Wednesday, May 25, 2011

Nimby and Nukes: Vermont Utility Makes a Deal with Seabrook

The Deal

Yesterday Green Mountain Power (GMP) announced a deal to buy electricity from Seabrook Station in New Hampshire. The deal was at a very good price, 4.66 cents per kWh, less than Vermont Yankee's recent offer price of 4.9 cents, and far less than the 5.8 cents from Hydro-Quebec that led to general rejoicing earlier this year.

The amount of power purchased from Seabrook varies between 15 and 60 MW from year to year. In 2012, GMP will buy 15 MW of power from Seabrook. This amount goes up to 60 MW in 2015. According to the article, GMP now buys 100 MW from Vermont Yankee. (GMP and Central Vermont Public Service share most of the approximately 200 MW that Vermont Yankee supplies to Vermont.)

The GMP-Seabrook contract is for 23 years. However, Seabrook's license is up in twenty years. Seabrook, like Vermont Yankee, is a top-performing plant and New Hampshire doesn't have an Act 160. So I guess signing for twenty-three years is okay for a plant in New Hampshire. Assuming they continue to operate well and get an NRC license renewal, New Hampshire will not stop Seabrook from operating.

There is Still A Big Hole in the Power Supply

So, approximately 60 MW of the 200 MW of Vermont Yankee's instate power will now be replaced by Seabrook power at good price. In Vermont, rejoicing has begun, as shown by Emerson Lynn's post A Nuke Deal for Vermont: the Price is Right at Vermont Tiger. With low prices for IBM, IBM will stay in Vermont. So will Green Mountain Coffee Roasters. The price in this contract is certainly right, but it is a price I am sure Vermont Yankee could match.

Still, 60 MW purchased from Seabrook instead of 600 available from Vermont Yankee (counting the power used by the neighboring states) leaves a significant hole in the power available to the grid. Once again, I use the Department of Public Service graph for electricity supply for Vermont to illustrate.

The filled-in areas in the chart below are committed resources. There's a lot of blank space, not filled in, to the right of 2012. Seabrook's 60 MW is not going to fill it.

Also, in my opinion, the power supply situation is worse than it appears on this chart. Note that the light-blue area near the top expands from almost nothing right now to about 500 GWh in 2016. This is wind energy. But wind energy is simply not coming on-line quite that fast, as I see it. Also, recent studies have shown that capacity factors for inland wind farms are far lower than expected. In a recent blog by Willem Post at the Energy Collective, he notes that measured wind turbine capacity factors in Maine and Vermont have been about half of what might be expected. Therefore, in my opinion, this chart overstates the amount of wind energy that will be available within three to five years.

As usual, double-click on the chart to see a bigger version.

Have We Been Saved By Seabrook?

I don't think so. I am delighted that we will be getting some power, clean reliable nuclear power, at a good price from our neighboring power plant. This may keep the price of electricity down in the region. It will certainly help lower the price of electricity sold by Green Mountain Power. (I buy my power from Green Mountain Power, so I'm happy!) However, there's going to be a lot of power bought at the market prices if Vermont Yankee closes, which is why we have this quote from Green Mountain Power.

"This power contract isn't about Vermont Yankee," said Mary Powell, president of Green Mountain Power. "As we all know, Vermont Yankee is trying to work its way through their challenges, from a legal and regulatory perspective. If they manage their way through that, we've always seen that it would be our desire to have conversations with them."

Jobs and Vermont Yankee

I like to see the emphasis on low electricity prices to keep jobs in Vermont. However, I need to point out that the two major studies of the effect of closing Vermont Yankee did not address the effect of electricity prices on jobs. These reports only looked at job loss and tax loss from shuttering the plant. These reports are the Legislature's Consensus Report, and the IBEW Economic Report, which I have mentioned many times in the past. Their conclusions are that if Vermont Yankee closes:

  • Job loss is estimated at 1100 to 1300 jobs.
  • Revenue loss is $60 to $93 million a year
  • Tax loss is $6 to $12 million a year.

These facts have not changed.

Closing Vermont Yankee will still have a devastating effect on the economy of southern Vermont. This is true even if we buy some power at a good rate from another nuclear plant.

End Note: I had a post yesterday at ANS Nuclear Cafe about solar and the grid. I feel that people need to understand the role of the grid in net-zero solar installations.

Update: Art Woolf blogged at Vermont Tiger yesterday about this purchase and reliability. Woolf's post started with James Moore's of VPIRG's statement: We’d prefer to see our state’s utilities moving away from all forms of dirty and unreliable power, including nuclear energy.

Second Update: NEI Nuclear Notes also has a good post on this: Replacing the Foot You Shot Yourself In.

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