Support the PA PUC Proposed Rule on Solar Net Metering

By Michael Krancer
Follow: @MikeKrancer 

The PA PUC proposed rule on solar net metering has drawn a lot of press lately from major newspapers across the state. (See http://triblive.com/business/headlines/8449120-74/solar-cap-power#axzz3biKjb410 and http://articles.philly.com/2015-04-25/business/61497727_1_the-puc-power-production-commission-chairman-robert-f.)

Net metering is where a solar system (on a house, for example) generates more electricity than the homeowner uses that day, the homeowner then sells the electricity back to the grid, and he or she receives a credit on their electricity bill. Basically, it turns the homeowner’s solar PV system into a revenue generator.

Problems arise when net metering becomes overused and costs to maintain the grid, which all of us pay, become higher. So for those of us who don’t own a solar PV system, we end up subsidizing those who do.

To help mitigate this issue, the PA PUC proposed rule puts limits on what can be net metered. In my view, this proposed rule is a basic, common-sense proposal that is important public policy on a couple of levels. First, without the rule, the cost of operating the grid would become higher for people who don’t have rooftop solar panels on their houses, which would be especially detrimental to low-income households. Second, the rule prevents a few well-heeled folks from using the grid for their own personal profit without contributing to the upkeep of the grid. Those screaming the loudest against the rule want the “freeload” effect for their own profit, at the expense of all the rest of us and especially to those who can afford it the least.

The full PUC rulemaking appears here, and it covers more than just solar net metering. I encourage readers to weigh in and support the PA PUC proposed rule.

The National Climate Assessment and the Nuclear Energy Solution

By Michael Krancer
Follow: @MikeKrancer 

The White House released on Tuesday the long-awaited Third National Climate Assessment, Climate Change Impacts in the United States (“Assessment”), required by Congress.   It contains some stunning findings and does not mince words.   In the words of John Holdren, the White House Science Advisor, this is the “loudest alarm bell to date” on the need for climate action change.

The Assessment is the result of a prodigious and significant scientific exercise.  It is the product of the 60-person Federal Advisory Committee of distinguished scientists and other experts who oversaw the development of the Assessment, and an intense peer and public review process.  The bottom line is that climate change is here now, and time is running out to do something about it.

As can be predicted, the Assessment has received some push-back from the Cato Institute and others.  But regardless of whether one can nit-pick the 800-page report, one thing is for certain—we can do something about climate change here in America right now.  We can make sure our existing nuclear generation fleet remains intact and healthy.

Nuclear power is the zero-carbon workhorse of our electricity generation fleet.   Every time we lose a healthy nuclear plant, we are shooting ourselves in the foot on carbon emissions.  Climate scientists are telling us how critical it is to maintain our nuclear power capabilities in the face of the challenges that the National Climate Assessment talks about.  This important point should not be lost on those who call themselves environmentalists or “Greens.”  We simply will lose the battle to climate change if we surrender on nuclear power.

Germany is an object lesson.  For purely political reasons, Germany suddenly announced the closure of its nuclear power plants.  The result: carbon emissions from Germany are booming and Germany has gone from an electricity exporter to an electricity importer virtually overnight.  The irony: neighboring France has a healthy and safe nuclear power sector and Germany will import power from it.

The release of the Climate Assessment coincided with the Monday roundtable event in Philadelphia of Nuclear Matters. Nuclear Matters is a bipartisan effort co-chaired by former Senators Evan Bayh and Judd Gregg whose mission is to foster discussion and inform the public about the clear benefits that nuclear energy provides to America; raise awareness of the economic challenges to nuclear energy that threaten those benefits; and to work with stakeholders to explore possible policy solutions that properly value nuclear energy as a reliable, affordable, and carbon-free electricity resource that is essential to America’s energy future.

I contributed an op-ed article to The Philadelphia Inquirer that points out those benefits, with a particular focus on how they impact the Commonwealth of Pennsylvania.  Click here to read my op-ed.

A prime issue for nuclear power is the “free rider” problem.  Nuclear power provides the clear, simultaneously delivered benefits of: (1) extraordinary high reliability both with respect to the plants themselves and to the grid; (2) zero-carbon emissions power; and (3) being an economic engine of direct and indirect employment. However, distortions in the marketplace fail to place any market value on those critical, irreplaceable, and unique features of nuclear power.  I have discussed these points in more detail in my op-ed, and in an article I wrote for Forbes.com, which can be accessed here.

So if the National Climate Assessment offers sobering prospects, the potential of the U.S. and world nuclear power fleet provide off-the-shelf promise and good news, and even an antidote.  Our challenge is to make sure that we make the right policy decisions so we don’t poison the antidote.

Obama Energy Official: Nuclear Plants Essential To Our Carbon Reduction Goals

By Michael Krancer
Follow: @MikeKrancer 

Peter Lyons, the Department of Energy’s (“DOE”) assistant secretary for nuclear energy, outlined the Obama Administration’s reasons for supporting nuclear power in the United States at the Platts 10th Annual Nuclear Energy Conference earlier this month.

Lyons, who is also a former Nuclear Regulatory Commission member and science advisor to the former Senator Pete Domenici, emphasized that nuclear power is a key contributor to our country’s goal of reducing greenhouse gas emissions (“GHG”). Moreover, he sounded the alarm that the growing list of perfectly healthy and well performing nuclear power plants being shut down for political and/or commercial reasons, or being slated for shutdown, is a serious climate-change threat.

He stated that he is gravely concerned that the loss of existing healthy nuclear plants will cost us dearly in terms of increased carbon emissions. The DOE studied a scenario where 30 percent of the county’s 100 reactors would be shut down. If those closures were to go ahead as per that scenario, there would be no way to meet our goal of cutting GHG emissions and, in fact, GHG emissions from the U.S. would skyrocket. Unsurprisingly, Lyons supplied that the DOE regards many of the nuclear plant closures currently on the calendar as premature.

The bigger problem, Lyons added, is that the market presently has no mechanism to sensibly recognize the value of carbon-free power generation, particularly nuclear power. He stated: “When well-run, clean [nuclear] energy sources are forced out of the marketplace due to a combination of reduced demand, low natural gas prices and market structure…our markets are providing the wrong signals.”

Nuclear power accounts for 20 percent of the electricity generated in the U.S. and for 64 percent of all zero-carbon emission sources. But many nuclear power plants are seeing their profits squeezed these days. There’s very little growth in the demand for electricity, thanks to energy efficiency, demand response, and a hobbled economy. Low gas prices have further reduced energy prices—and the profitability of the existing nuclear fleet.

Nuclear plants aren’t subsidized like other non-carbon-emitting energy plants are. Solar and wind are doubly subsidized; they receive direct taxpayer dollars—about $12.1 billion in the last round of the renewal of the Production Tax Credit. And in about 30 states and the District of Columbia, Renewable Portfolio Standard laws mandate that consumers buy a certain amount of wind and solar power.

Meanwhile, the U.S. has recently seen the closing of viable plants like Wisconsin’s Kewaunee, which in 2008 had won a license extension to 2033, and Vermont Yankee, which in 2011 had its operating license extended for 20 years. Replacing these two plants, even with new, highly efficient plants that burn natural gas, will lead to millions of tons of new carbon emissions. Many other plants are in danger of closing early as well.

This is terrible news for our GHG reduction goals. Just look at the case of Germany when it rushed to shutter its nuclear plants after Fukushima. The result: an estimated whopping increase of 15 million tons in GHG emissions if the gap in power demand is replaced by natural gas burning plants, and 30 million tons if the gap were to be filled with coal-fired plants.

How might policymakers and business people seek to prevent something similar from happening here? Lyons suggests measures that would help the markets recognize the value of carbon-free power generation—a carbon price or a cap-and-trade mechanism, in other words. A Stanford Woods Institute for the Environment review of survey data has shown that the public would favor those measures. The CDP, a U.K.-based environmental data group, recently reported that most big companies are ready, too.

For further insight from Michael Krancer on this issue, please read his recently published Forbes.com article by clicking here.

Top Climate Scientists To Environmental Groups That Oppose Nuclear Power: “Stop It!”

By Michael Krancer
Follow me @MikeKrancer 

Four top climate change scientists have directed a tour de force letter to world environmental groups advising them of an important fact: we cannot stop global warming without nuclear power.  The letter comes from Dr. Ken Caldeira, Department of Global Ecology, Carnegie Institution; Dr. Kerry Emanuel, Atmospheric Scientist, MIT; Dr. James Hansen, Columbia University Earth Institute; and Dr. Tom Wigley, Climate Scientist, University of East Anglia and the National Center for Atmospheric Research.

The letter is remarkable for its frank and logical discussion of not only science and policy but also reality and context, commodities that the authors urge their environmental group audience to grasp more of.   They state that continued opposition to nuclear power “threatens humanity’s ability to avoid dangerous climate change.”  Besides the obvious moral imperative of reducing global greenhouse gas emissions, there is a further moral underpinning to their argument.   The developing world will require more electric power to meet the needs of and advance the health and safety of a huge population, and our future generations have every right to that aspiration.   In a very cleverly turned sentence, they sum it up this way, “we can only increase energy supply while simultaneously reducing greenhouse gas emissions if new power plants turn away from using the atmosphere as a [GHG] waste dump.”

While renewables like wind, solar and biomass will play a role, it is unrealistic to think those sources will be enough.  In the “real world there is no credible path to climate stabilization that does not include a substantial role for nuclear power.”

No energy system is without downside risks, they correctly note.  However, numerous systems and advancements make today’s nuclear plants much safer.  As a former insider at a nuclear generation company I can vouch for that.  Furthermore, spent nuclear fuel can be effectively and safely managed by utilizing efficient consumption and disposal techniques.  I would add that it can also be addressed in this country by the federal government stepping up to do what it should have done long ago—proceed with a decision on the Yucca Mountain facility or provide an alternative.   The D.C. Circuit Court of Appeals has weighed in on that issue too by ordering the administration to follow the Nuclear Waste Policy Act and make a decision.

The bottom line is that “quantitative analyses show that risks associated with the expanded use of nuclear energy are orders of magnitude smaller than the risks associated with fossil fuels.”  The authors pointedly ask the environmental groups to base their decisions and advocacy on “facts, not on emotions and biases that do not apply to 21st century nuclear technology.”

The letter  goes on to say that, “The time has come for those who take the threat of global warming seriously to embrace the development and deployment of safer nuclear power systems” as part of the solution to global warming.  We cannot afford, they say, to turn away from nuclear power that has the potential to displace a large fraction of our carbon emissions.  In fact, our existing nuclear fleet in the United States has been doing just that for decades.   The U.S. Energy Information Agency says that U.S. carbon emissions avoided through nuclear power since 1995 total 11,879 million metric tons.  Moreover, numerous studies have shown that lifecycle carbon emissions from nuclear power are comparable to renewable power sources.

The scientists wrap up with the exhortation that “the time has come for a fresh approach to nuclear power in the 21st century” and by asking the environmental groups to “demonstrate [your] real concern about risks from climate change by calling for the development and deployment of advanced nuclear energy.”

At the end of the day, the scientists’ letter is a lesson and exhortation to all of us.

The text of Drs. Caldeira, Emanuel, Hansen, and Wigley letter can be read Here.

Nuclear Power is Critical for America’s Low Carbon Emissions Strategy

By Michael Krancer
Follow me @MikeKrancer 

President Obama has embarked on an ambitious Carbon Action Plan, which I recently wrote about in a July 2013 Blank Rome energy alert.  While there is no “silver bullet” for reducing carbon emissions in the U.S., one thing is for sure: the contribution of nuclear power is critical to achieving carbon emissions reductions.  Since long before the first shale gas well was drilled, nuclear power generation has shown its value in reducing America’s carbon footprint.  We are currently at our lowest levels of carbon emissions since 1994.  Consequently, nuclear power is and must continue to be an important keystone to any viable and realistic U.S. strategy to reduce carbon emissions in the future.

The general public agrees.  A February 2013 Bisconti Research Inc. survey reported that 68% of Americans are in favor of using nuclear energy for electricity production.  Additionally, more than 80% of Americans believe that nuclear energy will be a key component in meeting our clean energy goals.

We have the safest and most efficient and reliable nuclear generation industry in the world.  Nuclear power generation is 100% free of carbon emissions, produces low-cost power 24/7/365, and now supplies about 20% of the United States’ electricity overall—more than any other energy source in seven states.  A pellet of nuclear fuel the size of the tip of a pencil eraser produces the same amount of energy as 17,000 cubic feet of natural gas, 1,780 pounds of coal, or 149 gallons of oil.  Nuclear plants operate more efficiently than any other type of power generation—as measured by “capacity factor” (actual energy production versus possible energy production during the year)—and have operated on average at about 90% capacity factor for over a decade.  Also, because fuel price is quite small for nuclear power—a mere 28% as compared to 80% to 90% for coal and natural gas plants—power from nuclear plants is significantly less subject to price instability.

I previously worked at a generating company with a substantial nuclear fleet, so I know first-hand that the men and women who operate those plants are the cream of the crop.  They operate those plants with safety as their number one priority.  A member of the Pennsylvania delegation to the U. S. House of Representatives, who was a retired Navy Admiral, had a great line when he was asked a question about nuclear plant safety from a clearly skeptical reporter.  He said something to the effect of, “For twenty years I went to sleep every night on ships with kids in their twenties running nuclear reactors downstairs and slept very comfortably and safely.  Next question.”

The federal government has to do more on the spent nuclear fuel repository situation.  Recently, at least two editorial boards have taken President Obama to task for saying he favors an aggressive carbon emissions reduction policy while simultaneously acting illegally, according to the holding of a federal appeals court, on not moving forward with an important part of that strategy—namely, the Yucca Mountain federal nuclear power plant spent materials disposal site, which has already been deemed safe.  We need to move that project ahead.  The federal government needs to satisfy its legal obligation to provide for a repository.  We need to make sure that there are no unnecessary regulatory bottlenecks to license extensions, uprates, and new nuclear power coming on-line, including new reactor designs and small reactors.  We need a regulatory process that is safety-focused and risk-informed.

The bottom line is that we need to keep America’s nuclear fleet humming, especially if we want to accomplish what the President has called our “moral duty” to lower carbon emissions.