Amory Lovins Cheers Diablo Destruction Deal

Amory Lovins has once again chosen to publicly display his incredibly creative math skills.

This time he is claiming that closing and destroying Diablo Canyon, a well-run and nicely situated nuclear power plant, 20 to 40 years before it has completed its useful life will reduce CO2 emissions and save money.

His latest example of arithmetic artistry (aka handwaving baloney) is titled His Closing Diablo Canyon Nuclear Plant Will Save Money And Carbon.

Here is a sample quote.

Diablo Canyon enjoys the scale economies of a two-unit plant, is ably staffed, has a large and sophisticated owner, and is running well—rated in the top tier by the Institute of Nuclear Power Operations. Persistent seismic concerns aren’t currently in the foreground. Rather, as PG&E acknowledges, market forces have made California’s last nuclear plant redundant. As customers use electricity more productively, solar roofs generate homebrew power, and competitive renewables flood the wholesale market, Diablo Canyon has become superfluous—and cheaper to close than to run.

Here is another doozy.

Trigger warning: Numerate people, especially those who are schooled in generally accepted accounting practices, might want to ensure that they are sitting down before reading the next paragraph. I do not want to be responsible for making your head spin enough to cause you to lose your footing. End Warning.

Based on these market data, if you close one of the two dozen nuclear plants in the top operating-cost quartile, each MWh it doesn’t generate saves, on average, about $62 in operating cost (more for Diablo). If you reinvest that money—as PG&E proposes to do voluntarily, and as a state utility commission could require—in a $20–30/MWh efficiency or renewable substitute, you’ll get 2–3 MWh of carbon-free replacement for every MWh you saved. You can use one of those MWh to replace the nuclear plant’s function, and the rest to displace fossil-fueled generation. You’ll thus save at least as much carbon as if you’d closed a coal plant—perhaps twice as much.

I’ve already made a comment on Mr. Lovins’s work of creative writing. I’m an efficient (aka lazy) writer who likes to ask his words to do double or triple duty, so here is a copy of that comment.

@Amory Lovins

I listened to the press conference that the parties to the agreement to divide the spoils of closing Diablo Canyon held yesterday.

There are a few fine points that your post does not touch.

1. PG&E’s model for the future cost of operating Diablo Canyon indicated that the cost per kilowatt hour was going to double as a direct result of CURRENT state renewable portfolio energy policies. That was going to happen because the company would be forced to LOWER the amount of power it could produce from the plant in order to meet the state’s requirement of producing 50% of its electricity from qualified renewable energy sources. Capacity factor dropping from current 92% to 50% virtually doubles the price per kilowatt-hour since costs are essentially fixed.

In 2015, PG&E produced about 58% of its power from either qualified renewable, large hydro or nuclear sources, but the new state law is silent about nuclear and large hydro as emission free sources.

2. The agreement DOES NOT specify replacement of Diablo Canyon’s 17,000 GW-hrs/yr of emission-free electricity. It only requires two “tranches” of energy efficiency and renewable energy procurements before 2031 that together total just 4,000 GW-hrs. I know you consider yourself a math wiz, but it takes amazingly creative figuring to say that 4,000 is even remotely close to 17,000. It’s less than 25%!

3. PG&E could not confirm NRDC’s savings estimate. They repeatedly stated that they had no idea what the total cost of the decision was going to be, just that it would be less than continuing to operate Diablo Canyon under a scenario where they had to keep operating less and less each year. Again, that reduced operation has NOTHING to do with plant aging or reliability and EVERYTHING to do with a state law that forces the company to buy unreliables instead of using its own nuclear power.

4. Your summary of Tony Earley’s resume left out one important feature that made him eminently qualified to sign this deal on behalf of PG&E stockholders. He was the Chief Counsel for LILCO when that company negotiated a bailout from the state that protected corporate investors while leaving Long Island ratepayers holding the liability for Shoreham.

Please explain how this situation is supposed to save taxpayers, ratepayers or our common environment. It had better serve as an example for all of the rest of the states to AVOID at all costs.

Rod Adams
Publisher, Atomic Insights

Just in case you’re interested in a different point of view about the agreement between the parties to prematurely close Diablo Canyon while dividing community, employee, ratepayer and taxpayer money amicably I recommend NRDC Announces PG&E Has Agreed To Kill Diablo Canyon.