Delivering the Nuclear Promise from all California’s wind and solar ... ISONE 2015 CELT Report New...
Transcript of Delivering the Nuclear Promise from all California’s wind and solar ... ISONE 2015 CELT Report New...
Delivering the Nuclear Promise
Rod McCullumNuclear Energy Institute
NCSL Nuclear Legislative Working GroupNew Orleans, LA
November 16, 2016
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Nuclear Energy’s Full Value Proposition
Nuclear energy’s
value
Supports grid stability
Provides electricity
price stability
24/7 electricity
production
Prevents carbon
emissionsProvides clean air
compliance value
Anchors the local
community: jobs, tax base
Contributes to fuel &
technology diversity
Nuclear – Ready to Deliver
U.S. Nuclear Plant Capacity
Factor*
*Source: Energy Information Administration
92.2% in 2015
91.7% in 2014
89.9% in 2013
86.1% in 2012
89.1% in 2011
91.1% in 2010
• U.S. reactors set record 92%
capacity factor in 2015
• 798 billion kWh
• 62.9% of U.S. carbon free electricity
• 4 new reactors being built
• 81 licenses extended to 60 yrs.
• 1st application for extension to 80
years submitted (Surry in VA)
Nuclear Plant Shutdowns: The Situation
• Reactor shutdowns
- Four in 2013 (2 in California, Florida, Wisconsin)
- One at the end of 2014 (Vermont)
- One in 2016 (Nebraska)
• Wisconsin, Vermont, Nebraska shut down because of adverse market conditions
• Announced shutdowns
• Prior to 2020: 3 in Illinois, 1 in Massachusetts, 1 in New Jersey
• 2025: 2 in California
• Others at risk
The carbon-free electricity lost when San Onofre closed down was greater than the carbon-free electricity from all California’s wind and solar
generating capacity
18,097 GWh 16,985
GWh
San Onofre 2 & 3 generation inlast full year of operation (2011)
California wind and solargeneration full-year 2013
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• Average generating costs have decreased from peak of $39.75/MWh in 2012 to $35.50/MWh in 2015.
• Average generating costs have decreased 2.4% from 2014.
• Capital spending down 3% from 2014, and 26% from 2012 peak.
• $6.25 billion in 2015 capex.
Snapshot of 2015 U.S. Nuclear Plant Costs($ per MWh)
2015 Average Generating Costs
2015 Generating Cost
Total generating cost = fuel + capital + operating. Source: Electric Utility Cost Group.
FirstQuartile
IndustryAverage
Single Unit Sites
Multi-UnitSites
Forward Prices
Declining Wholesale Electricity Prices
$45-75/MWhPrice Range
$30-50/MWhPrice Range $30-42/MWh
Price Range
Market Stresses … In Brief
• Low growth (in some cases, no growth) in electricity demand
• Continuing surge in supply of low-cost shale gas• Market design issues
- Fuel/technology diversity taken for granted and undervalued
- State and federal mandates and subsidies for renewables - Lack of recognition of valuable attributes of nuclear- Price suppression in energy markets
• Transmission constraints
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New England Forward Power Prices for 2019
Sources: Platts Mass Hub average forward power prices; 2020 New
England Energy Demand: 145 GWh; ISONE 2015 CELT Report
New England Forward Power Prices for 2015
Pilgrim Announcement Oct. 2015
Vermont Yankee Announcement Aug. 2013
$2.30/MWh
$2.50/MWh
• Pilgrim announcement met with $2.30/MWh increase in futures price for New England
- ~$330 million in additional costs to consumers in one year
• Market reaction to Vermont Yankee similar to Pilgrim
• PJM estimated losing three at-risk Illinois plants would raise prices $2.70 - $3.80/MWh in ComEd zone
Losing Nuclear = Higher Prices to Customers
You are here
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Genesis of the Nuclear Promise
• Our industry is operating in electricity markets that are deluged with natural gas at historically low prices
• Nuclear industry capability factor and reliability is at extraordinary levels…but total generating costs at nuclear plants have increased 28% in the last 12 years.
• “Business as usual” approach will not successfully address the challenges of rising costs and inadequate revenue
• Advance safety, reliability and economic performance together.
Part of the Solution: Delivering the Nuclear Promise
• Sustain high levels of safety and reliability
• Identify opportunities to re-design plant processes, drive innovation to improve efficiency and effectiveness
• Gain greater value for nuclear energy in electricity and clean air policy
Goal: Average cost of electricity is $28 per megawatt-hour
Four Building Blocks
Analysis and MonitoringObjective: Analyze plant cost drivers and identify opportunities to improve efficiency
Value RecognitionObjective: Leverage federal and state policies to ensure recognition of nuclear energy’s value
Process and Program RedesignObjective: Re-design nuclear plant processes to improve efficiency while advancing the fundamentals of safe, reliable operation
Strategic CommunicationsObjective: Implement a communications strategy to ensure industry engagement and stakeholder awareness
Building Block: Analysis and Monitoring
• CNO-led teams identified priority areas Including improvement opportunities in work management, radiation
protection, training, security and preventive maintenance
• Completed analysis of plant cost drivers Identified opportunities for efficiencies to be gained and
administrative burden reduced…
While maintaining safety and reliability
• Steering committee identified implementation “windows”
Pace and scope of site implementation to be determined by the company that owns and operates plant
Teams and CNO Leads
• Corrective Action Program Danny Bost, Southern Nuclear
• Engineering Tim Rausch, Talen Energy
• In-Processing Bill Pitesa, Duke Energy
• Oversight and Assessment Mano Nazar, NextEra Energy
• Preventive Maintenance Templates Neil Wilmshurst, EPRI
• Radiation Protection Fadi Diya, Ameren Missouri
• Regulatory Efficiency Mano Nazar, NextEra Energy
• Risk-Informed Operations Bob Bement, Arizona Public Service
• Security Bryan Hanson, Exelon
• Training Randy Edington, Arizona Public Service
• Transform Organization Tim O’Connor, Xcel Energy
• Work Management Preparation Dennis Koehl, South Texas Project
• Supply Chain Adam Heflin, Wolf Creek Nuclear Operating Corp.
Building Block: Process and Program Redesign
• 45 efficiency bulletins expected by end 2016
• Enabled savings approaching $500 million
Efficiency must take its place with hallmarks of
safety, reliability
• Anticipating and addressing emerging regulatory or technological issues
NEI Efficiency Bulletins
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• Vehicle for deploying efficiency ideas to fleet
• Value proposition - explains how idea advances safety, reliability and efficiency; Points to applicable guidance
• Levels of Commitment:- Mandatory Initiative
o All must implement if approved by 80% vote of industry CNOs
- All expected to implement
- Utility discretion
Examples of Completed Efficiency Bulletins
• EB 16-02: Implement Graded Approach to Walk-downs
• EB 16-04: Source Checking Personnel and Tool Contamination Monitors
• EB 16-22: Implementing and Effective and Efficient Work Management Process
• EB 16-26a,b,c,d: Standardization of Nuclear Access Requirements, In-processing Training, Radiation Worker Training, and Supplemental Supplier Contracts
Building Block: Value Recognition
• Increasing value recognition for existing reactors- Earning value for clean air attributes
New York’s new clean energy standard
Upstate nuclear plants to receive appropriate compensation
Precedent for other state, regional policy
- Advocating changes in electricity markets for additional value: Capacity pricing
Energy price formation
- Pursuing changes at FERC and RTOs
- Clean Power Plan implementation plans should recognize value of nuclear energy
Solutions Emerging Among the States (redesign)
• New York – Clean Energy Standard approved by Public Service Commission
• Ohio/Pennsylvania – First Energy actively seeking a solution for nuclear units recognizes their environmental benefits
• Illinois – Evaluating legislative proposal similar to New York
• Connecticut – Legislation including Millstone cleared Senate
Building Block: Strategic Communications
• Communications emphasizing industry’s effort to enhance efficiency, need for value recognition
• Advocating greater value for nuclear power plants in electricity and clean air markets
• Workforce Communications
A few words about the back end
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Effective Management of Decommissioning and
Used Fuel
Decommissioning Landscape
• NRC has a proven regulatory framework for decommissioning activities- 10 plants have safely completed decommissioning- 19 plants are in the process of decommissioning- 5 plants* planning near term shutdown
• There currently is no regulatory framework to govern the transition from operations to decommissioning- The process of transitioning from operations to
decommissioning is highly inefficient – Rulemaking needed
• Stranded used fuel is a major cost driver
*Pilgrim, Oyster Creek, Quad Cities 1&2, Clinton
Less than 25% of decommissioning
$ are spent actually tearing down the plant
Vast Energy Produced – Small Volume
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All the used nuclear fuel generated, if stacked, would only cover one football field <10 yards high
Yucca Mountain
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Other Used Fuel Management Improvements
Private entities are seeking to develop consolidated interim storage at away from reactor sites
• Waste Control Specialists has applied for an NRC license to store used fuel in West Texas
• The Eddy-Lea Energy Alliance plans to do the same thing in New Mexico
• DOE is now seeking to engage
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Game Changers on the Drawing Board
• Accident Tolerant Fuel
• Small Modular Reactors
• Advanced Reactors
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Conclusion
• The future of nuclear energy in the U.S.
• Industry’s Delivering the Nuclear Promise initiative seeks to keep nuclear in the mix
• How states interact with electricity markets will significantly affect the outcome
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Growth? Decline?
Questions?
Rod McCullum
Nuclear Energy Institute
202-739-8082
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