See
the post on June 22, 2014, for some of the background to this story and a list of earlier links leading up to this. This is how that post started:
A reader has sent a very, very good article on future of US utilities
and the national power grid, using Exelon as a contemporary case study.
It's an article that should be read by anyone interested in the Bakken,
and now, perhaps, the "Sleeping Giant." If one does not have the time to
read it today, bookmark it for future reference.
It's been my
experience that many of these stories are eventually archived for
subscribers only or removed completely from the net at some point in the
future.
Today, an update on the Exelon experience in Illinois.
To save two nuclear plants in Illinois that provide about 12% of the state's electricity needs, the company requested 25 cents -- a quarter -- to be added to everyone's utility bill every month. Twenty-five cents.
The "people" said no. So Exelon says it will shutter their nuclear plants.
Here's
the story from Motley Fool's perspective. It begins:
The state of Illinois accounts for just
4% of the country's population but 12% of its nuclear power generation.
Eleven nuclear reactors generated 48% of the state's electricity,
created thousands of jobs, and provided hundreds of millions of dollars
in tax revenue in 2015. So, naturally, the state decided it would be a
good idea to let Exelon close its nuclear power plants at Quad Cities and Clinton in the coming years.
How did we get here?
Exelon had been working with environmental groups and state
regulators to pass a rather reasonable proposal that would have provided
modest subsidies -- $0.25 per monthly electric bill -- to keep nuclear
reactors operating. When politicians dragged their feet on the
legislation, the company reminded all stakeholders that it would be
forced to close several reactors. Politicians called Exelon's bluff, the
company announced formal plans to close two of its facilities, and now
the state is poised to lose 12% of its electricity generation by 2018.
Ironically, Illinois is hoping to replace
the lost carbon-free power generation with natural gas -- working
against its Renewable Portfolio Standard -- and subsidized renewable
energy. If that doesn't make sense, it shouldn't.
Taking Quad Cities and Clinton offline
will remove more carbon-free energy from the grid than the total
renewable energy generation from Illinois, Colorado, and Washington
combined -- all because Illinois didn't think it was a good idea to
approve a fee of $0.25 per monthly electric bill to keep its nuclear
power plants operational.
While you could counter that nuclear isn't competitive with cheap
renewables anymore, that neglects to consider the fact that wind energy
is highly subsidized. In 2015, over 96% of wind power generated in the
electric transmission system that Illinois participates in was sold at a cost of zero or less.
There is much more at the link. The whole story is insane.
My hunch is that someone will find a way to keep the nuclear reactors running.
A couple of data points:
- these two nuclear reactors provide 12% of all electricity generated in Illinois
- all of the wind/solar energy in Illinois provides that state 5.6% of its electricity (and it's completely unreliable and non-dispatchable)
- these nuclear power plants avoid enough carbon dioxide emissions to take the equivalent of 15 million cars off Illinois roads (for the record: Illinois has only 7 million registered passenger vehicles
By the way, this "percent electricity provided" is becoming more and more irrelevant in these discussions. Talking about wind/solar energy is a lot like taking about the stock market: past performance is no indication of future performance.
Analysts can pretty much forecast down to the hundredth percent how much electricity will be provided by a given nuclear power plant running 24/7 next year on any given grid.
There is no way possible to predict how much energy wind/solar will provide next year on any given grid. So, when someone says wind/solar provided 6% of the state's electricity, it doesn't mean it will do the same next year. Worse, unreliable energy is unreliable because it cannot be predicted, and it is not dispatchable.
I don't know if
Motley Fool mentions it in their article, but the unreliable energy sources have to be backed up with conventional energy. At one time, I would have argued that nuclear energy could be that back-up but it turns out nuclear energy is too expensive and too slow to bring back on line if wind/sun go off-line.
Anyway, preaching to the choir. For the archives only, to follow this debacle.
By the way,
Motley Fool is focused on investing. It seems like when it comes to investing in energy, it's an open-book test.