By Christen Smith
WILMINGTON, Del. — Exelon told PJM’s Markets and Reliability Committee on Thursday that the RTO “buried the lede” in its analysis of nuclear plant retirements in Ohio and Pennsylvania, suggesting instead that results prove the reactors offer value worth saving.
“We think the results show it makes sense to preserve zero-carbon sources and replace retiring coal units with gas units,” said Jason Barker, director of wholesale market development for Exelon. “The data shows better results than the response that PJM promoted. Frankly, it sort of buried the lede.”
Exelon manages the largest nuclear portfolio in the country, including the decommissioned Three Mile Island near Harrisburg, Pa. (See Exelon to Close Three Mile Island.)
The PJM study, published June 7, concluded emissions will drop regardless of whether FirstEnergy’s Perry and Davis-Besse facilities in Ohio and its Beaver Valley plant in Pennsylvania close or stay open — though the reduction would be significantly greater if the plants stay online. (See PJM: Nukes Keep Energy Costs Down, in Theory.)
Regulators in both states asked PJM to simulate the impact of losing the plants on the power grid and greenhouse gas emissions as subsidy plans pend in each legislature. Staff obliged the requests by creating five scenarios against which to compare what the RTO considers its base case: all three plants retire, and scheduled gas and renewable generators with an in-service date in 2023 come online, reducing net-load payments by $1.6 billion. Carbon dioxide emissions would likewise decrease by 4.3 million tons, while nitrogen oxide and sulfur dioxide emissions would fall by 37,900 tons and 18,200 tons, respectively, the analysis concluded.
Should all three nuclear plants stay operational and new generation enters the market as planned, net-load payments would decrease by an additional $474 million from the base case. In Pennsylvania, emissions of CO2, NOx and SO2 would decrease from the base case by 4.7 million tons, 5,000 tons and 3,300 tons, respectively. In Ohio, the additional emission reductions total 3.7 million tons, 2,400 tons and 3,500 tons, respectively.
The results are similar — net-load savings increase and greenhouse gas emissions decrease — when either just Beaver Valley or the Ohio plants stay online, PJM found.
“The data really reveals here the benefits” of keeping the plants open, Barker said. “The base case demonstrates coal to gas switching, and we think that will occur regardless of the fates of the nuclear plants. Simulation 1 is the real story … which is what are the impacts of maintaining these units.”
Critics have argued that PJM’s other simulations that reduce the number of gas units scheduled to come online by 50% as “more realistic” than the first scenario — a result of nuclear subsidies that could come to fruition and discourage market entry.
Barker argues that those scenarios “aren’t very credible” because PJM made no consideration of how many projects already had interconnection study agreements, where these projects were located or how committed developers were to completing them.
Exelon’s analysis of PJM’s data purports that even if developers canceled 4.6 GW of scheduled gas units, the combined impact of coal retirements, preserved reactors and renewable penetration would still reduce carbon emissions by 16.8 million tons and reduce energy costs $1.7 billion.
“PJM answers the wrong question,” Barker said. “The story is really in the difference between the base case and the simulation. We just unmasked the data.”
Stu Bresler, PJM’s senior vice president of operations and markets, said the RTO stands by its analysis.
“We think subsidization of significant generation of any type would lead to long-term reduction in entry,” he said. “Our intent was to throw it all out there … to let stakeholders apply whichever subsidy level they think is most appropriate.”