Hulking Nuclear Plants Try to Get Nimble in Volatile Power Markets
(Bloomberg) -- Nuclear reactors, the lumbering giants of electricity generation, are trying to become more agile.
Power grids have become so swamped with volatile wind and solar that traditional plants are being forced to abruptly adjust their own output to keep systems stable -- or pay a penalty. That’s prompting reactor owners including Exelon Corp. and Duke Energy Corp. to develop ways to tap the brakes on massive plants built to run non-stop.
The future of nuclear power may hinge on the effort. Reactors, which some environmentalists see as key in the fight against global warming, are already struggling to be profitable as cheap natural gas pulls down power prices. And the challenge of ramping up and down to keep pace with wind and solar will only get worse as California and other states push to eliminate fossil fuels.
“We’re going to see this problem more and more,” said Matt Crozat, senior director of policy development at the Nuclear Energy Institute. “These trends won’t abate.”
Exelon, the biggest U.S. nuclear operator, is already tinkering to make plants more nimble, including by adjusting control rods inserted into the core of a reactor to absorb neutrons and slow chain reactions. That and other measures can help reduce power by almost 15 percent in less than an hour, said Lacey Dean, a spokeswoman.
Exelon regularly adjusts output at its Quad Cities and Byron plants in Illinois when they face negative pricing, which means the grid is so awash in power that generators must either cut output -- or pay to keep sending electricity to the system.
There have been 37 hours of negative pricing this year in the market Byron serves, thanks largely to wind power flooding in from Iowa, according to Adam Jordan, director of power analytics at Genscape Inc. That dragged prices per megawatt hour as low as -$92.81, on Feb. 12.
While nuclear plants depend largely on long-term contracts, they’re still affected by real-time prices, said William Hogan, a professor at the John F. Kennedy School of Government at Harvard University and research director at the Harvard Electricity Policy Group. When spot prices are lower than their operating costs, it’s cheaper for operators to purchase and resell electricity than produce it themselves -- if they have flexibility to quickly cut output.
“If you’re running a plant that’s on average profitable and sometimes not, it would be good to be able to adjust the output for the times when it’s not,” Hogan said.
The challenge posed by wind and solar will only get worse for the nuclear industry. Generators on the grid operated by PJM Interconnection LLC will need to more than triple the amount of wind on the system in the next decade to meet states’ clean energy goals.
Time is critical for nuclear plants, which supply about 20 percent of electricity in the U.S. Reactors are struggling to stay solvent as the fracking boom has made gas cheap and abundant, pushing down wholesale electricity prices.
While environmentalists long shunned nuclear power because of its radioactive waste and risk of meltdowns, states including New York, New Jersey and Illinois have passed legislation to support reactors in recent years, saying they’re critical to clean-energy goals. New Jersey regulators are set to decide Thursday whether to grant subsidies to the state’s last two nuclear plants, whose operators say the facilities will close without the aid.
There’s a downside to slamming on reactors’ brakes. It can stress components and may reduce a plant’s lifespan. “Nuclear plants are not designed to vary their loads on a regular basis,” Crozat said. “That doesn’t mean you couldn’t do it. They’re just not designed for it.”
In the U.S. Southeast -- where solar farms have proliferated -- Duke has been “experimenting with flexibility” at one of its reactors, Chief Executive Officer Lynn Good said at the BNEF Summit in New York last month. The effort is in the very early stages, and the company declined to provide additional details.
Meanwhile, more wind and solar is coming, forcing reactors to to either pay up -- or slow down.
“There’s this idea that they can’t,” Jordan said. “But when power prices are low enough for long enough, we’ll see some nuclear operators start to try.”
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