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Ohio’s Nuclear Power: Will it Stay or Will it Go?

Will Ohio lose both its nuclear power plants? If gauging the response of legislators is any indication, Ohio’s nuclear plants seem to be doomed.

Clearly, grassroots organizers such as Generation Atomic, the American Nuclear Society, and North America Young Generation in Nuclear have failed to convince legislators to act to save Ohio’s only nuclear generation assets. These organizers have been working for months under the ultimatum from FirstEnergy Corp, the plant’s owners: convince Ohio lawmakers to pass ZEN (Zero Emission Nuclear) legislation by June 30th or else the plants will close and decommissioning will begin. That threat carries with it the loss of more than $1 billion in economic activity for the state, the loss of more than 1,000 good paying jobs, and the local county tax bases where the plants reside will be hit with a near extinction level event.

Why is this happening? Why have Ohio’s nuclear plants become so unprofitable?

“It’s the federal government’s fault, stupid” is the answer given by nuclear energy supporters in their plea to get State legislators to protect these generation assets from egregious federal policies.

For the nearly four decades since the Three Mile Island (TMI) nuclear accident, the fastest growing source of zero-carbon energy, nuclear, has been stymied. Insanely expensive new rules and regulations imposed by the federal Nuclear Regulatory Commission (NRC), since the TMI accident has exponentially ratcheted up  the cost of nuclear power. Power plants that once took only a year to build and cost $1 billion now take 10 years to build and cost near $10 billion.

“This is the price of progress” said Jon Morrow, chief economist with the eGeneration Foundation. “The costs associated with innovating within the nuclear space to keep pace with other technologies, like natural gas, became cost prohibitive. Combine bad federal policy to the policy of lobbying organizations, such as the Nuclear Energy Institute (NEI), that have just maintained the status quo for the industry, and the Nuclear energy industry as a whole, is now learning a very painful lesson: innovate or die!”

Maintaining the status quo policy for the nuclear industry was, in hindsight, setting up many nuclear plants, like Ohio’s Davis Besse and Perry Nuclear power plants, for failure when breakthroughs in natural gas extraction came to fruition.

Natural gas is cheap, abundant, and clean and it is politically popular to keep energy costs low and the environment clean. So as the petroleum industry rushes to build out more cheap natural gas plants, the diversification of Ohio’s energy mix becomes more concentrated in the hands of natural gas.

“Throwing all of our eggs into one basket for a fuel source that prices historically fluctuates wildly from decade to decade is not a wise move.” said Steve Arndt, Ohio State House Representative. “This decade, the price of natural gas is cheap, but through expanded use and with greater exportation, who knows, there is a good possibility that nuclear could be very competitive within the free market again.”

Recently, grassroots organizers arranged a forum at the Ohio State House that brought in many national figures in the nuclear industry. The overarching theme was: nuclear energy provides added value that Ohioans should pay for. Nuclear delivers carbon free energy. While, the forum was well attended, few legislators showed up and even fewer of their aides showed.

Why the no shows?

Ohio passed Senate Bill 221 (SB221) in 2007. This legislation mandated that Ohio adopt a “Renewable Portfolio Standard” RPS that forced Ohio’s energy providers to invest in higher cost zero emission wind and solar technologies. The effect was an immediate rise in energy costs that helped to make Ohio’s energy intensive industries, like the steel industry, less competitive worldwide and has only added to Ohio’s economic woes.

The sales pitch in 2007 is the same pitch that grassroots organizers are making now. “The need for higher cost energy to save the planet from global warming.”

That message, however, no longer holds weight with Ohio’s legislature that has a super majority of Republicans in both chambers of its legislature. Many Ohio Republican legislators either do not believe in man-made global warming or do not feel they should destroy the Ohio economy in reducing carbon emissions.

Is there a solution to save Ohio’s nuclear plants besides the proposed ZEN legislation?

There is chatter in the halls of Ohio’s statehouse about potential re-regulation of Ohio’s electrical generation market. Generally, this move away from the free-market is being considered due to former President Obama’s war on coal.

Ohio’s coal plants were built when Ohio’s electricity market was regulated. This regulation guaranteed that energy companies deserved to make a small profit on the energy they produced no matter what new regulation the federal government imposed. Ohio deregulated its markets in the 90’s and as a result there is no longer any guarantee to energy producers of profits and no guarantee that federal regulations won’t destroy any successful business model.

Re-regulation of Ohio’s energy markets would save Ohio’s nuclear energy plants and most likely would cost rate-payers less than the currently proposed ZEN legislation. Re-regulation would also allow a tremendous amount of investment into Ohio’s energy infrastructure. Ohio has not had any significant amount of investment in its energy infrastructure for a long time.

Others do not want to see re-regulation, but instead, want to see tools to allow all energy markets in Ohio to be better managed.

“Mankind quickly realized if you let the entire village hunt the herd, very quickly there would be no herd, and that is why mankind adopted conservation measures to survive” Morrow said.

“The rush toward natural gas should of been better managed, and is very much akin to everyone in the village going out hunting and killing the entire herd,” Morrow added.

Morrow also went on to explain the repercussions of natural gas for the State of Ohio:

“This rush to natural gas has caused a negative price bubble that will most likely burst in five to eight years with greater natural gas exports and present day nuclear technology will become competitive again. Unfortunately, because the rush to natural gas was not well managed, Ohio’s nuclear assets will most likely be decommissioned, never to return. Ohio could correct its mistake now by placing a tax on all the natural gas that is not used within the State of Ohio. The funds from that tax could be used to support Ohio’s nuclear power plant until the free-market corrects itself.”

Still, other environmental groups, would like to see an expansion of SB221 to include all reduced carbon technologies and not just renewable energy technologies. They want to let all technologies compete to produce carbon-free or reduced-carbon energy.

If this were implemented, many of the companies like FirstEnergy, that have to purchase renewable energy from outside of Ohio would then be allowed to meet its mandates using its own nuclear energy produced within Ohio.

Many experts believe that would allow the nuclear plants to be saved, would keep more money inside Ohio, and would not increase any costs to ratepayers, and may even lower costs, while addressing global warming concerns.

It remains to be seen what direction Ohio will go if FirstEnergy keeps it promises. There is very little time for the Ohio legislature to act and to come to some sort of compromise.

It does not look good for the nuclear industry in Ohio but one thing is for certain that if Ohio legislators do not act to correct their blunders and the blunders of the federal government, the entire state may face an economic death spiral due to its energy policies.

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8 Comments »

  1. The US has gone full-blown stupid on the topic of nuclear power. Once we owned this industry, now we are handing it to Russia and China. But full-blown stupid seems to be the flavor of the day in this nation of late.

    Fission is the only practical, clean, reliable power we have to combat climate change. Sadly, mathless and factless people are shoveling money at solar and wind which are both incapable of replacing fossil fuels. But maybe that’s really the goal. Giving lip service to replacing fossil fuels. While pocketing that lobby money.

    Liked by 1 person

  2. The reason nuclear power is in deep doodoo is because of simple economics. But the story is nuanced, if you look at what is good for the public and not what is good for the nuclear plant owners – all of whom have either recovered their investments in these plants ages ago or don’t deserve any further attention because they are economically incompetent.

    In 2012 natural gas became so cheap that it undercut the wholesale price of electricity, which at the time was set by coal. Natural gas is still cheap, but it is double the historical low it hit in March of 2016. There are deep systemic reasons why it isn’t likely to become much cheaper – at least not for any length of time. Natural gas is inherently going to see price volatility no matter what, no matter when.

    But in the years since 2012, wind and solar have become so much cheaper than coal or natural gas. Although wind and solar are subsidized, the subsidy is small and is ending, and when it ends in 2021 or so, wind and solar will both still be about as cheap without the subsidy as they are today with it.

    Efficiency is seldom mentioned, but utility efficiency programs are a cheaper way to provide service than any generation. Efficiency costs about 20% of the retail price of generation.

    If Ohio Republican lawmakers would stop messing around with the original efficiency and renewables standards Ohio would have about 100,000 new jobs, and the price of electricty would be falling.

    Nuclear power is so expensive that the two nuclear plants under construction EACH get more subsidy than the entire wind industry. And they are failing, on the verge of collapse, as their primary supplier just declared bankruptcy.

    Wind and solar don’t have intermittency issues when you have a lot of them. The function of 14,750 wind turbines in states to the West of Ohio (MISO) is pretty much identical to the function of a coal plant. Nuclear, like coal, served us well, and does not do so any longer. The existing plants need to be retired safely, when it makes sense to do so, and sense is dictated by both mechanical safely and economic common sense.

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    • Unfortunately, little of what you have said here is true. Wind and Solar only have an illusion of affordability. When you add in their subsidies they cannot even come close to competing with nuclear or fossil fuels. All that EIA and AWEA propaganda forgets to mention that. Even with subsidies and mandates that wind and solar must be purchased they have had a hard time expanding – so what do righteous environmentalist do? – ratchet up the war on coal and nuclear in a bid to make them more expensive. Wind and solar do have an intermittency issue. With only about a an actual 25% capacity rating in comparison to their nameplate rating to provide constant power they have to transmit it over vast distances. Line loss for such a system is significant. Lead to a loss of about 25% of the power that is produced. With an actual rating of less than 20% efficiency this energy is expensive and not green and it remains to be seen if it even reduces green house gases in Ohio. Natural gas peaker plants are less efficient than combined cycle natural gas plants. The peaker plants that are used to back up wind and solar produce more co2 than combined cycle and nuclear power plants. Ohio would be much further ahead concentrating on nuclear power and natural gas combined cycled plants for cost effectiveness and reliability. Since Ohio adopted the Renewable portfolio standards in 2008 our cost of energy has only risen, from $.09 per kWh to $.13 per kWh. Time to say buh bye to the renewable only culture and allow nuclear to qualify as an equivalent to renewable energy.

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      • Hi Sheila,

        Thanks for looking at my comment. But all anyone needs to do to find out which one of us has a better grip on these issues is look at the rate of new efficiency, wind and solar, and compare it to new coal, nuclear and natural gas plants. Clean energy is far ahead of dirty energy.

        The failing technologies have been pressing that argument about natural gas being required to back up renewables, but that’s not how it works. The variability of a large group of wind or solar plants is about the same as the variability of customer demand, and the two sets of variation merge into a single daily load shape which doesn’t change the requirement for peaking gas.

        The argument you present for rising electricity is false because Ohio’s electric rates have fallen since 2015. There are a lot of other factors. U.S. rates have fallen since 2014, but less than Ohio rates have fallen. I could spend a lot of time talking about reasons for various changes in electric rates, but I’m only interested in challenging false assumptions. Total Ohio RPS costs in 2015 were $42.6 million which is 2.8 tenths of one percent of the $14.9 billion dollars Ohio citizens and businesses spent on electricity that year. The PUCO has not released the 2016 data yet, so this is the most recent information we have.

        More to the point, only about 20% of the wind in Ohio participates in the RPS program at all. Solar for residential and small commercial projects still benefits from the RPS subsidy, but utility scale solar doesn’t need it any more. Both wind and solar are moving to price points where the Federal subsidies no longer matter.

        The Ohio RPS subsidizes solar, biomass, hydropower, and a few odds and ends. Wind gets about 15% of the 2.8 tenths of one percent of our electricity dollars.

        Since the nuclear plants seem to need about $200 million per year, the comparison is simply ridiculous. The fit between renewables and the rest of the grid isn’t an issue, but it is harder to disprove claims to the contrary, unless people realize that wind is providing more than 40% of total generation in Iowa, and larger shares in some other places that don’t have such tidy geographic limits. Iowa is planning to add another 50% to their current wind resource mix. Ohio doesn’t have as good a wind resource as Iowa does, but wind in Ohio doesn’t depend on the subsidies today, and will not need it in the future. The Federal subsidies will end around 2021.

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  3. The answer isn’t in expanding regulation, but in reducing it so as to streamline the nuclear reactor licensing process.

    We could very well utilize modular reactors where one license covers several vessels due to commonality. However, the federal licensing requirements force a unique license per vessel. Imagine if every time Ford made a car, the DOT had to approve THAT car, not just the design, but the car. The building costs would increase tenfold easily.

    Liked by 1 person

    • I agree Mike from what I have learned modular reactors are the future of the nuclear industry. With that being said PJM has done a poor job at managing the grid in setting up the conditions that would put some of the most reliable, safest, and cleanest sources of energy on the grid at risk. It is easy to take this issue out of reality and put it into theory. That is what engineers do. The question is, is Ohio best served shuttering these nuclear power plants. I can say from my research I do not think they are. If you want to keep them open as I do what are your suggestions for a good policy to do so that will not harm our economy? ZEN legislation hurts our economy and our ability to get energy companies to invest in infrastructure in Ohio.

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  4. @Ned Ford or Ted Ford whatever your name really is. The theoretical efficiency of a wind or solar asset is meaningless when it cannot produce power on demand like other forms of energy can. What good is 100% efficiency when the product only runs 23% of the time? And the rest of the time its complementary energy sources are more inefficient than combined cycle natural gas and nuclear.

    Then we have the horrendous downtime of wind for maintenance issues which cannot begin to be compared with nuclear energy. Then their is the efficiency of converting wind and solar into electricity itself is wholly inefficient when compare o other methods of producing electricity.

    Your theory of net aggregation of wind and solar does not stand up to scrutiny when you contend that it can act as baseload power. For those of you that don’t know what this baseload aggregation theory is – It is that if you install enough windmills and solar panels around the state that the wind is always blowing or the sun is always shining somewhere to produce electricity, so theoretically, some contend, we could power our whole state on renewable energy alone. That theory comes up way short because it is not windy enough nor sunny enough in any part of our state at any given time that it could ever produce baseload power, enough for the entire state. In fact wind and solar assets would have to cover many states to provide baseload for just Ohio at an extreme environmental footprint. In addition to that, you would have some days where power made in Cleveland would have to be sent to Cincinnati and vice versa and then a tremendous amount of energy is lost in line loss which makes wind and solar inherently more inefficient than traditional sources of power. Not even mentioning the amount of copper used to transmit that electricity.

    The ultimate price to end consumers of electricity has risen ever since the RPS was put in place despite a record decrease in the price of natural gas. The total cost of energy in Ohio has fallen because we are using less energy as good paying high energy intensive manufacturing like steel production move South or to other countries.

    As far as the RPS cost they have risen more that environmentalist expected them to http://midwestenergynews.com/2017/04/06/report-raises-questions-about-ohio-utilities-renewable-credit-deals/

    And Ohio’s RPS mandates have cost Ohioans in higher Federal taxes and debt through Production Tax Credits so your story of pushing advanced energy is one sided and wholly disingenuous.

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