The planned shutdown of the Vermont Yankee nuclear generating station (VY)in Vernon next year has already begun sending early shockwaves around Vermont and the New England region.
Several non-partisan energy studies have already indicated the shutdown will almost certainly mean higher electricity costs, business defections across the state line, and costly replacement with imported energy-via Hydro Quebec-that will make Vermont less energy independent and more vulnerable to cross border politics.
Last year, the Vermont legislature voted on a resolution to close VY in 2012. Entergy, owner of the plant, also needs a Certificate of Public Good from the Vermont Public Service Board-an entity created by the largely anti-nuclear legislature-to continue operating.
If the board withholds the certificate, Entergy will likely go to court to protect its multibillion dollar asset for its shareholders. VY could be operating while the case is in court which may take months or years to resolve.
Removing VY, fully paid for, from the CO2-free column is an unwise waste of CO2-free resources, according to Willem Post of Coalition for Energy Solutions.
"The U.S. should be adding power plants to the CO2-free column to reduce global warming, not removing them," he said.
Entergy has requested the U.S. Nuclear Regulatory Commission (NRC) to extend the VY license to 2032.
"This is not an unusual request," said Post. "In the U.S., 17 of 36 plants with boiling water reactors had their license extended from about 40 years to about 60 years. All of the extensions, except one, were for Mark 1 reactors (like the one operating at VY)."
In Vermont, the power mix is 62 percent from CO2-producing fossil fuels, 26 percent from CO2-free nuclear, 6 percent from CO2-free hydro, 4 percent from CO2-producing wood waste, 2 percent from CO2-producing solid waste and 1 percent other (CO2-free wind, solar, etc.).
"Almost all of this power is steady power and the grid is designed accordingly," said Post. "The reason the few New England nuclear plants produce so much electricity is because their capacity factors-or CFs-are about 0.92, much higher than the other plants on the grid."
Vermont Yankee's Mark 1-type boiling water reactor (or BWR) has a rating 620 MW and a replacement cost about $4 billion. It produces 4,500-5,000 GWh/year of low-cost CO2-free,steady power.
VY annually pays millions of dollars in taxes and fees to the states of Vermont and Massachusetts, according to Vermont Gov. Peter Shumlin's office.
Several observers on the side of saving the power station, including John McClaughry of the libertarian Ethan Allen Institute, warn that Vermont acting on its own to shut down VY is both unfair and counterproductive to the CO2 reduction efforts of neighboring New England states.
Several economic and environmental impacts are beginning to be weighed if Vermont Yankee shuts down next year.
The following information is culled from several sources including the NRC, State of Vermont, Ethan Allen Institute and the Coalition of Energy Solutions, and the Vermont Electric Power in Transition Report. All sources appear to agree on several key factors around future energy costs in the state following closure of VY.
If VY stops operating in 2012 it will:
•Increase Vermont's power cost by $620,500,000 during the six-years after VY is closed.
•Raise Vermont electric rates from $0.120/kWh to $0.137 kWh, or 14.2 Entergy, the owner of VY, has requested the US Nuclear Regulatory Commission, NRC, to extend the VY license to 2032.
•Require a capital expenditure to implement renewable power systems in six years: 2,086/3,595 ($2.49 billion + $5.14 billion) = $4.43 billion.
•Add 66 billion pounds of CO2 into atmosphere because of fossil-fuel power purchases from the New England\Northeastern grid for six years after 2012.
•Job losses:VY's direct employment is about 650, including union workers; its direct payroll with benefits is approximately $80 million per year.
The economic multiplier effect is about three, according to Willem Post, meaning many businesses in a 25-mile radius from VY (or 300-square-miles in area) will be under increased economic pressure. The likely scenario is staff reductions that might impact more than 1,000 area employees.
The Duane Arnold Nuclear Energy Center in Palo, Iowa, employs 600 people with annual payroll $85 million; it recently received a 20-year license extension from the NRC.
"The closing of VY would mean this 300 square-mile area will become an economic backwater, just as Windsor, Vt., became a backwater when companies moved out," Willem said. "Windsor has not recovered after 30 years."
Impact on New England States
As viewed through the eyes of Willem Post and others like him, instead of being a benefit to the economies and budgets of Massachusetts and Vermont, the area around the shuttered power plant will become a significant tax burden to Vermonters for years.
"Tax collections will be less by many millions of dollars and payments for unemployment benefits will increase, all this while these states have large budget deficits for years to come," Post said.
"The last thing New England households and businesses need is to see unnecessary electric rate increases that will be reflected as higher prices later. Closing VY means Vermont would be shooting itself and other New England states in the feet at the worst of times,"he noted. "Vermont's standing among New England states would be diminished at exactly the time it needs to cooperate with these states to integrate P.V. solar and wind power into the grid."
Subsidies to Attract Capital
The Vermont Electric Power in Transition Report shows that the state will have to offer a P.V. solar fit of at least $0.30/kWh and a wind fit of at least $0.08/kWh and 20-year power purchase agreements-or PPAs-to attract the billions of dollars required to build the solar and wind systems.
The report also noted that the closing of VY would immediately require increased power purchases from Hydro-Quebec (if transmission capacity is available) and from the grid. It ultimately would require Vermont spending billions of dollars for the construction of P.V. solar and wind systems to generate 2,086 GWh/year to replace the power provided by the Vernon reactor.
The report implies that other New England states will have to increase their purchases from the grid and raise billions of dollars for P.V. solar and wind systems to generate about 2,500-3,000 GWh/year to replace the power provided by VY-a costly experiment.
"Power purchases from the grid by New England states due to the closing of VY will last for many years, because it will take many years to construct the renewables capacity to replace VY," Post said." This means the CO2-producing power plants on the grid have to increase their outputs to provide that power to New England states; the nuclear plants on the grid already are operating near maximum capacity. It's a step backwards for climate change."