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January 9th, 2014

Vermont Yankee -- Deal Reached on Decommissioning

by Andrew Price, President & COO

Decommissioning a nuclear power plant can take a long time; up to 60 years after the last MWh of electricity is produced. Vermont reached a deal with Entergy, the owner of the Vermont Yankee nuclear station, to decommission the plant “as soon as possible”.  Governor Shumlin, who announced the deal in late December, did not give a specific date but indicated that decommissioning could take place in the 2020 time frame. The nuclear plant is scheduled to be permanently shuttered in the fourth quarter of 2014, just before natural gas and power prices get set to spike again next winter. Extending the life of the plant just a few months, into spring of 2015, could be a good deal for Entergy, Vermont and New England consumers. 

The longer a nuclear plant sits, the less radioactive it becomes. Reducing the volume of highly radioactive concrete, metal and other demolition debris can greatly reduce decommissioning costs. It can take years before the nuclear fuel rods are cool enough to be removed from onsite storage pools. Of course, a permanent home for spent nuclear fuel is as politically toxic as the waste itself. A central repository for nuclear waste, run by the federal government, is one of the many intractable issues in Washington DC. The easiest thing to do is let a plant sit idle; currently the Nuclear Regulatory Commission (NRC) allows up to 60 years to fully decommission plants under a program called SAFESTOR.

Vermont Yankee, which began operations in 1972, will generate power for one more year before being mothballed in late 2014. The Vermont plant joins San Onofre (CA), Crystal River (FL), and Kewaunee (WI) on the list of nuclear retirements announced in 2013. The availability of cheap natural gas, and resulting low power prices, contributed to the decision to close each of these plants. If the last two winters are any indication, Vermont Yankee may be shutting down a few months too soon.  

New England, which is experiencing significant power and natural gas price volatility this winter due to a shortage of natural gas on peak winter demand days, may see higher prices as a result of the retirement. Vermont Yankee can generate over 600 MW at peak output. If all of this lost generation was replaced with natural gas fired power generation, an additional 90,000 - 110,000 MMBtu per day of natural gas would need to be delivered to the region. Until additional transmission lines capable of importing power from Canada, or natural gas pipes capable of importing natural gas from the Mid Atlantic, are completed, this could create even more stress during peak winter days.

Entergy, Vermont and New England could all benefit by moving back the date to mothball Vermont Yankee from late 2014 to spring 2015. An extra 600 MW of non-gas fired power generation could help take a bit of the edge of prices next winter.

Additional information about Vermont Yankee and how its closure could impact New England can be found here and here.

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(Tags: Vermont Yankee, Entergy, Nuclear Regulatory Commission, New England, Power, Electricity Prices)


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