Ashes to Atoms?
A Top Federal Energy Official Looks Ahead…WAY Ahead
Through the 1990s and into the past decade, a solid majority share of Wisconsin’s electric generation capacity was in coal-fired power plants, with other fuel types bringing up the rear. But by 2011, a dramatic shift was in progress. Coal plants had dropped back to 44 percent of the state’s generation mix and natural gas, only 10 years earlier a high-priced commodity with the exhaustion of domestic supplies just over the horizon, had climbed to 36 percent. Nuclear-fueled plants had slid a bit, to a 9-percent share of generation resources, with hydro, wind, and biomass trailing at 3, 3, and 2 percent respectively.
A transition from coal is most certainly underway. And while some of the energy sources now clocking in at single-digit percentages are sure to expand their shares of Wisconsin electricity usage (not necessarily the same thing as in-state electricity production), the basic energy source most likely to grow in importance for the foreseeable future looks to be gas.
Earlier this spring, the Customers First! Coalition held its annual POWER Breakfast in Madison and a packed ballroom at the Concourse Hotel took in an hour of forward thinking from Lauren Azar, former utility regulator on the Wisconsin Public Service Commission (PSC) and now senior advisor to the secretary of the U.S. Department of Energy (DOE). Azar sees natural gas as the key to Wisconsin’s energy security for a long time—but not forever.
A Bridge Built on Shale
“In the end,” Azar told the Customers First! audience, “our ability to keep our electric rates at a place where we can compete globally is at the heart of our long-term economic future here in Wisconsin.”
In the 1990s, those rates were the lowest in the Midwest, but by 1997 and ’98, so were the expectations of getting through the summer without power interruptions for major industrial customers. Now, Wisconsin rates are the highest regionally, attributable to a combination of necessary infrastructure improvements and mandated environmental upgrades.
Appointed to the PSC by then-Governor Jim Doyle in 2007, Azar recalled that early in her tenure, prospects weren’t altogether bright. “I stayed up at night because I was worried about what we were going to do for energy supply.” That was before the discovery of huge natural gas reserves in shale formations of Ohio and the Northeast, the Northern Plains, Texas, and the Mountain West, all recoverable by hydraulic fracturing. “Of course now, five years later, the landscape is entirely changed and I think everybody can breathe a sigh of relief with regards to natural gas,” Azar said.
But not for the long term, which she defines as 40 to 60 years in the future, a time frame in which it will be essential, “thinking about the global economy,” Azar says, “to figure out how to keep our electricity prices low.”
As the top advisor to the secretary of energy, Azar is at the epicenter of what she calls a “clean energy revolution,” and she makes clear what she believes that means.
“When I say ‘clean energy,’ I want everybody to understand that includes natural gas and nuclear. We [the DOE] do a lot of work on small modular reactors, research and development on that, to try to make sure that those do get deployed.”
Not Your Father’s Nukes
The timing may seem inauspicious. Within the two weeks following Azar’s Madison visit, the Nuclear Regulatory Commission ruled a Texas nuclear project ineligible for licensing on grounds of foreign ownership; after spending some $70 million, Duke Energy dropped plans for two new nuclear units—while reportedly planning to recover the costs and even turn a profit from ratepayers; and the Virginia owners of Wisconsin’s Kewaunee plant shut it down for economic reasons, 20 years before the scheduled expiration of its operating license.
But small modular reactors (SMRs) offer advantages over the previous generation of big power plants. They cost far less than would be needed to replicate one of the large plants currently operating—perhaps $750 million compared with $5–10 billion. Built as prefabricated units, they could be added to a site as needed and they can be air-cooled instead of continuously circulating millions of gallons of water through a cooling system.
SMRs are also designed with passive safety systems, meaning the unit can shut itself down without its mechanical or electrical systems operating. The World Nuclear Association, a professional society, explains that traditional reactor safety systems depend on electrical or mechanical functions on command. But a fully passive safety design needs only physical phenomena—like convection or gravity—that operate without help from engineered components. That sort of design, the association says, would have prevented the 2011 Fukushima accident, where loss of electrical power led to loss of the plant’s cooling capacity.
Hoping to put five 180-megawatt SMRs in operation at a site in Oak Ridge, Tennessee, the DOE has committed to a dollar-for-dollar match with a consortium including more than a dozen generation and transmission cooperatives along with several major utilities and engineering firms with broad nuclear experience.
Commercial operation of the reactors—each one 83 feet tall and 13 feet in diameter—could begin within about nine years. Spent-fuel storage on-site is included in the design.
Ironically, the DOE-backed SMRs will occupy the site of the Tennessee Valley Authority’s Clinch River Breeder Reactor, a nuclear fuel recycling project the federal government abandoned in the late 1970s.
Azar sees limited means of ensuring long-term competitive electricity prices in Wisconsin. “When I look around the nation I see a number of states that have really significant native fuels for electricity generation that are inexpensive and they’re highly efficient renewable resources. In Wisconsin, not so much.”
“We’ve got biomass. As you know for fuels for biomass they’ve got to be relatively localized, and unless things have changed, it’s not cost-effective generation yet.” As for geothermal energy, it has potential in some locations. “I would be interested in talking to somebody at the commission to see how much more we could be taking advantage of geothermal and what the efficiencies are there,” Azar says.
“We’ve got some good hydro here but it’s probably not expandable because of environmental reasons,” she says, and “the efficiency of the solar here is marginal,” similar to New Jersey and Europe where solar is abundantly deployed but no match in terms of efficiency with solar in the American Southwest. “We’ve got good wind but only in very localized locations.”
Azar points out a long shot that could make an immense difference: “I just saw a map showing that one of the shale plays may come just on the eastern coastline of Wisconsin; they say they believe the shale play is under Lake Michigan and may hit the coastline. I would consider that a game-changer for Wisconsin if that’s actually true.
“Let me just tell you in other states, they’ve got shale plays, they’ve got great places for [geological] natural gas storage, they’ve got great places for compressed air storage, they’ve got fantastic solar, they’ve got good wind reserves. And when I look over the nation I actually see Wisconsin as one of the few states that doesn’t have really robust good, efficient, natural [energy] resources.”
Her bottom line: Small, modular nuclear generators look like a realistic choice for keeping power affordable and reliable.
Taking the Long View
“I worry about Wisconsin because I worry about the lack of native fuel sources,” Azar reminded the attentive Customers First! audience. “Natural gas is going to carry us a long way for many, many years, which I’m very thankful about, but for the long term we can’t count on natural gas. We need to figure out a different way to do it and it may be small modular nuclear reactors. I do not know the answer to that question; I certainly hope they take off and fly because that might be a good solution for Wisconsin. But we need to start thinking long-term here to make sure we’re globally competitive.”
Electricity is quite a bit more expensive elsewhere in the world, especially in Europe, so Wisconsin arguably is competitive on a global basis right now with its skilled work force, abundant generation, and the electric reliability problems of the late 1990s well and properly dealt with.
The job now is to see that it’s still that way 60 years down the road.—Dave Hoopman, director of regulatory affairs, Electric Division, Cooperative Network