Entergy Corporation (NYSE: ETR) announced plans on August 27, 2013, to close and decommission its Vermont Yankee Nuclear Power Station in Vernon, Vermont.
The station is expected to cease power production after its current fuel cycle and move to safe shutdown in the fourth quarter of 2014. The station will remain under the oversight of the Nuclear Regulatory Commission throughout the 60-year decommissioning process. A handful of factors, including sustained low natural gas prices, high cost structure, and wholesale market design flaws factored into the decision. Click here for a transcript of a story on National Public Radio announcing the closing of the Vermont Yankee Nuclear Power Station.
The Vermont Yankee closing comes in the wake of heavy criticism against a plant owned by Tokyo Electric Power Co (TEPCO) in Fukushima, Japan. The plant suffered heavy damage from a 2011 tsunami and resulted in extensive contamination to the shoreline and sea. The Nuclear Regulation Authority has harshly reprimanded TEPCO for failing to safely clean the area, and recently raised the contamination rating to Level 3, which is deemed a “serious” situation. Japan’s industry minister said the government will take over cleanup efforts.
The United States Nuclear Regulatory Commission has a list of Combined License (COL) to construct a nuclear plant. At present, there are only two licensees with COLs. Southern Nuclear Operating Company and South Carolina Electric & Gas are licensees with new COLs.
The Vermont Yankee and Fukushima plants each use the same General Electric-designed boiling water reactor. The design uses river water as a cooling source, and has exacerbated issues on Japan’s coast. Vermont residents have lobbied against the Vermont Yankee since its completion in 1972, and feuds with lawmakers span the past decade.
Four other United States-based reactors have closed recently, with decommissions coming in Florida, Wisconsin, and two in California. EDF, a French-subsidized nuclear giant, also announced its withdrawal from the U.S. nuclear power market “due to the inability of nuclear power to compete with alternatives and the dramatic reduction in demand growth caused by increasing efficiency of electricity consuming devices.”
Nuclear energy’s effectiveness has been deeply affected by the emergence of natural gas. The boom of the local Marcellus shale and cost-effectiveness of natural gas has propelled the resource into a premier energy producer while production costs of nuclear energy continue to climb. Natural gas production has increased 16% since 2009, while the construction of new nuclear plants is becoming a rarity. Public sentiment also favors the development of natural gas. A 2013 Gallup poll revealed 65% of all Americans favor a higher emphasis on natural gas production, compared to only 37% for nuclear power. According to the U.S. Energy Information Administration, total natural gas consumption has risen 37% since 2008. The largest usage of natural gas in America is for electric power. During the same period, coal consumption for electric power is down 21% and nuclear power consumption is flat.
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