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Who Told Vermont To Be Stupid?

Vermont Yankee Nuclear Power Station. Source - NEI

In a week when we celebrated one of the greatest speeches in history, we also saw discrimination win over science.  Again.  Ideology defeated reason.  As a scientist, I was saddened in a way I am not usually wont.

The Great State of Vermont threw away cheap clean energy this week out of ignorance and fear. Vermont chose to be stupid, and will hurt the environment as a sidebar.

Earlier this week, Entergy Corporation announced plans to close and decommission its Vermont Yankee Nuclear Power Plant in Vernon, Vermont. The power station was producing 0ver 70% of the State’s power, carbon-free. I guess we don’t have to envy Vermonters anymore.

The station will stop power production after its present nuclear fuel runs its course and move to safe shutdown at the end of 2014. The station will remain under the oversight of the Nuclear Regulatory Commission throughout the decommissioning process and for the decades following until final disposition of its waste, and the building itself, is finalized.

The official reason given by Entergy Entergy was a combination of financial factors including:

- abundant low-cost natural gas from fracking,

- financial investments required by an increasingly onerous regulatory environment brought on by unfounded fears from the Fukushima disaster even in the face of a stellar safety record and a completely different safety case, and

- wholesale market design flaws that maintain artificially low energy and capacity prices in the region, and actively suppress the benefits of the lowest costing energy that merchant nuclear and hydroelectric plants have long provided the people of Vermont (Marv Fertel, NEI).

But we all know the real reason. Nasty politics and ignorance. The latter is forgivable and rectifiable with a little homework. The former is not. Dr. Art Woolf, Professor of Economics at University of Vermont, put it best in the BurlingtonFreePress

“The current [upward] trajectory of electricity prices is likely to continue as Vermont mandates production from much more expensive renewables and provides a variety of subsidies to producers of renewable energy. Electricity from wind can cost up to 20 cents per kilowatt hour and solar between 20 and 30 cents. Compare that to the current wholesale price of electricity from Hydro-Quebec, which costs about six cents per kilowatt hour [similarly for natural gas]. Vermont recently decided not to purchase electricity from the Vermont Yankee nuclear plant, which was selling electricity to the state for less than five cents a kilowatt hour” (Electricity Prices in Vt Among Nation’s Highest).

Vermonters should only be paying 8¢/kWhr, not the 18¢/kWhr they’re paying now, nor the 20¢/kWhr they’ll be paying in the next few years.

These upside-down cost situations occur because what we pay for electricity has little to do with what it costs to produce it. The real costs of producing electricity such as construction, fuel, O&M, decommissioning, have little to do with what its price on the wholesale market. The price has more to do with financing, tax credits, subsidies, mandates, power purchase agreements, weekly power bidding, and other non-technical drivers. These determine the price in a virtual orgy of artifice and short-term profit arrangements, spiced up with a bit of political shenanigans. (An excellent discussion of this is given by Michael Overturf of ZF Energy Development in The Price for Power.)

This situation resulted directly from many years of very effective and concerted lobbying to bias elected officials in Vermont against nuclear energy. The public let them. Entergy was not prepared to counter this anti-nuclear push. They even seemed oblivious to its magnitude and effect, and bumbled communications and response. Or maybe they just got tired and resigned to letting Vermont get what it deserves.

You know, folks, I understand nasty politics, but there is only one reason for being ignorant.  Not doing your homework. I’m a scientists and even I don’t like to do homework.  But you need to do your homework.

Most Vermonters were led blindly into throwing away the cheapest, cleanest energy available. Energy that made Vermont one of the lowest carbon emitters per capita in the world, a feat that will no longer be possible. Vermont Yankee is already mostly paid for, it had 20 years left, and mothballing it won’t save any money for the State, or reduce the risks that much either. The best thing to do with a nuclear power plant is to run it. Mothballing an active reactor ahead of its time is a wicked expensive waste.

Vermont Yankee has produced almost 200 billion kWhrs since it began operations. If this energy had been produced by coal or gas, over 50 million tons of carbon, sulfur and nitrogen would have been emitted into our atmosphere. But Vermonters were smart and ahead of their time. Vermont Yankee contributes about $500 million to the local economy employing 600 highly skilled professionals and funding the 1,800 indirect jobs associated with them. This closure will be a huge blow to the local economy. Does this matter to anyone?

While about 30% of Vermont’s electricity comes from hydro and methane digesters, without nuclear power the State’s GHG emissions will increase, especially as natural gas use for power generation is increasing faster than any other source.

Better yet, ISO New England Inc., the Regional Transmission Organization (RTO), is rushing to fill this new electricity shortage with oil and gas. 2.3 billion kilowatt-hours of new oil-fired generation will dump 1.6 million metric tons of CO2 into the air, and 4.1 million more tons will be emitted by increased gas-fired production, just to compensate for this unnecessary execution.

As a member of the Regional Greenhouse Gas Initiative (RGGI), how will Vermont square this huge increase with other members?

Closing Vermont Yankee in the end will cost Vermonters about $200 million per year for the next 20 years. But Vermonters escaped the worst of that other “wholesale market flaw”, the default credit swap and other financing ideologies, and haven’t been hurt at all by the economic slump of the last few years, so the people of Vermont won’t even notice the lost $200 million. I mean it’s not like it’s 10% of their total State tax revenue or anything.

Now when children ask, “Why do I have to do my homework?” parents can point to Vermont on the map and say, “That’s why!”

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  • michael blom michael blom 1 year ago

    Of course, it could never happen here.
    Funny how free market types love socialized nuclear power, which would not exist without massive government subsidy, and special protection (Price -Anderson). No private money would finance, no private insurer would underwrite, without the central planners picking this industry.
    Fukushima will never happen again, only the next thing we can’t imagine will happen again. Guaranteed.

  • James Conca James Conca, Contributor 1 year ago

    That’s nonsense, there’s nothing more socialized than renewable mandates, but neither one is socialized. There’s so much less subsiy for nuclear than anything other source. That Vermont Yankee is a similar design to Fukushima is irrelevant. Fukushima did not fail from the huge earthquake, bigger than anything possible in Vermont. Fukushima failed because the biggest tsunami in history took out the back-up generators, because they failed to heed our warnings over the last two decades to upgrade the wall, reroute hydrogen, and train to replace the diesel generators with back-ups on hand, if necessary.

  • Dr. Conca,

    The only reason the civilian nuclear energy industry exists today is because of US government subsidies. The Department of Energy is largely a nuclear power subsidy. Beyond that, there are other nuclear related functions of DOE such nuclear weapons, naval reactors, commercial reactors, and research and development. In FY 2012 DOE’s National Nuclear Security Administration is authorized to spend near 12 BUSD. Civilian nuclear costs including “environmental management”, “Legacy Management”, and other costs are are 7.1 BUSD. That is 19.1 BUSD out of a total allocation of 29.5 BUSD. The DOE’s budget is largely a gigantic subsidy for the nuclear industry. (Support for the petroleum industry is a large part of the rest [1]). Nuclear power is capital intensive, building a plant is very expensive, but it is also labor intensive as it takes a significant amount of highly skilled (i.e. expensive) labor, and the raw materials / fuel (uranium) is expensive. In what free market would this type of electricity be competitive? One could add the Price-Anderson Nuclear Industries Indemnity Act of 1957 as huge government subsidy and intervention. Add to that nuclear power research funded by the Federal Government, their role in uranium mining, processing, disposal and indeed every step, there would be no civilian nuclear power industry. While you are certainly correct that nuclear generated electricity does not release GHGs, on a strict cost-benefit analysis, it just does not make sense. The disposal issues are just the tip of the iceberg.

    There is no form commercial energy generation that is not subsidized by the US government and no more subsidized that nuclear power.

    [1] http://energy.gov/about-us/budget-performance

  • James Conca James Conca, Contributor 1 year ago

    That’s completely wrong. DOE is all about weapons. The science crosses disciplines but the funding is all about weapons and weapons waste. The amount of funding for power is small but should be larger.
    see the following on subsidies
    and the waste is not the issue you think, the existing NWFund could easily pay for disposal in the correct geology with no subsidies or new appropriations. see

  • Here is nonsense — “Fukushima failed because the biggest tsunami in history took out the back-up generators…”

    Here is reality — Fukushima failed because humans built from a lame design.

    The execs at TEPCO and the technocrats of the Japanese government played fast and loose, heaping all of the negative effects upon the Japanese and perhaps later, Californians, Oregonians, Washingtonians, Alaskans and British Columbians, while reaping all of the rewards for years.

  • James Conca James Conca, Contributor 1 year ago

    Which demonstrates why we need to build new designs in everything, not just nuclear. New solar, new pumped-hydro, new GenIII and modular passive reactors. We ramp down the old everything and ramp up the new.

  • Still, your expressed thinking suffers significant defect. You blamed a tsunami when the fault lay in bad design brought forth by humans.

    And this appeal to “we” fails to comport to reality. There is no “we.” There is no such thing as “we.” There are only individuals. It’s a cheap rhetorical ploy to sucker others into accepting they’re part of something, which they are not.

    Individuals who want to pool investment into capital who believe they can earn a return on investment suitably better than other investments are free to try their hands at doing so. Yet, to say that “we” should do X amounts to little more than lame ploy to get others to support your agenda, often at the expense of others.

  • Dr. Conca,

    Civilian nuclear power was all about nuclear weapons and naval propulsion.

    The decision of the Federal government in the 1950′s to subsidize the creation of the civilian nuclear power industry (e.g. The Price-Anderson Act) was made because nuclear power was not commercially viable but the military needed a nuclear power industry (naval powered submarines – and later aircraft carriers- and nuclear warheads for the army and air force). The military alone could not achieve the necessary critical mass. A federally subsidized commercial nuclear power industry was the answer. This is also why US commercial reactors share the same fundamental design as naval nuclear reactors. The light water reactor used in aircraft carriers was designed with space saving and the use of salt water a coolant in mind. This type of reactor is very hot with a very high heat density which has many safety issues. Commercial reactors in the US have the same basic design, in no small part so that research in reactor design for military needs could piggy-back on commercial reactor design research – or it might be better to say that the two are essentially the same thing. The problem lies in that there is no real reason from an electric generation perspective, and a safety perspective, for a compact, high density reactor to be used in a commercial reactor. Indeed, from a strictly commercial perspective, there is no reason to use nuclear power at all. The capital costs are enormous and the operations and maintenance costs are very high, to say nothing liability insurance. After the Nuclear Test Ban treaty and the end of the Cold War, there has been no demand for nuclear warheads. Since the Three Mile Island incident, there has been no new civilian nuclear reactor built. Only the Navy has an on-going nuclear power sector.

    Thisis why DOE is indeed a giant subsidy for commercial nuclear energy.

  • Marc Mueller Marc Mueller 1 year ago

    Of course, it could never happen here.
    Funny how socialist types hate sustainable power, which would not exist without massive government subsidy, and special protection (Solyndra, etc). No private money would finance, no private insurer would underwrite, without the central planners picking this industry.
    Global Warming will never happen again, only the next thing we can’t imagine will happen again. Guaranteed.

    There! Completed your logic for you.

  • James Conca James Conca, Contributor 1 year ago

    No, it wasn’t a bad design, it was a 1960′s design that needed to be upgraded, as we did. I don’t have an agenda except science, but it would be nice if the market could be allowed to work the way it supposedly should, although it never seems to be free.