Baseload Choices are Tough: They Will Get Tougher

Berkeley Research Group’s authors used GIPSY™, a proprietary electric sector planning model, to evaluate the long-term interplay among U.S. Environmental Protection Agency greenhouse gas policy, retirement of the existing nuclear fleet, and the difficult baseload choices facing U.S. power system planners and investors after 2030.

1. Policy Background/Restricted Baseload Options -

On September 20, 2013, the U.S. Environmental Protection Agency (EPA) released a revised proposed rule regulating carbon dioxide (CO2) emissions from new fossil fuel–fired electric generators under the Clean Air Act’s New Source Performance Standards (NSPS). NSPS regulations are effective for new sources as soon as the proposed rule is published in the Federal Register. The emission standard that EPA has proposed effectively mandates partial carbon capture and sequestration (CCS) for new coal-fired generators, banning new coal-fired power plants in the United States that are uncontrolled for CO2. Expected low natural gas prices in the near term make new uncontrolled coal uneconomical; however, new uncontrolled coal could be economical 15 years from now (ignoring CO2 restrictions) depending on the long-term natural gas price path. It is difficult to predict confidently natural gas prices decades into the future. Thus, EPA’s NSPS for CO2 on new coal-fired generators represents a restriction on long-term baseload investment decisions.

The retirement of the existing U.S. nuclear fleet further complicates the baseload picture. The 100-gigawatt U.S. nuclear fleet must be licensed by the Nuclear Regulatory Commission (NRC) in order to operate. Licenses are issued for 40 years; in many cases, the NRC has renewed them for an additional 20 years. We assume the renewals to 60 years will be routine. These 20-year license renewals will begin to expire in 2030, and by 2050, over 90 percent of today’s nuclear fleet will be in the decommissioning process. It remains an open and debated question whether the NRC will renew nuclear reactor operating licenses to 80 years.

Please see full White Paper below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  Carbon Emissions, Energy, Environmental Policies, EPA, Greenhouse Gas Emissions

Published In: Energy & Utilities Updates, Environmental Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Berkeley Research Group, LLC | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »