Natural gas proponents prepare to battle subsidized nukes

While the price is not at the optimum level, continued pipeline additions are helping to maintain, even raise the price of U.S. natural gas, even in the Appalachian Basin. One only needs to look at the number of natural gas-fired power plants that recently came online, are under construction or going through the permitting process to see the cleanest of fossil fuels is remaking how America’s power is produced.

Gas-fired plants in the pipeline

In the trio of states including Pennsylvania, Ohio and West Virginia alone, 30 natural gas-fired plants are somewhere in the development pipeline, totaling more than 26,500 megawatts of power, and investment pegged at more than $3 billion. But there is a potentially very large pothole in the way of the continuing march to natural gas dominance, Kallanish Energy reports. And having backers in extremely high governmental places could only make the pothole larger.

Some states offering subsidies

The concept of subsidies to owners of nuclear power plants, while shut down – at least temporarily – at the federal level, lives and is growing at the state level. Already, New York state, Illinois, Connecticut and New Jersey have passed legislation that offers subsidies under a variety of names (“handouts” to opponents) to nuclear power plant owner-operators. Nuclear plant owners say the subsidies are warranted because without them, their emissions-free facilities cannot compete with dirt-cheap natural gas or even with some subsidized wind and solar plants.

Subsidies, or handouts

Already, one of the U.S. major nuclear plant operators, FirstEnergy, has announced its nuclear power unit has filed for Chapter 11 bankruptcy protection. Billions of dollars of said subsidies – all customer-paid – will be given, officially to maintain zero-emission power, along with power plant jobs and tax base.

Nothing but politics

During last week’s annual Shale Insight 2018 conference in Pittsburgh, the topic of handouts to the nuclear industry was the focus of an early-conference panel discussion. And the presentations were somewhat foreboding. “What has happened in states like New York, Illinois, Connecticut and New Jersey is coming to these three states (Pennsylvania, Ohio, West Virginia),” said John Shelk, president and CEO of the Electric Power Supply Association. EPSA represents independent power producers and marketers.

“This is all about politics,” according to Shelk.

Shelk’s fellow panelist, Dean Ellis, former executive vice president Regulatory Affairs and Communications, at Dynegy, told the Shale Insight audience the concept of “grid resiliency” is a hot topic in the power industry. Subsidy proponents argue having nuclear power available increases resilience.

Reliability vs. resiliency

What is grid resiliency and how does it differ from grid reliability? One comparison states reliability is aimed at reducing the probability of power interruptions, while resilience is aimed at reducing the damage from outages and shortening outage durations. A recent study, “A Customer-focused Framework for Electric System Resilience,” by Alison Silverstein Consulting and Grid Strategies LLC, states “power system resilience should be measured from the end user’s perspective – how many outages happen (frequency), the number of customers affected by an outage (scale), and the length of time before interrupted service can be restored (duration).”

A ‘chilling effect’

Silverstein and Grid Strategies reported fellow consulting firm Rhodium Group determined less than 0.1% of customer outage-hours were caused by generation shortfalls or fuel supply over the 2012-2016 period. The panel agreed state subsidies will have a “chilling” effect on the power market – and will certainly impact the usage of natural gas. Not that the natural gas industry is going to back down from pushing its side in the great fuel debate. “We didn’t ask for a fuel fight,” Shelk said.  

https://www.shaledirectories.com/blog/natural-gas-proponents-prepare-to-battle-subsidized-nukes/