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Vermont's only nuclear power plant has shut down for good

Vermont Yankee Nuclear Power Plant, Unit 1
Vermont Yankee Nuclear Power Plant, Unit 1
(Nuclear Regulatory Commission)
  1. Vermont's only nuclear power plant, Vermont Yankee, shut down for good on Monday after 42 years of operation.
  2. The reason? Cheap natural gas made the plant uneconomical to keep open. A reactor in Wisconsin closed in 2013 for similar reasons.
  3. The plant provided about 4 percent of New England's electricity. It will be replaced by natural gas, wind, efficiency, plus hydropower from Quebec.
  4. The US still has 99 commercial nuclear reactors left, producing roughly 19 percent of the nation's electricity. But more could close in the years ahead — a potential setback for efforts to slow climate change.

Why Vermont Yankee shut down

Vermont yankee

The Vermont Yankee nuclear reactor is located in Vernon, Vermont. (Photo by John Nordell/The Christian Science Monitor via Getty Images)

According to the plant's owner, Entergy, it mainly came down to economics — and the low price of natural gas.

The 650-megawatt Vermont Yankee Nuclear Power Station had been in operation since 1972, supplying about 35 percent of Vermont's electricity over that period. (Like all nuclear power plants, it didn't emit any carbon-dioxide or other air pollutants.)

In theory, the reactor could have kept running for years to come. It was licensed by the federal government until 2032. And, two years ago, Entergy won a legal victory against Vermont officials who tried to close the plant early. Nuclear opponents have long raised safety concerns about the site, but haven't been able to shut it down.

What ultimately killed the plant was competition from other energy sources. The US fracking boom has created a glut of cheap natural gas — and New England has been using more and more gas for electricity in recent years, per the Energy Information Administration:

(Energy Information Administration)

That posed a problem for Entergy. It costs money to operate and maintain a nuclear power plant. But cheap natural gas (plus wind and efficiency) have been pushing wholesale electricity prices in New England down to historic lows. Entergy didn't think the plant could remain profitable in future years.*

So, in 2013, Entergy announced it would shut the reactor down. Since this was a big power plant, the state needed to take a number of steps to ensure there were no outages. Vermont lined up power from Quebec's hydroelectric plants. Transmission lines were upgraded. Further efficiency measures were taken to reduce overall demand for power.

Finally, around noon on December 29, operators inserted control rods into Vermont Yankee's reactor core and stopped the nuclear reaction process. The plant shut down. The lights stayed on.

* (Note: Entergy is an independent "merchant generator" selling electricity in competitive wholesale markets, so it can't recoup the costs of repairs through regulated rate increases the way power companies in some states can.)

What will replace nuclear? Natural gas, wind, efficiency.

New England can survive the closure of Vermont Yankee, which provided about 4 percent of the region's power. The bigger issue is that cheap natural gas is driving a lot of other older power plants out of business, too. Dominion Energy Resources is planning to retire a big coal plant in Salem, Massachusetts, for one. All told, some 1,396 megawatts will come offline between 2013 and 2016:

(Energy Information Administration)

To help replace that lost power, New England is planning to add another 1,193 MW of electricity in the next few years — about half from natural gas, and one-third from wind turbines:

(Energy Information Administration)

A big portion of electricity will also be imported from hydroelectric plants in Quebec.

Perhaps just as significantly, New England is improving its energy efficiency so that it uses less electricity overall. ISO New England, the local grid operator, estimates that the region's electricity consumption will barely grow between 2014 and 2023 as a result.

Still, there's a lot of infrastructure to tweak. Companies will have to build new pipelines to accommodate higher gas demand. And Vermont lawmakers are now debating whether to build a new natural gas plant in the state. One problem? Natural gas prices have a tendency to spike in New England during the winter, leading to higher electricity bills.

Another complication: Natural gas is still a fossil fuel — and produces carbon-dioxide emissions when burned (less than coal, but more than nuclear). And Vermont has set a goal of getting just 10 percent of its energy from fossil fuels by 2050 to help address climate change. Replacing a nuclear plant isn't always so easy.

Dismantling a nuclear plant is a complicated process

In the meantime, Vermont has to deal with the shuttered plant. Vermont Yankee employed about 600 people, and half of that workforce will be cut starting on January 19, 2015.

Entergy, for its part, is turning in its operating license and beginning the long, slow process of decommissioning the plant. That means dealing with tons of radioactive material: not just the plant's spent fuel rods, but also various materials that have picked up lower levels of radioactivity — including, potentially, the reactor vessel, the fuel-rod casings, various bits of scrap metal and even old clothing. That waste can’t just be dumped in regular landfills; it all needs to be disposed of properly. (Here’s a graphic breaking down the various types of waste.)

Decommissioning Vermont Yankee is expected to cost some $1.24 billion in all, though it won't happen immediately. For now, Entergy will let the radioactive components cool — and dismantling won't happen until the 2030s or 2040s. The company has set aside a decommissioning fund for this endeavor that's currently worth about $642 million, and is expected to grow over time.

US nuclear plants keep closing — potentially bad news for climate change

The San Onofre nuclear power plant in California closed in 2013 (David McNew/Getty Images)

This is officially a trend. Over the past two years, US power companies have announced the retirement of five nuclear reactors — in Florida, Wisconsin, two in California, and now Vermont.

That still leaves 99 reactors providing 19 percent of the nation's electricity — all without emitting the greenhouse gases responsible for global warmingBut some of these remaining reactors could also face pressure to close in the years ahead, as this paper by Doug Vine of the Center for Energy and Climate Solutions explains.

About half the nation's nuclear plants are owned by independent "merchant generators" who sell electricity in competitive wholesale markets. Unlike regulated utilities, they don't get a guaranteed price for the electricity they sell. And they've been hit hard by competition from cheap natural gas and wind. That's what killed Vermont Yankee, and it's the reason Dominion recently gave for closing a reactor in Kewaunee, Wisconsin.

Meanwhile, there aren't a lot of replacements on the horizon: Only five new reactors are slated to get built in the foreseeable future: two in Georgia, two in South Carolina, and one in Tennessee. (New reactors are mainly being built in regulated states where utilities can recover their costs through rate hikes.) Some operators have gotten permission to ramp up the amount of electricity their nuclear plants produce — known as "uprating" — but, for the most part, the economics have become tough.

And that's potentially bad news for climate change. Some of the shuttered reactors are being replaced, at least in part, by natural gas. If even more nuclear reactors have to close in the years ahead, it will be far more difficult for the US to keep cutting its carbon-dioxide emissions. A separate recent report by the EIA found that US emissions could rise an additional 4 percent in the years ahead if existing reactors continued to face tailwinds:

In his paper, Vine notes that the electricity that comes from all of the nation's existing nuclear reactors is currently undervalued — it's a large source of carbon-free electricity, but that doesn't count when it has to go up against cheaper fossil fuels like natural gas. A carbon tax or price on carbon, which many economists recommend as a way to deal with climate change, would put many of these plants on a firmer footing.

A carbon price wouldn't necessarily make it more economical to build new nuclear power plants. Those tend to take a long time to build — taking from 8 to 10 years to plan and construct — and are extremely expensive. They also tend to attract controversy and are facing ever more stringent safety requirements. (Not to mention all the still-unresolved questions about nuclear waste.)

Still a carbon tax might give a leg up to the nation's existing plants — which are currently a large source of carbon-free electricity at risk of dwindling in the years ahead.