Get Big Pivots

Nuclear replacing coal in places like Craig makes sense in several ways. It would use existing transmission and preserve jobs and tax base. But can the new generation of nuclear reactors prove themselves as a cost-effective technology?

 

by Allen Best

Colorado’s Yampa Valley has been an energy hub since the 1960s. But can it remain one even after the last of the existing five coal-burning units retires by becoming home to a nuclear power plant?

That’s the intent of a conversation now underway. The fulcrum seems to be the Associated Governments of Northwest Colorado. In June, members of the various governments met with State Sen. Bob Rankin, whose district encompasses the northwestern part of the state.

Supporters envision a nuclear power plant in Craig at the site of the existing three coal-burning units. They are scheduled to close between 2025 and 2030.

So far, their comments have steered wide of any discussion about the economics of nuclear. To be blunt, the economics suck, at least right now. Granted, so did solar at one time.

Nuclear boosters lack the support of one key state legislator they most need: Sen. Chris Hansen. He just happens to have a degree in nuclear engineering from Kansas State, where he first saw a nuclear reactor as a high school junior. He also has a Ph.D. in resource economics. Nuclear, he says, fails the economics test, as evident in massive cost overruns in construction of nuclear plants in both Georgia and South Carolina.

That said, reconfiguring the existing coal plant into a nuclear reactor has elements of logic. It would use existing transmission from the Yampa Valley, would provide a tax base perhaps comparable to the existing coal-mining and burning infrastructure, and would provide presumably well-paying jobs, just as coal does now. Coal — either through mining it or burning it — provides 20% of the property taxes for schools in Moffat County, where Craig is located.

Will tourism do the same? There’s a boating shop in Craig that employs a few people, and during summer, there’s a regular caravan of people traveling through, perhaps stopping at City Market, to stock up before heading down the Yampa River or to the Dinosaur National Monument quarry 110 miles to the west. A destination resort it’s not, except during hunting seasons.

A manufacturing center? It’s 90 minutes off both Interstates 70 and 80.

Craig does not have easy alternatives.

See: When the coal plants finally close.

A meeting was scheduled for Tuesday, Aug. 2, in Craig to sell community leaders on the virtue of pursuing nuclear. Big Pivots tried to get details in advance but phone calls and e-mails to two state legislators and one government agency beginning a week before the meeting were not returned.

This public conversation goes back at least to June at a meeting of the Rifle-based Associated Governments of Northwest Colorado.

As reported by the Grand Junction Sentinel’s Dennis Webb last week, the Garfield County commissioners recently approved a letter supporting the association’s pursuit of funding from the U.S. Department of Energy. The agency told the Sentinel that the “Office of Nuclear Energy will work with partners to connect and interact with underserved communities that could benefit from nuclear energy projects to ensure that the growth produced by clean energy projects is equitably delivered to all.”

The letter issued by the Garfield County commissioners said that while “wind and solar have sh;owed their potential, they clearly lack base-load capacity and 24/7 reliability.”

What to make of this discussion?

In February, I wrote a column titled “Nuclear bill failed, but the conversation will continue.” This was just after the bill that Rankin had sponsored, calling for a study of the nuclear potential in Colorado, was defeated in committee. “This debate isn’t over, though, nor will it be until we’ve learned how to store our bounty of renewable energy for weeks or even months,” I wrote.

Rankin had proposed to allocate $500,000 (amended to $250,000) to study the potential for nuclear energy in Colorado. Many people testified for and against – and a few people who identified themselves as environmentalists testified in support because of the very reasons identified by the Garfield County commissioners. The puzzle about how to provide 100% reliable, affordable and carbon-free energy has not been solved. Utilities say they can get to 85% and even 90%. But on a large scale, anything beyond that is currently impossible.

“If we really believe that climate change is an existential threat, then how can we not look at every option,” said Rankin in introducing his bill to the legislative committee in February. “How can we not put in our tool box every possible tool?”

The bill, SB-22-073, “Alternative Energy Sources,” was defeated by the majority Democrats. Conspicuously absent was the support of the Colorado Energy Office. The office has received legislative funding for any number of studies, but did not request funding for nuclear.

Rankin offered to move the study to the Colorado Energy Office from his originally proposed Office of Economic Development, but the die had already been cast. Most telling was where it was assigned by Democratic leaders: The Senate State, Veterans and Military Affairs Committee. A more logical place would have been the energy committee.

No nuclear plants have been built in the United States in decades – and yet, nuclear still continues to provide nearly 19% of all electrical generation, according to the Energy Information Agency.

Chris Hansen at Botanic Gardens

State Sen. Chris Hansen makes remarks prior to signing of a transmission bill in 2021 with Gov. Jared Polis looking on. Photo/Allen Best

Why no new nukes? There are environmental objections, of course, and they are significant in public perception. More problematic, though, have been the enormous cost overruns.

A case in point is a Georgia nuclear power plant that as of May was projected to cost more than $30 billion, according to an AP story.  The original estimate was $14 billion.

Hansen, the state senator, also points to $9 billion spent on a nuclear plant in South Carolina before sponsors pulled the plug. See: “South Carolina Spent $9 Billion to Dig a Hole in the Ground and then Fill it Back In.”

A 2020 study by researchers from the Massachusetts Institute of Technology examined the cause of the cost overruns that have plagued the industry in the last 50 years. They are complex. Researchers reported some potential solutions.

The leading candidate for nuclear cost-shaving is the idea of smaller, modular reactors. The Tennessee Valley Authority has allocated $200 million for pursuit of the idea.

Two such modular nuclear reactors are planned in Rocky Mountain states. One is proposed at Kemmerer, Wyo., site of an existing coal plant (and, the original J.C. Penney’s). Bill Gates, who has written a book about the risk of climate change, is an investor in the company, TerraPower. Another company, NuScale Power, wants to build a small nuclear reactor to the west, near Idaho Falls.

In June, I interviewed Alice Jackson, who had just left her role as president of Xcel Energy’s division in Colorado to lead the company’s planning across its eight-state service territory. What do you need to see in nuclear to convince you that it might have a role?” I asked.

“Cost-effective investment in construction of the new versions,” she replied. “The Idaho National Laboratories is working on I think it’s a fourth-generation SMR. It would be the first in the United States to get built. That’s something we’ll watch very closely.”

Hansen remains to be convinced that nuclear can compete. “I think those technologies will have to prove themselves,” he says. “Right now, it looks the best-case scenario they will deliver electricity at $60 to $70 per megawatt-hour. Wind and solar are coming in at less than $20.”

The Idaho best-case price of $65, he adds, is pre-construction and pre-certification. “It’s almost certain to go up.”

A 2021 study of the levelized cost of energy conducted by Lazard, the consultancy, backs up Hansen. Wind is the cheapest, rooftop solar the most expensive – but with nuclear close behind.

What about the value of nuclear in providing stable base-load power? You know, the sun doesn’t always shine, the wind doesn’t always blow, and we have very little long-term storage. Even that storage – the reservoirs like Powell – are in doubt.

“It’s a concept that has less relevancy than it did 20 years ago,” says Hansen of base-load generation, “because we have so much more flexibility in the system.” He points to greater availability of what is called dispatchable load – meaning that demand can be managed to match supplies.

“Absolutely there is extra value for a power plant that you can operate at the flip of a switch, but keep in mind those units have high rates of unreliability because of maintenance needs and breakdowns, and some nuclear plants have had the exact same problems.”

The unreliability of coal power has been notoriously documented at the Comanche 3 power plant in Pueblo.

Hansen sees other possibilities for ensuring reliability. Broader integration of electrical utilities through regional organized markets — as a bill sponsored by Hansen will require Colorado utilities to do by 2030 — will allow utilities to better overcome power disruptions.

“We should look at every option we have,” says Hansen. “But looking at our recent experience with nuclear, we have had massive cost over-runs and very expensive projects. This while wind and solar keep coming down.”

As for Rankin’s study bill from the last session, Hansen says it would have been redundant, as the U.S. Department of Energy has already done that sort of work.

“The Department of Energy has already done the evaluation work, so there was no need for us to do that with state money,” said Hansen in a telephone interview.

Allen Best
Follow Me
Latest posts by Allen Best (see all)

Pin It on Pinterest

Share This