As natural gas costs plummet, sides split over nuclear energy's future

There was a festive atmosphere in downtown Monroe earlier this week when a group of nearly two dozen environmental activists held a "funeral" for nuclear energy, complete with a small homemade coffin bearing an effigy of the power industry's old mascot, Reddy Kilowatt.

"You're not supposed to smile at a funeral, but this one we can," said Keith Gunter, 63, of Livonia, who has been protesting nuclear power since the late 1970s.

The activists were in a buoyant mood because of the nuclear industry's recent financial struggles, which have brought early closures to several reactors across the country and prompted others to seek bailouts.

Yet they acknowledged that their funeral celebration was more symbolic than literal: 98 nuclear power plants still generate 19% of the nation's electricity — more than all renewable energy sources combined.

Nuclear energy also is far from dead in Michigan, where three nuclear plants provided 30% of the state's electricity last year, according to the U.S. Energy Information Administration. One of them, DTE Energy's Fermi 2, is situated about 9 miles from downtown Monroe on the shore of Lake Erie.

Still, nuclear energy is facing a real crisis that is resulting in some plants closing years ahead of schedule, including the Palisades plant in southwest Michigan, and others needing emergency subsidies to stay open.

The problem stems from the dramatic drop over the past decade in the cost of generating electricity from natural gas, which industry experts say has rendered existing nuclear plants less profitable or even unprofitable in some states.

The reactor closures have resulted in more reliance on energy sources such as natural gas and coal that emit significantly more greenhouse gas, advancing climate change. Nuclear power plants, by comparison, do not produce air pollution or carbon dioxide.

More:60,000 tons of dangerous radioactive waste sits on Great Lakes shores

More:PFAS contamination is Michigan's biggest environmental crisis in 40 years

"It’s not a really great strategy if your goal is to cut carbon dioxide output," said Matthew Wald, spokesman for the Nuclear Energy Institute, an industry-funded group.

The Palisades plant in Van Buren County along Lake Michigan, once expected to stay open until about 2030, will instead be closing in 2022 because of an end in the power purchase agreement between the plant's owner, Entergy Corp., and Consumers Energy. The plant has about 600 workers.

That move is projected to save Consumers Energy ratepayers as much as $172 million, the utility company has said. The utility initially expected to use more natural gas to replace the lost nuclear power in 2022, but now hopes to use only renewables coupled with better energy efficiency, a utility spokeswoman said Friday.

As for southeast Michigan's only commercial reactor, Fermi 2, a DTE spokesman declined to comment on whether the power plant is profitable, but said there are no plans to shutter Fermi before its operating license expires in 2045. About 850 people work at the plant.

Pro-nuclear greens

Not all environmentalists are cheering for the death of nuclear energy. Some, including renowned climate scientist James Hansen, who helped to first bring public attention to global warming in the 1980s, contend that nuclear plants are valuable sources of energy because of their very low greenhouse gas emissions.

Hansen coauthored an Op-Ed piece in the Wall Street Journal in April — headlined "The Climate Needs Nuclear Power" — that said some environmentalists have changed their opinions about nuclear power because shutting down reactors eliminates a low-carbon energy source, making it harder to achieve climate goals.

When nuclear plants prematurely close, utilities typically replace their output with electricity from natural gas or even coal plants, which spew heat-trapping carbon emissions.

That is what occurred in Vermont after the 2014 closure of its Vermont Yankee nuclear power plant, whose power was replaced by natural gas.

And Germany, an early leader in renewable energy, went on to build new coal plants after shutting down its nuclear reactors following Japan's 2011 Fukushima nuclear disaster.

"Anyone seriously interested in preventing dangerous levels of global warming should be advocating nuclear power," Hansen's op-ed said.

'An existential threat'

Such pro-nuclear arguments were brushed off by the activists at Tuesday's funeral, which preceded the Nuclear Regulatory Commission's annual public open house regarding Fermi 2. 

“I don’t like coal either, but I think nuclear power is an existential threat," said Gunter, who has been protesting nuclear power since before the 1979 disaster film "The China Syndrome," whose theater release coincided with the Three Mile Island nuclear accident.

He and other activists agree that time is short for preventing the worst potential effects of climate change, but contend that nuclear plants are too expensive to operate and take too many years to build to be practical sources of low-carbon power.

"When nuclear power first came out, they promised it would be too cheap to meter. That was a bold-faced lie," said activist Jim Sherman, 47 of Waterford. "They promised it would be safe, but we’ve had major accidents all over the world. So it is on its deathbed — unless the corrupt subsidies come in."

State subsidies 

In Ohio, lawmakers are considering legislation that would essentially give a bailout to two financially struggling nuclear power plants, Davis-Bessie, east of Toledo and Perry, outside of Cleveland.

Those plants are losing money because of cheap natural gas and without subsidies, they would need to close, according to media reports.

Nuclear plants in Illinois, New York and Connecticut also have received subsidies to stay in operation, and Pennsylvania is considering legislation that would recognize nuclear power as "carbon free" and add it to a list of renewable energy sources that utilities must buy power from.

More:PFAS contamination is Michigan's biggest environmental crisis in 40 years

More:Michigan health officials warn: Don't touch PFAS foam

“The essential fact in the American electricity market is that natural gas is extremely cheap, and the result is that the market price of electricity has fallen sharply since about 2008," said Wald, the nuclear industry spokesman. “Nuclear plants have actually cut their costs since 2008, but prices have fallen even faster, and as a result, some of them are marginally profitable or not profitable."

Those energy market dynamics upended plans forged a decade ago to build a new generation of commercial nuclear reactors. Only two plants remain under construction — Vogtle 3 and 4 in Georgia — and they are over budget and behind schedule.

In South Carolina, work on two new reactors was completely abandoned in 2017 amid massive cost overruns.

Wald said that construction costs for new reactors are high because so few of them have been built in the U.S. since the 1980s.

DTE obtained regulatory approval in 2015 to construct a new Fermi 3 reactor next to Fermi 2, but says it has no immediate plans to build the new plant.

"We need serialized production," Wald said of nuclear plants. “That’s what the French did, and prices are going to decline as you get to subsequent copies."

Low carbon

Numerous studies, including by the United Nations Intergovernmental Panel on Climate Change, have found nuclear power to be a significantly lower source of carbon emissions per kilowatt hour than coal or natural gas and on par with that of solar panels and wind turbines.

Those studies accounted for carbon emissions from the mining and refining of uranium ore, as well as from the actual construction of reactors and their concrete containment domes.

Yet not all Michigan environmental groups are warming to the idea of nuclear power.

The Michigan Sierra Club remains "ardently opposed" to nuclear for reasons including  meltdown risk, storage issues with spent nuclear fuel and the massive construction investment that should instead go to building more solar panels and wind turbines, according to Mike Berkowitz, the club's legislative and political director.

"It is really important to decommission existing nuclear plants and replace them with truly clean and sustainable sources of energy — wind, solar and efficiency," he said.

However, powering the country right now with 100% renewable energy is generally considered impractical.

The biggest challenge remains the intermittent nature of the wind and sunshine, which don't always coincide with periods of high energy demand.

"The idea that you can run a system on 100% renewables has been thoroughly debunked," Wald said.

University of Michigan engineering professor Anna Stefanopoulou, who is director of the university's Energy Institute, said that current battery storage technology is not yet capable of supporting a vast electric grid with 100% renewable energy.

Until that day arrives, the energy institute supports using some nuclear power in combination with renewable energy such solar, wind and hydropower, she said.

“We are not saying nuclear Is the answer," the professor said. "What we’re looking at is 'what are the best places for the minimal amount of nuclear to maximize renewables.' "

ContactJC Reindl: 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.