By MATTHEW L. WALD October 23, 2012
THE conventional wisdom about nuclear reactors is that they are expensive to build but cheap to run.
But electricity on the wholesale market is so inexpensive, its price depressed by cheap natural gas, that some reactors may not have enough revenue to justify needed capital expenditures. Experts say that as a result, the nuclear industry may be nearing its first round of retirements since the mid-1990s.
On Monday, Dominion, which is based in Richmond, Va., announced it would close its plant in Kewaunee, Wis., which it had been trying, unsuccessfully, to sell for about a year. It had intended to buy more units in the Midwest and gain efficiencies by operating a fleet there, but found it could not do so.
When Dominion bought the plant, in 2005, it signed agreements to sell the plant’s output at rates reflecting a strong market for electricity. As those agreements expire, with a projection for continued lower prices, it is “uneconomic for Kewaunee to continue operations,” the company said.
That could be a harbinger of more closings, but it is not the only trouble sign for the industry.Share This Post