Entergy announced today that Pilgrim will close by 2019. Here are two links:
The Entergy announcement includes many subsidiary links
The Boston Globe has a good article on this breaking news.
Entergy is going to have a press conference today at noon Eastern Time. There will be more information at that time.
Some Thoughts on Pilgrim and on the Grid
There is some question about exactly when Pilgrim will close. Entergy has "contracted with ISO-NE" to supply power from Pilgrim until 2019 (Boston Globe article). This means that Pilgrim will refuel again…unless they can cut a deal with another power plant to supply power after 2017. Pilgrim's latest refueling outage started in April of this year, and it is roughly on a biennial cycle. So Pilgrim is fairly sure to keep running until 2017, but may or may not refuel at that time, depending on factors such as whether it can find another power plant to take over its obligations to ISO-NE.
Well, all the stories say "supply power" but it is really about the capacity markets, not the power markets. Plants bid in years ahead to supply "capacity"…that is, to be available to supply power when needed. Plants are paid two ways: power payments and capacity payments.
- A plant that supplies power most of the time (base load plants) gets most of its revenue from selling power (MWh sold). This would be the case with Pilgrim.
- A plant that supplies power only part of the time (a peaker plant) gets a much higher proportion of its revenue from capacity payments (MW available when called upon). This would be the case with most gas plants.
With so many plants retiring (Vermont Yankee, coal plants), available capacity has fallen and (supply and demand) capacity payments have soared. I encourage you to look at a recent chart on Capacity Payments in the Forward Capacity Market, from James Bride's keynote presentation at an ISO-NE meeting in New Hampshire last week. The chart, on page 12 of the presentation, shows capacity payments going from $3.21 per kWmonth in 2014/2015 to $9.55 per kWmonth in 2019.
Thoughts on the ISO-NE meeting
I was at the Consumer Liaison Group meeting of ISO-NE last Friday, October 9. I am (currently) the only Vermont representative to the Coordinating Committee for that group. (Yeah. I need to do a geeky blog post on this.)
For right now, however, please look through the rest of the Bride presentation, especially the section on "missing money."
Intermittent renewables get much of their money from subsidies of various types, not from the grid. Therefore, they can bid into the grid at artificially low costs for their power, even bid in at negative numbers (we will PAY you to take our power!). This lowers the power price on the grid, and particularly hurts plants that make a lot of power, like base load plants. As base load plants retire because they can't make enough money to keep operating, the amount of capacity available diminishes, capacity payments go up, and peaker plants get proportionately more money. Peaker plants always get a higher percentage of their money from capacity payments, but when base load plants retire, they get even more money from capacity payments.
There were several presentations on the role of intermittents on the grid. Robert Ethier of ISO-NE was on the panel, and the Ethier presentation struck me as surprisingly cheery about predicting more base load plants will retire. He claimed that: power prices will go down, capacity prices will go up, but the market will take care of everything. That is my interpretation of his talk. I didn't ask him a question, but I did ask a question of Anne George of ISO-NE after her presentation. ISO-NE supposedly has some concerns with a one-fuel-source grid (natural gas) but they don't seem to be worried overmuch.
The Closing of Pilgrim Nuclear Plant is a Clear Victory for Fossil Fuels.
Update: Graphic from Bill Mohl (Entergy) press conference this morning, showing where different types of plants get their revenue. Thank you to Entergy for sharing this graphic.