A few weeks ago, PG&E announced that it would not pursue a license renewal for the 2200mw reactors at Diablo Canyon. This is major landmark decision, driven by the potential seismic issues at the site, and the need for huge uneconomical upgrades to continue to run the plants beyond their 2024 expiration. Several major policy points are highlighted in this decision.
First, nuclear power today is basically uneconomical, and way more expensive than the alternatives of natural gas, renewables, and efficiency. This is true for new plant construction, as well as the continued operation of the aging plants built 30-40 years ago. Diablo has always been contentious…first in its fiasco construction cost overruns, then in its electricity pricing schemes during the 2000’s deregulation debacle, to its current expensive electricity…even though it is an old plant whose capital costs have been paid for over the years by ratepayers. This is happening all over the US, as we begin to wean ourselves from the large economic, environmental, and social costs of centralized nuclear and coal power.
Second, the myth of utilities needing huge baseload power to counter the intermittency of renewables no longer stands. PG&E CEO Tony Earley said “that as the company looked into California’s energy needs for the coming decades, it didn’t see a place for Diablo…Our analysis continues to show that instead of continuing to run all the time, there will parts of the year where Diablo will not be needed…At a plant like Diablo, with large fixed costs, if you effectively only run the plant half the time, you’ve doubled the cost.” I have talked before about peak power demand, and how generating resources are allocated. Early use of solar met some of the need for “peaker” natural gas plants. The tremendous deployment of renewables, and their enormous potential today offers the ability to use the most cost-effective and efficient energy resource to meet the demand. Recently, in the Northwest, some wind power producers were paid (due to contracts written years ago) not to produce power during certain times, because demand was low, and large baseload power plants could not be turned on or off at will. Renewables can be turned on or off whenever without serious economic issues because of their technology, and the fact that the fuel is free. Some say that costly peakers will only be used in dire circumstances, since batteries can be recharged and hydrogen produced at will whenever excess electricity is available anytime of the day.
Third, PG&E acknowledges the dramatic and incredible changes that are coming to the “grid” and to the utilities themselves. The biggest challenge obviously is the storage of excess electricity for use when needed. California is actively pursuing and developing various options with great promise. (I still think hydrogen/fuel cells will become the most realistic option.) Ironically, back in the ‘80’s the only way Diablo could fit into California’s electricity system was with storage. At night when the 2000MW of baseload was not needed, and the plant could not be turned off, the power was used to pump water uphill to a reservoir where it would be released the next day providing 1000MW of hydro power when it was needed (the Helms Project.) That water is captured, and pumped back uphill the next evening. Smaller-scale storage will allow for more flexibility in the new digital grid system, with various options being battery storage (commercial large scale as well as small residential,) pumped storage, mass /gravity systems, compressed air, and a whole lot of ingenious methods on the drawing boards.
Fourth, the whole electricity market is changing very rapidly. More and more businesses and individuals are seeing the benefits of creating their own power, and using utilities for distribution, or just bypassing them altogether. Google just overtook the US Department of Defense as the largest single user of electricity, and will soon become the largest single producer in the US, with more to come. MGM Resorts found it cheaper to generate their own electricity rather than buying it from the utility, and that Nevada utility just lost its biggest customer. As prices comes down due to better manufacturing, increased efficiency, and new financial marketing, the future looks very bright. Add the fact that electricity demand is declining due to efficiency in all sectors…thus PG&E holds confidence that it can meet the challenges of the future for California. Remember, this is one of the largest utilities in the US, and other states and utilities will soon follow suit, because they need to evolve and adapt to the new technological grid and the shift from the old-school business model of supply and demand.
Fifth, another myth that we need nuclear to meet the challenge of reducing CO2 emissions no longer holds validity. Even though the actual operation of a fission reactor does not produce CO2 because it is not burning fossil fuels, the entire fuel chain from creating the uranium fuel to decommissioning and waste disposal releases large amounts of all kinds of toxic and greenhouse emissions. PG&E is confident that it can meet the demands of the State for its mandate of 50% renewables by 2030 with a subsequent decrease in emissions.
Sixth, PG&E glosses over the huge commitment to the decommissioning of Diablo, stating that the cost sometime down the road would be $3.8 billion. I stand and say “Nonsense!” “Big Hoax!” In 1987 when we in Humboldt County fought PG&E in court on decommissioning costs, they estimated Diablo to cost $200m. We prevailed with the judge acknowledging a price tag of $1B. PG&E was appalled. At the same time, the Humboldt Bay nuke was estimated at $95m. That escalated to $380m in 2007 before work began; then to $500m a few years later, to the current estimate of over $1B. I expect Diablo will cost in excess of $8B, and the actual work won’t begin in earnest for 20-30 years, with PG&E spending large sums of monies for SafeStor of the plant and the safeguarding of the spent fuel waste. Meanwhile, ratepayers will continue to be charged a “tax” to go into the fund (currently at $2.8B) to pay all the bills, and future generations for years to come will continue to meet that debt, as well as the unknown costs of storing the spent fuel forever. It’s interesting that EDF in France is starting to drool over the current $200B cost estimate for decommissioning its reactors...Areva, Bechtel, Babbcock & Wilcox, Westinghouse, at al are licking their chops for their future profits in the trillion dollar global bill. Remember, these monies are non beneficial…no real benefit except for the jobs and profits…no useful product such as electricity, goods, or other products. It’s taking out the garbage after an elaborate meal. Sort of like the Cold War mentality, where we spent trillions of dollars producing something (nuclear weapons) we hoped we never would have to use!
The future closure of Diablo Canyon is indeed a battle long fought and hard won. We are still trying to get it closed NOW before an earthquake or other incident creates an economic and environmental catastrophe. Our dreams are slowly coming true as we always believed, where we can run parts of our society on clean, sustainable, renewable energy. There are tremendous challenges ahead, both technical, and mainly political; but over time common sense prevails. We’ll see what happens in November!
A couple of good reads are: