NEI chief: More nuclear retirements to come in unregulated markets

Dive Brief:

The U.S. Nuclear Regulatory Commission last week issued the first new nuclear operating license in 20 years, but the head of the Nuclear Energy Institute predicted more of the nation's reactors in deregulated markets would be forced to close, Platts reports.
The Tennessee Valley Authority (TVA) received an operating license for its Watts Bar Unit 2 nuclear reactor last week, and is expected to begin operating the new unit next year.
But in deregulated markets, nuclear generation is struggling; NEI President and CEO Marvin Fertel told Platts he expects announcements of merchant closures in the months ahead.

Dive Insight:

At a news conference last week, Fertel called TVA's new license a "[h]allmark day for U.S. nuclear energy industry," but out of the spotlight, he was more reserved about the future of the resource.

"We're closing very safe, well-operated plants because of market dysfunctionalities," Fertel said. And he told Platts to expect more closures in the coming months, though how many remains unclear. "I'm hoping very few," he said.

While TVA's new license is indeed a milestone, it came on the heels of Entergy Corp. announcing its plans to shutter the 680 MW Pilgrim Nuclear Power Station in Plymouth, Mass., no later than June 1, 2019. Financial factors drove the decision, including tough market conditions, reduced revenues and increased operational costs.

At the same time, Exelon has said five of its Illinois plants are struggling, and the company is looking to make a decision on their future next year. Markets are looking to make changes that would more accurately value the carbon-free generation, but "we don't think some of this will happen fast enough to potentially save some plants," Fertel said.

But still, officials found room for celebration – after all, it's been two decades since the United States issued an operating license for a new nuclear reactor.

“Issuance of the operating license for the nation’s first new nuclear unit of the 21st century is the result of a good team completing a tremendous amount of hard work and complex testing the right way —safely and with quality — and demonstrating that Watts Bar 2 can be operated in a manner that ensures regulatory compliance,” Mike Skaggs, senior vice president of Watts Bar Operations and Construction, said in a statement.