That fact, coupled with grid-level "pay for performance," seemed to favor nuclear plants.  However, Mohl of Entergy pointed out that nuclear plants run with a very high capacity factors.  Most of their revenue comes from kWh produced, and only a  small part of their revenues are capacity-type payments (capacity and pay-for-performance).  Nuclear plants receive 15-20% of their revenue through the capacity auctions.  Plants that run a small percentage of the time get much higher percentages of their revenue from the capacity auctions.  In other words, increased prices at the capacity auctions don't help nuclear plants all that much.

Laughing all the way to the bank? During the Polar Vortex, prices on the grid soared and merchant plants gathered a lot of revenue.  All businessmen like extra revenue. Still,  Mohl of Entergy pointed out that this kind of volatility of energy prices is not good for anyone.  Businesses that can't predict their costs will begin to leave the area.  Consumers will have less to spend in the area as their utility bills take up more of their income.  The result can be a downturn. General economic downturns aren't good for consumers or for energy producers.  In other words, during the polar vortex, merchant plants weren't really laughing all the way to the bank.

Forward with Nuclear Going Forward

Nuclear energy is good for

• reliability (of course), 
• economic sustainability (prices are low and not volatile), and 
• environmental sustainability (no carbon, no acid gases, small quantity of mined material compared to fossil fuels of all kinds).  

The general consensus of the meeting, however, is that unless the grid begins to value these benefits, nuclear may have a rocky future.

Endnotes: 

About the meeting as a whole

You can see videos of the entire meeting at this link: http://nuclear-going-forward.bna.com

The first section of the meeting was an interview with John Kotek of DOE about DOE's funding for nuclear-based research.

The second section was a panel discussion about current plants.  The panelists were:
Judd Gregg, former Senator from New Hampshire, now with Nuclear Matters
William Mohl, President, Entergy Wholesale Commodities;
Daniel Weekley, VP, Corporate Affairs, Dominion Resources
(This blog post covered this section of the conference.)

The third section was a panel which included executives from forward-looking nuclear companies, such as LightBridge and NuScale.

Chris Gadomski (Lead Analyst, Nuclear) from Bloomberg New Energy Finance was the moderator for all sections.  As you can see in the videos, Gadomski asked excellent questions. He kept the meeting interesting and (miracle!) on schedule.

Attending Nuclear Going Forward

It was difficult to get to the meeting.  Appearing at 8:30 a.m. for a meeting in an expensive hotel in Boston's Back Bay is do-able if:

• you live in Boston and know the T
• you have the money to stay overnight in Boston, preferably at an expensive hotel in Boston's Back Bay.  

Neither was true for me.  I left my driveway in Vermont at 5:17 a.m. for what Google describes as a two-hour-and-ten-minute drive if there was only light traffic. I arrived at the meeting room at 9:05.  (Breakfast was over and the first session was starting.) Yeah, traffic was bad.  I wasn't the only one who was late.

Once I got there, it was worth it.  However, the choice of time and place did make me wonder. What audience were the meeting planners hoping to attract?  Why was the meeting set up in this difficult manner?

Rod Adams and Nuclear Going Forward

Rod Adams was also at the meeting, and his blog post about the meeting is here.  He has some interesting observations, including illuminating conversations with panelists.  There are over twenty comments on his post, and I encourage you to read both his post and the comments.