The EPA has released a 645 page draft document titled Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units for comment. Though several newspaper commentaries about the rule fail to mention the word “nuclear” the EPA draft document includes 76 instances of the word, often in terms of describing it as a zero-emission technology that is part of a proposed “best system of emission reduction … adequately demonstrated.”
The crowd that reads Atomic Insights should be able to develop some useful discussion and commentary here that could then be turned into dozens to hundreds of individual comment submissions. For this discussion, let’s focus on the section currently titled “New and preserved nuclear capacity.”
Aside: That phrase sounds vaguely like “jobs saved or created” that was associated with the American Recovery and Reinvestment Act. End Aside.
40 CFR Part 60
Emission Guidelines for Existing Stationary Sources: Electric
Utility Generating Units
The following extract begins on page 214.
b. New and preserved nuclear capacity
Nuclear generating capacity facilitates CO2 emission reductions at fossil fuel-fired EGUs [electricity generating units] by providing carbon-free generation that can replace generation at those EGUs. Because of their relatively low variable operating costs, nuclear EGUs that are available to operate typically are dispatched before fossil fuel-fired EGUs. Increasing the amount of nuclear capacity relative to the amount that would otherwise be available to operate is therefore a technically viable approach to support reducing CO2 emissions from affected fossil fuel-fired EGUs.
1. Proposed quantification of nuclear generation
One way to increase the amount of available nuclear capacity is to build new nuclear EGUs. However, in addition to having low variable operating costs, nuclear generating capacity is also relatively expensive to build compared to other types of generating capacity, and little new nuclear capacity has been constructed in the U.S. in recent years; instead, most recent generating capacity additions have consisted of NGCC or renewable capacity. Nevertheless, five nuclear EGUs at three plants are currently under construction: Watts Bar 2 in Tennessee, Vogtle 3-4 in Georgia, and Summer 2-3 in South Carolina. The EPA believes that since the decisions to construct these units were made prior to this proposal, it is reasonable to view the incremental cost associated with the CO2 emission reductions available from completion of these units as zero for purposes of setting states’ CO2 reduction goals (although EPA acknowledges that the planning for those units likely included consideration of the possibility of future regulation of CO2 emissions from EGUs). Completion of these units therefore represents an opportunity to reduce CO2 emissions from affected fossil fuel-fired EGUs at a very reasonable cost. For this reason, we are proposing that the emission reductions achievable at affected sources based on the generation provided at the identified nuclear units currently under construction should be factored into the state goals for the respective states where these new units are located. However, the EPA also realizes that reflecting completion of these units in the goals has a significant impact on the calculated goals for the states in which these units are located. If one or more of the units were not completed as projected, that could have a significant impact on the state’s ability to meet the goal. We therefore take comment on whether it is appropriate to reflect completion of these units in the state goals and on alternative ways of considering these units when setting state goals.
Another way to increase the amount of available nuclear capacity is to preserve existing nuclear EGUs that might otherwise be retired. The EPA is aware of six nuclear EGUs at five plants that have retired or whose retirements have been announced since 2012: San Onofre Units 2-3 in California, Crystal River 3 in Florida, Kewaunee in Wisconsin, Vermont Yankee in Vermont, and Oyster Creek in New Jersey. While each retirement decision is based on the unique circumstances of that individual unit, the EPA recognizes that a host of factors — increasing fixed operation and maintenance costs, relatively low wholesale electricity prices, and additional capital investment associated with ensuring plant security and emergency preparedness
[Editor Note: No mention of new EPA rules associated with Cooling Water Intakes (316b)?]
— have altered the outlook for the U.S. nuclear fleet in recent years. Reflecting similar concern for these challenges, EIA in its most recent Annual Energy Outlook has projected an additional 5.7 GW of capacity reductions to the nuclear fleet. EIA describes the projected capacity reductions — which are not tied to the projected retirement of any specific unit — as necessary to recognize the “continued economic challenges” faced by the higher-cost nuclear units. (166) Likewise, without making any judgment about the likelihood that any individual EGU will retire, we view this 5.7 GW, which comprises an approximately six percent share of nuclear capacity, as a reasonable proxy for the amount of nuclear capacity at risk of retirement.
2. Cost of CO2 emission reductions from nuclear generation
We have determined that, based on available information regarding the cost and performance of the nuclear fleet, preserving the operation of at-risk nuclear capacity would likely be capable of achieving CO2 reductions from affected EGUs at a reasonable cost. For example, retaining the estimated six percent of nuclear capacity that is at risk for retirement could support avoiding 200 to 300 million metric tons of CO2 over an initial compliance phase-in period of ten years.(167) According to a recent report, nuclear units may be experiencing up to a $6/MWh shortfall in covering their operating costs with electricity sales.(168) Assuming that such a revenue shortfall is representative of the incentive to retire at-risk nuclear capacity, one can estimate the value of offsetting the revenue loss at these at-risk nuclear units to be approximately $12 to $17 per metric ton of CO2. EPA views this cost as reasonable. We therefore propose that the emission reductions supported by retaining in operation six percent of each state’s historical nuclear capacity should be factored into the state goals for the respective states.(169)
For purposes of goal computation, generation from under-construction and preserved nuclear capacity is based on an estimated 90 percent average utilization rate for U.S. nuclear units, consistent with long-term average annual utilization rates observed across the nuclear fleet. The methodology for taking this generation into account for purposes of setting state emission rate goals is described below in Section VII on state goals and in the Goal Computation TSD. We invite comment on all aspects of the approach discussed above. In addition, we specifically request comment on whether we should include in the state goals an estimated amount of additional nuclear capacity whose construction is sufficiently likely to merit evaluation for potential inclusion in the goal-setting computation. If so, how should we do so — for example, according to EGU owners’ announcements, the issuance of permits, projections of new construction by EPA or another government agency, or commercial projections? What specific data sources should we consider for those permits or projections?
(166) Jeffrey Jones and Michael Leff, EIA, “Implications of accelerated power plant retirements,” (April 2014).
(167) Assuming replacement power for at-risk nuclear capacity is sourced from new NGCC capacity at 800 lbs/MWh or the power system at 1127 lbs CO2/MWh (average 2020 power sector emissions intensity as projected in EPA’s IPM Base Case).
(168) “Nuclear… The Middle Age Dilemma?” Eggers, et al., Credit Suisse, February 2013
(169) A state’s historical nuclear fleet is defined as all units in commercial operation as of May 2014 with no current plans to retire.
The above quote runs through the middle of page 219 of 645.
Once again, the request is for Atomic Insights readers to review the above section and provide comments, especially in the areas where the EPA specifically requests comments. By conversing here, each contributor should be able to develop better arguments that can then be submitted as part of the national discussion process.
These proposed rules are important. Their wording should not be ceded to people who have less information and less regard for their long-term effects.