Once-powerful nuclear industry starts to sputter out

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The closing of Vermont’s only nuclear power plant is the latest challenge to an industry struggling to retain its niche in America’s long-term energy future.

The Vermont Yankee facility, owned and operated by Louisiana-based energy firm Entergy Corp., is one of at least five reactors to be slated for closure in the past 12 months.

PHOTOS: Nuclear power industry starts to sputter out

Several factors have combined to create what some see as a bleak future for the sector.

“This is not an isolated incident,” said Frank Felder, director of the Center for Energy, Economic and Environmental Policy at Rutgers University. “Electricity prices are low. The costs of running the plants are high.”

Much like coal, nuclear power — once heralded as the future of U.S. energy and still touted by President Obama as part of his “all of the above” strategy to reduce dependence on foreign fuel — now is fighting to compete with natural gas prices near record lows.

The rise of hydraulic fracturing, a process commonly known as fracking, has revitalized American natural gas production. The dramatic rise in supply has pushed down prices in recent years and made gas increasingly appealing from a cost perspective.

The uptick in drilling has coincided with a drop in overall demand for electricity, analysts say, a one-two punch that may begin to elbow nuclear out of the mix.

Meanwhile, events such as the disaster at Japan’s Fukushima Dai-ichi facility have renewed questions about the overall safety of nuclear power and led some nations, such as Germany, to begin transitioning away from nuclear energy.

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But with the Obama administration bent on reducing U.S. carbon emissions, nuclear power would seem on the surface to be a worthwhile investment. In terms of carbon emissions, nuclear plants are cleaner than natural gas facilities and are much more “green” than their coal counterparts.

Despite that, the bulk of federal clean-energy investments continue to flow to solar, wind, biofuels and other alternatives.

“Nuclear is not as sexy,” said Eileen Supko, principal at Energy Resources International Inc., a leading energy consulting company.

In fact, many of those advocating a transition to a low- or no-carbon future see a diminished — or nonexistent — role for nuclear power generation.

“This is the right decision for Vermont as we move to a greener energy future. Entergy’s announcement today confirms what we have known for some time. Operating and maintaining this aging nuclear facility is too expensive in today’s world,” Vermont Gov. Peter Shumlin, a Democrat, said after Entergy announced the Vermont Yankee closure last week. “Vermont has made clear its desire to move toward more sustainable, renewable sources of electricity, and many of our surrounding states are doing likewise.”

In explaining its decision, Entergy cited a “natural gas market that has undergone a transformational shift in supply due to the impacts of shale gas.”

The company also pointed to the high costs of maintaining the single-reactor Vermont Yankee facility, having spent more than $400 million on the plant in the past decade.

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