DOE Secretary Perry Acts to Support U.S. Nuclear Power in the U.S.

Nuclear Power Industry

In a formal submission to FERC dated 28 September, Perry said the resiliency of the US energy grid depends on an "all of the above" mix of generation resources including "traditional baseload generation with on-site fuel storage" to withstand major fuel supply disruptions caused by natural and man-made disasters. The premature retirement of such resources is threatening that resiliency, he said.

Distorted price signals in FERC-approved organised electricity markets have resulted in under-valuation of the reliability and resiliency benefits provided by baseload resources such as coal and nuclear. It was time for the FERC to issue rules to "protect the American people from the threat of energy outages that could result from the loss of traditional baseload capacity", he added.

Market changes have resulted in a significant loss of traditional baseload generation, Perry said. Citing the Department of Energy's (DOE) January 2017 Quadrennial Energy Review and its recently published Staff Report to the Secretary on Electricity Markets and Reliability, he said coal and natural gas steam turbine plants had dominated actual and planned power plant retirements, followed by nuclear. He said the USA had lost 4666 MWe of nuclear capacity between 2002 and 2016. A further eight reactors, representing 7167 MWe, had announced retirement plans since 2016, not including reactors where early closure has been averted through state-level action.

Traditional baseload generation, with on-site fuel supplies and the ability to provide voltage support, frequency services, operating reserves and reactive power, is essential to provide resiliency during events like the Polar Vortex of 2014, and more recently hurricanes Harvey, Irma and Maria, Perry said. The FERC has already recognised the changing energy mix and that existing capacity markets are not providing a sufficiently reliable supply of electricity, Perry said. "Nevertheless, the fundamental challenge of maintaining a resilient electric grid has not been sufficiently addressed by the Commission or Commission-approved ISOs (independent systems operators) and RTOs (regional transmission organisations)," he said.

He noted that the commission's lack of a quorum earlier this year - which prevented FERC voting on regulatory matters from February to August - had "undoubtedly thwarted" the issuance of rules.