Mark Cooper, a leading U.S. expert on nuclear reactor financing has issued the following statement regarding the closure of the Crystal River Nuclear Power Plant by Duke Energy:
“The closure of the Crystal River plant should come as no surprise. The company’s own report evaluating its ability to successfully repair damage to the reactor’s concrete containment building concluded the risks associated with making necessary repairs could result in dramatic cost increases and extend the amount of time it would take for repairs to be completed.
However, still on the table is Duke Energy’s plan for construction of the proposed Levy Country nuclear plant. Even with the closure of Crystal River, there are several key reasons why it still does not make sense to construct this new reactor.
1) Cost – If it doesn’t make financial or economic sense to spend $1.3 billion to $3 billion to fix the Crystal River plant, then why would it make sense to spend $24 billion to build Levy?
2) Timing – It would take at least 10 years to build the Levy reactor. This would not go towards helping the situation today. The utilities have already figured out how to make up for the lost power from Crystal River, both by purchasing power from the wholesale market initially when Crystal River went down and then by increasing production at existing natural gas facilities. There is not an emergency need for additional power due to these steps and should not be as long as natural gas is plentiful and inexpensive by comparison.
3) Alternatives – In today’s reality, Florida would not build the Levy reactor anyway. Natural gas is cheap. By the utility’s own assessment released last year, building the Levy reactor is more expensive than using natural gas in seven out of eight scenarios they considered where there is no carbon tax. Today, there is none and President Obama has stated he does not intend to enact one. The current climate policy also reduces the need for electricity, which also makes nuclear reactors less economic.”
Cooper is the senior fellow for economic analysis at the Institute for Energy and the Environment of the Vermont Law School. He is the author of “Nuclear Safety and Nuclear Economics” (2012) and “Policy Challenges of Nuclear Reactor Construction, Cost Escalation and Crowding Out Alternatives” (2009).