![]() ![]() The wind industry says negative pricing occurs less frequently than Exelon claims and that there’s little correlation to wind output. The purple across parts of Wisconsin, Illinois and Indiana indicates negative prices, which Exelon cites as a major reason why its Clinton and Quad Cities nuclear plants are unprofitable. This heat map from the Midwest grid operator MISO shows real-time electricity prices at 6 a.m. Illinois Power told state regulators when proposing the plant in 1973 that it chose to build a nuclear plant - not coal - as a new baseload power supply because of its emissions profile. The plant’s developer, the parent of Decatur-based Illinois Power Co., evaluated a dozen sites before deciding on Clinton, which would have its own dedicated supply of cooling water - a 5,000-acre lake that remains a popular fishing site. Like most smaller cities in the area, Clinton is surrounded for miles by flat farm fields and grain silos and celebrates its connection with Abraham Lincoln, of whom there’s a statue in the town square. The plant is a 10-minute drive east of the central Illinois town of 7,000 for which it’s named. And perhaps as much as any of them, its 30-year history defines the highs and lows of the U.S. This is a broad industry problem," Dominguez said, rattling off names of many of the plants.Īmong them, Clinton is the newest. And more than a dozen others are at risk in the next decade, Marvin Fertel, executive director of the Nuclear Energy Institute, said at a conference last month. Already, operators of 11 nuclear reactors have closed or announced plans to shut down within the past several years. The Des Moines-based utility not only already owns more wind generation in Iowa, but also is a 25 percent owner of the Quad Cities plant slated for shutdown in 2018. The latest example is the $3.6 billion, 2,000-megawatt Wind XI project announced by Warren Buffett’s MidAmerican Energy Co. What’s not disputed is that the Midwest power grid is only going to see more wind - not less - in the coming years after Congress approved a multiyear extension of the PTC in December. "The vast majority of these negative prices appear to have no link to wind output," Goggin said. The paper’s author, Michael Goggin, AWEA senior director of research, recently re-examined PJM grid data for the past year and again said there is little correlation between the increase of wind output and negative pricing. Exelon was even voted out of AWEA in 2012 because of opposition to an extension of the federal production tax credit (PTC).ĪWEA published a white paper in 2014 that said wind energy isn’t causing off-peak electricity prices to go below zero, but Exelon is exaggerating the frequency of negative pricing and erroneously citing wind as the cause of it. ![]() The company and the American Wind Energy Association have a running war of words. The argument that subsidized wind energy is driving Exelon’s nuclear plants out of business isn’t a new one. "The common characteristic of both of those plants as opposed to the rest of the Illinois fleet is that they happen to be in regions where the transmission system is overtaken by negative price events brought on by subsidized generation." "That’s a huge issue for both Clinton and Quad Cities," Dominguez said. "It is the combination of gas prices that have lowered wholesale energy prices, and the distortive effect of congestion caused by subsidized generation that overwhelms these areas, particularly in the off-peak hours."Īccording to Exelon, nearly 10 percent of off-peak prices, which its Midwest nuclear fleet is subject to, trade below zero - a fact that he attributes to the penetration of wind energy. "If our problem was isolated and was natural gas, then we’d be talking about retiring 11 units, not three," Dominguez said in an interview. Even in the Midwest, where coal is still the dominant fuel, natural gas drives the power market.īut Joe Dominguez, Exelon’s executive vice president of regulatory affairs and public policy, said it is more than just cheap gas that has Clinton and the two-unit Quad Cities Generating Station bleeding red ink. Why is Clinton, which according to Exelon is the most competitive single-unit plant in the country, on the brink of closure?Ī big reason is the continued erosion of wholesale electricity prices tied directly to the surge in production of U.S. Chicago-based Exelon announced a week ago that the plant, which has continued to lose millions of dollars a year, would cease operating at the end of May 2017 ( EnergyWire, June 3). Fast-forward 17 years: Natural gas is back near 1999 levels, thousands of megawatts of wind energy is being added to the Midwest grid and electricity demand is stagnant. ![]()
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