By Ray Henry and Michael R. Blood
LOS ANGELES, Calif. (AP) – The decision to close California’s San Onofre nuclear plant is the latest setback for an industry that seemed poised for growth not long ago.
In Wisconsin, a utility shuttered its plant last month after it couldn’t find a buyer. In Florida – and now California – utilities decided it was cheaper to close plants rather than spend big money fixing them and risk the uncertainty of safety reviews.
Meanwhile, the low cost of natural gas is discouraging utilizes from spending billions of dollars and lots of time to build nuclear reactors.
New technology allows drillers to extract more gas within the U.S., increasing the supply and pushing down prices. In states were utilities operate as monopolies, they are reluctant to ask their regulators for permission to build enormously expensive nuclear plants – or even fix old ones – when it so cheap to build gas-fired plants.
In places where utilities sell power into the open market, the low prices don’t offset the financial risk of building expensive and time-consuming nuclear plants.
“The world has changed with natural gas prices being so low and so much gas being available for so long,” said Mike Haggarty, a senior utility analyst for Moody’s Investor Service.
Industry supporters acknowledge the challenging economics but say nuclear power still has long-term possibilities. While the costs to build plants are enormous, once online, the fuel and operating costs are relatively low. And reactors can reliably produce power with little or no carbon emissions, said Steve Kerekes, a spokesman for the Nuclear Energy Institute, an industry lobbying group.
Plants fired by gas cost much more to run when prices surge.
“When gas prices are low, that’s great,” Kerekes said. “But a lot of people don’t like to put all their energy eggs in one basket.”1 2 3 next >>