Sunday, August 14, 2016

Nuclear subsidies are key part of New York's clean-energy plan

Nuclear subsidies are key part of New York's clean-energy plan
New York Times, 20 July 2016, by Vivian Yee

My previous post discussed one angle on the "intermittency problem" posed by solar.  This article exposes another angle on the same basic issue.  New York plans to get half of its electricity from renewables – mostly solar and wind – by 2030.  But if the sun isn't shining and the wind isn't blowing, that means that there will be half as much energy feeding into the grid as when the sun is shining and the wind is blowing.  This poses a problem.  When the sun is shining, the cost of solar is getting remarkably low – so low that it undercuts other sources of power, rendering them unprofitable.  But those other sources of power can't all be shut down; they are needed when the sun is not shining.  The need for this "baseline power" that is available at any time means that as solar and wind increase their market share, something must be done to keep the baseline power economically viable.  As renewables grow, we can let the dirtiest baseline plants fold – i.e., coal plants.  But we can't let them all fold, even though they will all be rendered unprofitable due to the glut of cheap solar power during peak times.  In particular, if we close nuclear plants (which are zero-emissions), we will just burn that much more natural gas, or perhaps even revert back to burning coal after all – and then we won't meet our climate goals.  New York's response to this situation, as the article details, is apparently to subsidize the nuclear plants to keep them economic, but of course this is politically uncomfortable given the public's dislike of nuclear, as well as Exelon's near-monopoly position on New York's nuclear power.  It smells like a corporate giveaway, and the politics of it have been handled poorly by the state, too.

My take: The problem is real.  Cheap but intermittent renewables undercut the prices necessary to sustain the baseline power plants that we need, for the foreseeable future, to meet our power needs.  Various solutions to this problem have been proposed, from charging solar generators an extra fee (effectively penalizing them for their intermittency), to subsidizing baseline plants so they remain economically viable; none is very satisfying.  The most natural solution would be to let the market set prices freely throughout the day; prices near the solar peak would plummet toward zero, whereas prices off-peak would skyrocket (because the baseline plants would have to pay for themselves only by selling power during those off-peak times).  This solution is generally seen as so undesirable that it is not seriously considered, since it would render both solar and non-solar plants economically precarious, and would probably raise overall energy costs considerably.  So.  New York will probably receive a lot of flak for giving money away to Exelon to support nuclear plants that aren't profitable on their own; but it is worth contemplating the reality of the energy market and asking what alternative solution you would actually prefer.  If the nuclear plants close, that will be the final nail in the coffin for any hope of New York meeting its climate goals, since they supply about a third of all NY's power.  Instead, we simply must find a way for solar and nuclear to "play nice" even though solar undercuts nuclear in cost.  As with the problems examined in the previous post, these sorts of issues are why many analysts have trouble imagining intermittent renewables providing more than 50% of our power without major technological advances in batteries or long-distance transmission.

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