PG&E Agreed To Kill Diablo Canyon In Self-Protecting Deal
The first indication I had of the agreement to destroy Diablo Canyon in the prime of its life came from a press release issued by the Natural Resources Defense Council (NRDC). It stated that they had signed a deal with PG&E, IBEW local 1245, the Coalition of California Utility Employees, Friends of the Earth, Environment California, and the Alliance for Nuclear Responsibility.
There is an implied quid pro quo. The groups will support PG&E’s request for an extension from the California Lands Commission of its land use permit that allows access to ocean cooling water at the Commission’s June 28 meeting. In return, PG&E will agree to withdraw its 20-year license extension application at the Nuclear Regulatory Commission. Instead, it will aim to retire the two-unit site when its current licenses expire in 2024 and 2025.
The press release claims that the electricity produced by the plant will be replaced with a combination of wind, solar, and “energy efficiency.”
“Energy efficiency and clean renewable energy from the wind and sun can replace aging nuclear plants — and this proves it. The key is taking the time to plan. Nuclear power versus fossil fuels is a false choice based on yesterday’s options,” said NRDC President Rhea Suh.
That’s a deceptive fig leaf; it is physically impossible for wind, solar and energy efficiency to replace the steady production of a nuclear power plant. Producing the same total number of kilowatt-hours each year is not the same as producing the same kilowatt-hours on a minute by minute, hour by hour or day by day basis.
Electricity is a product that most efficiently produced at the instant that it is used. It is possible to store a small amount, but both the act of storing power and getting power out of its storage system result in a substantial, unrecoverable loss of energy. Round trip efficiency is often less than 50% and rarely better than 80%.
Even if enough wind, solar and energy efficiency projects are started and come on line in California before 2025 to produce an additional 17-18 billion kilowatt-hours per year over what is already in place and planned, any logical, disinterested observer should wonder why the huge sums and enormous physical effort that would be invested in those new projects will end up being devoted to treading water in terms of CO2 emissions.
If there is the potential to add that much capacity, why not use it to close dirtier facilities? As of 2014, 45% of California’s electricity came from either burning natural gas in state or from importing coal fired electricity from out of state.
It’s worth noting that as of 2014, all of the wind and solar infrastructure that has been erected in California since the 1970s managed to produce a total of 23 billion kilowatt-hours, which is only 30% more than what the single Diablo Canyon power plant produced during the same year.
Ralph Cavanagh, the Executive Director of the NRDC, attempted to explain why his organization preferred to replace the emission free output of Diablo Canyon over replacing the much dirtier forms of power generation.
“Giant baseload nuclear power plants like Diablo Canyon cannot easily be taken offline or ramped up and down as system needs change, which obstructs the integration of renewable resources with variable output into the electricity grid. This worsening problem is forcing the California grid operator to shut down low-cost renewable generation that could otherwise be used productively.”
Apparently, NRDC prefers to make room for unreliable power generators and to support the marketing efforts of companies that sell wind turbines and solar panels even in situations where they risk destabilizing the grid and forcing reliable generators into uneconomic and energy inefficient modes of operation.
The kinds of natural gas power plants that can rapidly ramp up and down are not the highly efficient natural gas plants that produce 40% of the CO2 produced by coal. They are inefficient, simple cycle plants that produce closer to 60% of the CO2 produced by a modern coal plant. Ramping them up and down is a bit like stop and start driving; it consumes more fuel per useful unit of power. It also increases wear and adds to maintenance costs.
I contacted Heather Matteson, one of the founders of Mothers For Nuclear, a group that has been furiously organizing people that recognize Diablo Canyon’s value as a safe, well-run, emission-free power source that has many decades worth of useful life left in it. Here is her reaction to the announcement.
This is what we expected. We received a company wide announcement this morning that we won’t relicense. The timing is strategic for them, which is also fine.
This is a wake up call for the state. We will use it to drive home the seriousness of this issue for our energy future.
A close read of the deal makes is abundantly clear why PG&E agreed to sign it. If the deal, as signed, is approved by the California Public Utility Commission, PG&E will end up in a no-lose situation. They will be allowed to operate Diablo Canyon until its full cost has been recovered and all available depreciation deductions have been claimed.
In order to maintain electricity deliveries over its monopoly transmission and distribution network, PG&E will receive full cost recovery plus its normally allowed profit margins on all purchased power or “energy efficiency” investments. The deal proposal provides a rate base treatment that is described as a “non-bypassable” fair share of the cost for all grid-connected customers.
This is an important topic of conversation as people recognize the potential impact of allowing a small group of financially motivated parties to implement an agreement with such widespread impacts on the rest of the residents of a large, heavily-populated, economically-active, environmentally-concerned state populated with a substantial number of prosperous, mobile people who are fascinated by electric automobiles.
A version of the above article was published under the headline of NRDC Announces PG&E Has Agreed To Kill Diablo Canyon. It is reprinted here with permission.
The absence of Elton Musk and his dreams of an electric car fleet supporting nuclear to juice them up but instead in favor of solar power is another glaring celeb blow to legitimize nuclear to the greater unwashed.
The responsibility belongs with the people of California. If they are left with rolling blackouts that’ s the price they pay for their environmental extremism. What will most likely happen is when things get bad enough low cost gas burning turbines will be put in as a stop gap possibly payed for by the American taxpayer. What I hope will take place by 2025 is a federal government freed from the grip of leftist degrowthers will take over control of these existing nuclear plants and operate them as a quasi-government corporation.
It should be a quasi-government entity like TVA or BPA. This should only include plants that are no longer wanted by their present owners. The existing staff can be kept in place. Monies from sale of power should be first directed towards paying the bills, and any excess set aside for infrastructure enhancements. It is a last-resort measure to keep this valuable infrastructure in place and functional. These facilities are too valuable to throw away. Think of the billions of dollars and billions of man-hours it has taken to construct them. They have many decades of life left and it makes no sense from a national policy viewpoint to throw them away. Keeping existing zero-emissions plants in operation is the cheapest and most reliable manner of attaining carbon reduction goals.
The alternative to “leftist degrowthers” in the USA appears to be the “government can’t do anything good” party. Neither of these is going to embark on an infrastructure preserving or expansion effort.
However, both do play well for the wealthy powers in the country who don’t want a strong government protecting the diffuse intersts of the wage earners and who don’t want to pay their proportionate by wealth share of the costs to run and maintain a first world civilization.
Self protection and profit for the privately owned at the expense of the planet and the planet’s greedy inhabitants. Another reason nukes need government intervention.
@Rick Maltese
Greedy behavior by established monopoly utilities does need government intervention, but not government ownership or subsidies. Instead, the government by the people, for the people ought to reestablish the model that was proven to work well for many decades. Vertically integrated, rate regulated utility companies with an obligation to serve all customers with reliable, affordable, high quality [a term that includes meeting emission standards] electricity deserve to have monopoly service territories.
They should be overseen by competent public utility commissions that understand the need to produce a reliable return on investment and the need to meet high standards. They should both allow and expect the regulated companies to invest in integrated resource planning and long range thinking.
It’s a tradeoff among competing interests with checks and balances. It resulted in the creation of one of the most reliable electricity infrastructures in the world. Then along came the “smartest guys in the room” at Enron. Fortunately, I live in a part of the country that didn’t buy into the snake oil sales pitch. We’ve retained our vertically integrated monopoly utility. Unfortunately, it is owned by a holding company that extracts too much of its revenue for distracting investments like the Cove Point LNG terminal conversion.
That project is structured to be an almost sure thing as long as construction is completed, even if the terminal then sits unused because US gas prices go up too much to be competitive in the global market. (Long story.)
Once that project has been completed, management attention and financial capacity should be freed to make the final investment decision for North Anna 3.
The vertically integrated regulated model might be an alternative to government takeover in those regions willing to go back to it, unless it is imposed by federal mandate. If it isn’t, and there are places that want to retain the unfair and chaotic “free market” in the utility business (e.g., New England), then we’ll still be losing existing nuclear plants to massively-subsidized unreliables. And even in the vertically integrated and regulated regions, there may be companies unwilling to keep nuclear plants running, for whatever reasons I know not. Look at Entergy and the Fitzpatrick fiasco. Entergy seems to have the “don’t take yes for an answer” mindset.
While I certainly agree the Enron debacle contributed to the current problems the nuke utilities in deregulated markets face today (along with political pressure forcing the use of more wind and solar), you had to sleep through the ’80s and ’90s to not realize the traditional “Vertically integrated, rate regulated utility companies” model had disintegrated before Enron.
Just look at the history of cancellations and abandoned projects, and lack of new license applications during that time frame. And don’t blame it on lack of load growth, as plant up-rates occurred during that time.
Would you buy a particular car model if the historical evidence showed that an external agency with dictatorial power (NRC) could come along at any time during the life of the car and raise the price of your car (by moving the original paid-for Design Basis)? I think not.
If you do, just how are you going to “…expect the regulated companies to invest in integrated resource planning and long range thinking.”?
The answer is THEY CAN’T. So the old traditional vertically integrated utility long-range planning model is unraveled. When huge capital investment costs can come at anytime “out-of-the-blue” exactly how would one do long-range economic planning?
So what happened to cause the model to disintegrate just before the ’80s? If you can think of something, maybe the reaction to it did not address the Root Cause?
@mjd
Thank you for reminding me. The vertically integrated utility model also depends on sensible regulation of nuclear energy, which is NOT what we have under the iron pyrite standard of the Nuclear Regulatory Commission.
Of course, regulation of nuclear energy has NEVER yet been sensible. Some pine for the “good old days” of the AEC without recalling that it was just as bad about moving the goal posts. A lot of those project cancellations were a result of huge changes in requirements well after the start of construction.
Unfortunately no one’s formally declared climate change an impending global catastrophe to warrant legal takeovers of nukes. Of course when the world actually sees the headlights of the approaching train they might get more frantically aggressive by outright commandeering all nukes while hastily shutting down fossils, but it’d likely be too late to reverse by that time.
Although he was gone by the time the closure of SONGS was announced, Edison International CEO John Bryson was an attorney for the NRDC.
Rod – Why are some of the posts without an option to comment?
@FermiAged
Rod – Why are some of the posts without an option to comment?
Short version: Operator oversight.
I don’t want to default to comments. That means that I need to click on a selection box “Allow comments” for each post. Sometimes, I forget, especially when posting at times when most of the people in my time zone are fast asleep.
Use your Human Performance Tools. An INPO SOER will be issued shortly. The NRC will also dispatch an Augmented Inspection Team.
Touche’, FermiAged
It’s obvious Rod isn’t following his procedures or said procedures need revisions to prevent such an accident.
Rod, make sure you use circle/slash for placekeeping or INPO will issue you an AFI (area for improvement)
Rod, another important factor, worthy of comment, is the effect of the new federal energy policy related to clean air credits. Existing nuclear gets zero whole new natural gas plants do. Given the ongoing legal battles and the impending billion dollars necessary to relicence, utilities reap a windfall in clean air credits for shutting down nuclear plants and building new gas plants that produce (per this article) 60% of what coal produces. This administration has had to list the boat so far to kill nuclear, it is in peril of capsizing. I continue to be amazed that anyone can paint this president as pro-nuclear. He may be in word, but certainly not in deed.
Or his “science” advisor is lieing to him….
Well put article.
Well, California, remember the words of Colin Powell, “if you break it, you own it.”
Wonder what the reaction will be down the road…
Rod,
Have you considered placing the “This article originally appeared (usually on Forbes now, or Fuel Cycle Week” note at the top of the posts? Now that you are regularly posting on Forbes, I generally have already read the posts there before your waiting period to cross-post them here.
Small thing, but it might save me a small portion of time rather than realizing a quarter or third of the way into a post that “this sounds really familiar, like I’ve read it before”.
Thanks,
EntrepreNuke
@EntrepreNuke
I thought about that, but search engines often skim from the beginning of an article. Disclaimers, corrections, author blurbs and credits are traditionally at the end of articles.
No problem. I can easily make the change to start taking an initial glance at the end of the posts on here. I really liked today’s post in Forbes, and hate that so many people would be prone to dismiss it out of hand.
http://www.forbes.com/sites/rodadams/2016/07/01/can-ct-scans-alleviate-symptoms-of-alzheimers-disease/#10a061494e4e
Part of me wishes you had included a shout out of some sort for Pat Summitt (and also benefitted from any associated future clicks), while another part of me is slightly glad that you didn’t. Either way, I will say “Go Lady Vols!” in Pat’s Memory.
Interesting that the deal hinges on CPUC approval. If the CPUC is truly watching out for ratepayers, they can torpedo the whole thing.
@Cpragman
Interesting that the deal hinges on CPUC approval. If the CPUC is truly watching out for ratepayers, they can torpedo the whole thing.
I would change “can” to “must”. I’m pretty sure they have a legal responsibility that should be enforced while the plant is still operating.
The strategic blunder made by the groups who desperately want to force Diablo Canyon to stop producing its 17,000 GWh/yr of emission-free electricity off the grid was giving us enough of a head start to tie them up in legal knots. That is in addition to seizing control of as many bullhorns as we can find to highlight the hypocrisy of claiming “we’re all gonna die” from both global climate change and using emission-free modern nuclear energy-releasing systems.
It’s funny how it seems that the media is excessively mentioning that the Juno Jupiter probe is “solar powered” far far more than they ever mentioned that Cassini or Galileo or Far Horizons were nukes as though it’s a great thing for humanity. They “overlook” that mags like Space World featured many engineers ruing how going solar with a deep space probe whittled down the number and power of science packages going aboard. At the Rose Planetarium here they post that Saturn follow-ups likely being solar and that future ion engines use solar wings and ditch RTGs and reactors as NASA tries to appear green and friendly to unwashed taxpayers at the expense of good science by weaning off Evil plutonium. Even NASA spooked silly by the antis.
James Greenidge
Queens NY
Rod, I see you bringing up the facts that round-trip conversion losses for storage must be take into account. However, from my knowledge, the bigger problem that is rarely talked about is the end-to-end analysis of EROEI. Just for example, using highly optimistic numbers for solar, specifically optimistic numbers for poly-crystal silicon, and using optimistic numbers for lead acid batteries, I’ve calculated a buffered EROEI of around 2, which is not enough to run an industrial economy. As I’m sure you know, it’s not something that can be fixed by overbuilding, or throwing more money at it. It’s a fundamental thermodynamic limitation that can only be fixed by finding an energy storage technology that is energetically cheap to build, and it seems to be highly unlikely that we’ll find such a thing. I’m wondering why you don’t talk about this issue more often, because this seems to be the biggest obstacle by far to solar and wind fantasies.
@John Smith
Thank you for joining the conversation.
I don’t talk much about the details of Energy Returned on Energy Invested, though I’m happy to host comments from others who have gone to the trouble of doing the math. My method of handling the issue is simply ask people to provide me with a single example of a solar panel manufacturing facility or a wind turbine factory that is powered by just the wind and the sun. If they cannot even power that small portion of the supply chain for their own product, how can anyone believe that they are a sustainable energy source for society?
Thanks for your reply! Sensible enough, but I’ll continue to personally cite EROEI arguments more forcefully.
Rod, in case you have not seen he latest, the No Nukes have not stopped just because PG&E caved. A group is now trying to petition to shutdown the Columbia plant at Hanford, and even less understood is they are based in Portland, OR, and wanting to petition in Washington
@D. Dlomerfelt
I suspect that the No Nukes will never cave, especially when they are being appeased by companies like PG&E. They must be soundly opposed and defeated as often as possible.
Their current strength must not be underestimated, but their weaknesses must also not be overlooked.