During a press conference on Aug. 27 announcing the closure of Vermont Yankee nuclear power plant in Vernon, Bill Mohl, the president of Entergy Wholesale Commodities, said the decision to stop producing power at the plant was based on the economics of the plant, and not operational performance, litigation risks or political pressure.
"Simply put, the plant costs exceed the plant's revenues and this asset is not financially viable. Despite its excellent track record, Vermont Yankee is a single, small-unit nuclear station operating in a very challenging marketing environment."
Most challenging for Yankee was competition from producers using natural gas to power turbines to create electricity. Due to advancements in hyrdraulic fracturing, extraction companies have been able to exploit reserves in the Marcellus Formation, driving down the price of natural gas.
From 2003 to 2012, wholesale prices fluctuated between $48.59 per megawatt hour to $36.09 a megawatt hour, it hit a high of $80.56 in 2008, dropped to $46.68 in 2011 and then $36.09 in 2012.
Julien Dumoulin-Smith, an energy markets analyst for UBS, said he was not surprised by Entergy's decision. Earlier this year, Dumoulin-Smith had released a report stating the plant simply could not compete in the wholesale market.
"This plant almost had no chance given how low natural gas prices have gone," he told theReformer, shortly after Entergy's announcement.
Dumoulin-Smith said Yankee's retirement is a watershed moment for the nuclear industry.
For More Information visit @ http://www.reformer.com/localnews/ci_24092473/can-new-england-rsquo-s-energy-market-survive
No comments:
Post a Comment