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EPA CO2 rules could boost nuclear power

By Peter Maloney

June 25, 2014 - The Environmental Protection Agency's recently released plan to reduce carbon dioxide emissions from existing power plants could provide a boost to nuclear power.

EPA's Clean Power Plan, which aims to reduce CO2 emissions 30% by 2030, sets individual CO2 reduction targets for each state and gives states latitude in how they propose to meet those goals.

When the EPA calculated those state-by-state CO2 reduction goals, it gave credit for nuclear plants under construction. The agency also acknowledged that economic conditions have put some nuclear plants at risk of closure, but gave full credit for all nuclear plants, providing a de facto incentive for states to keep at-risk plants running.

Analysis continues below...

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By including under construction and at-risk nuclear plants (see table) in its calculation of state goals, the agency put pressure on states to make sure those plants enter service and stay in service.

"It seems the EPA is putting a very clear emphasis on nuclear power, but it is hard to unpack" because technically the agency is technology neutral, Benjamin Salisbury, a senior vice president at FBR Capital Markets, said.

EPA's treatment of under construction nuclear plants seems the most straightforward. There are five reactors currently under construction and, under the agency's proposed rules the three states where those reactors are being built are credited as if those plants will enter service.

See table: Nuclear states and aggregate capacity

Southern Co. is building two reactors totaling 2,200 MW at its Vogtle plant in Georgia. In South Carolina SCANA is building two reactors totaling 2,200 MW at its VC Summer plant. And the Tennessee Valley Authority is adding a 1,270-MW reactor at its Watts Bar facility in Tennessee.

If those plants were not to reach completion, those states would have further to go to meet their EPA mandated goals. Because nuclear plants have zero emissions, even the cleanest thermal plant would add to the state's emissions tally. Likewise, states with at-risk nuclear plants also would fall behind if those plants were to close.

From the perspective of a nuclear plant operator, EPA's proposals pertaining to at-risk nuclear plants could be among the most promising provisions in the proposed rules. They are also the most difficult to unravel and to understand.

The EPA, citing Energy Information Agency data, said there are 5,700 MW at six nuclear plants at risk of closing because of "increasing fixed operation and maintenance costs, relatively low wholesale electricity prices, and additional capital investment associated with ensuring plant security and emergency preparedness."

Neither the EIA nor the EPA identify the individual plants at risk, but a variety of analysts and consultants have drawn up lists of specific at-risk nuclear plants.

The lists vary depending on who drew it up, but most are longer than EIA's. The plants identified also vary, but there are some common themes.

Next page: "There might even be a nuclear renaissance 2.0": source

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