1. I feel that Demand Response has much more of an effect than the “smoking gun” you are looking for.

    Try this link – http://powersource.post-gazette.com/powersource/policy-powersource/2014/11/25/FirstEnergy-says-demand-response-putting-powerplants-out-of-business/stories/201411250013
    Don’t understand the whole problem, but seems this is causing even more plants to shut down and be replaced with cheap (NOW) gas.

    In areas with more solar there is going to be an even bigger perturbation to the market. For, example, in California, the installed solar panels greatly affects the peak demand, but is not reliable! You expect and predict a certain demand on a certain day, data shows that solar will (on average ) reduce that demand by 25% – thus you no longer need an ancient coal plant that needs extensive upgrading to meet Obama’s new regulations. So what happens when the sun does not shine for that day, week? You build more GAS plants, and end up with demand rates like those in NE in the winter and gas prices 10 – 100 times higher.

  2. @Rod

    fracing-related –> fracking-related

    I note that at least three northeast nuclear plants (Ginna, Fitzpatrick, Pilgrim) are in financial trouble because of low
    regional electricity prices. Do you have any insights as to whether the operators of these plants believe they can “hold-out” for about two years while waiting for Dominion’s Cove Point LNG export facility to be completed? Or whether UBS’s analysis even considers this possibility. Is two years too long a time horizon for such economic considerations? I’m assuming that the Pennsylvania’s Marcellus gas will eventually find its way to Maryland.

  3. In New England and elsewhere there has been a steady reduction of coal fired electricity production with a demonstrable increase in electrical output fueled from natural gas fired units. Not to harp on the need for fuel diversity, but when you have the likes of the head of ISO New England continue to display charts early on, in briefings after briefings, showing the dramatic shifts in generation by fuel sources over the last 15 years, along with natural gas impacts and electricity wholesale pricing, one should get the picture (see http://www.iso-ne.com/static-assets/documents/2015/07/ieee_pes_general_meeting_van_welie_slides_07282015_final.pdf).
    Any loss of another nuclear generating station in that region will have dramatic effects on fuel diversity and reliability. New England can’t simply make up the difference with wishful thinking or renewables. There are serious concerns over natural gas availability, transmission and pricing in the region going forward, especially during cold weather months, where earlier this year generators actually had to resort to filling the gaps by shifting to oil fueled sources. A sad reflection of old times, where during the 1970’s, New England relied upon oil to produce 70% of the region’s electricity prompting the move to planning more nuclear plants to help offset the reliance on foreign oil and imports of other fuels into the region.

  4. Out of curiosity, roughly how much gas would be required to generate enough electricity to replace five large nuclear reactors for a day? How does this amount compare to the total amount of gas produced in the US per day? Is it material? My guess is that this ratio is so small that shutting the plants down would have no effect on the price of gas.

    That said, there is probably no other CO2 emission reduction strategy that comes even close to being as cost effective as just subsidizing these plants to keep them in operation. Shutting them down would be a major setback to the goal of reducing carbon emissions.

    1. @Jeffrey;

      Back of the envelope calculations imply it would be small (I think less than 1%), but it becomes a problem of availability; if the NG pipelines in the area are already at max capacity and new demand comes online, then price negotiating starts. Even if there is plenty of gas in the country at large, it still has to get to the customer, which means pre-existing buyers get priced out by the new demand, or new pipelines are built, but I think we both know how expensive and time consuming it can be to get a cross-country system built in the United States.

    2. I had a similar idea, so I did this:

      1000 MWe * 24 * 365 * 0.90 * 1000 ~ 8 billion kW-hr per year for a 1000 MW nuclear plant

      A modern gas-fired unit runs at a heat rate of ~ 7500 Btu/kW-hr, so

      8E9 kW-hr/yr * 7500 Btu/kW-hr = 60 million MMBtu/yr gas requirement to replace the 1000 MW plant

      I don’t have any idea what the total gas production or projected flow thru the Constitution Pipeline would be.

      1. @gmax137

        Excellent start. The units that the US Energy Information Agency uses to track natural gas production and consumption on a commercial scale are normally variations on cubic feet. They can be confusing.

        Mcf – 1000 cubic feet with the meaning of M coming from its meaning in Roman numerals. An Mcf contains approximately 1,000,000 BTU (MMBTU) In that case the meaning of the Ms is also derived from Roman numerals.

        Bcf – Billion cubic feet. One million Mcf.

        Tcf – Trillion cubic feet. One thousand Bcf.

        Another archaic unit that often seems designed to confuse people who are not in the business is the “therm.” It is defined as 100,000 BTU, so 10 therms is roughly equal to an Mcf and exactly equal to 1 MMBTU. The gas industry uses deca (or deka), a metric system prefix, to multiply a base unit by 10, so you occasionally come across decatherm (dt). That’s the case for the announcement I found about the Constitution Pipeline capacity, which reports it as approximately 650,000 decatherms (dt) per day.

        650,000 dt x 1 MMBTU/dt x 365 days/year =~ 240 million MMBTU/year.

        Feeding the natural gas power required to replace a single 1000 MWe nuclear plant would require almost exactly 25% of the total capacity of the new pipeline.

        1. Also need to add in the cost of transportation (pumping) of that NG and the fact that with no NPP the demand is going to be very high on very cold/hot days with the addition of more NG power plants. Price will un-necessarily skyrocket during these periods of high demand, increasing BOTH the cost of electricity and Heating gas.

  5. Unfortunately, it is a fact of American business today that policy is often dictated to corporate boards by hedge-fund managers & other “activist investors” who do not have the good of the company or the public at heart, nor any long-term stake, but simply wish to make a quick buck — off the collapse of the company, if that’s the easiest thing to engineer.

    Consider the case of “California Resources Corporation”. Under heavy pressure, the management of Occidental Petroleum spun off their underperforming California operations. The new company was required to borrow several billion dollars to pay a “Special Dividend” to OXY shareholders, & the bonds were cleverly packaged for sale as apparently good-quality securities. As you might guess, CRC has been repeatedly downgraded by the credit agencies, & there’s little question that everyone who bought their debt is going to take a bath, while the middlemen who handled the transaction make out very nicely.

    1. @publius

      Unfortunately, it is a fact of American business today that policy is often dictated to corporate boards by hedge-fund managers & other “activist investors”

      It may be true today, but that does not make it unimpeachably true forever. Little understood fact is that “hedge-funds” are often playing with “our” money from mutual funds or pension investments. We can resist and overthrow their misuse of our money in damaging ways.

      It’s not intuitive, but one of the most important steps forward is to gradually, but steadily, return interest rates to their historical position of giving some income to savers while charging borrowers for the privilege of using someone else’s money. We shouldn’t have to go through vultures in order to appear to be getting some return on saved capital.

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