In the heart of New Hampshire, a discussion on the future of energy is taking place, and it's a fascinating one. The state, known for its pleasant name "Nuclear New Hampshire," is contemplating a nuclear-powered future amidst rising electricity prices and increasing demand.
Governor Kelly Ayotte has put nuclear energy at the forefront of her energy policy, and the recent "nukefest" event at the Pease International Tradeport showcased the state's interest in exploring new nuclear technologies. But is this a wise move, and what does it mean for the residents of New Hampshire?
The Anti-CWIP Statute and Investor Risk
One of the key points raised by Attorney Donald M. Kreis, the state's Consumer Advocate, is the importance of the anti-CWIP statute. This law, adopted in 1979, ensures that investors bear the financial risk of new generation facilities, a lesson learned from the bankruptcy of the Public Service Company of New Hampshire due to Seabrook's construction delays and cost overruns. Kreis emphasizes that this statute is crucial in protecting utility customers from financial burdens.
Small Modular Reactors: A Promising Idea?
The focus of the "nukefest" was on small modular reactors (SMRs), which are seen as a potential game-changer in the nuclear industry. Rep. Keith Ammon (R-New Boston) likened the creation of SMRs to building airplanes, suggesting a more efficient and cost-effective process. However, financial analysts, like Michael Cembalest of J.P. Morgan, are skeptical. They question whether SMRs can be built affordably and whether they will provide a cost-effective solution for customers.
Levelized Costs and Volatility
When it comes to assessing the viability of new nuclear technologies, the levelized cost metric is often used. Estimates for new natural gas generation range from $55 to $85 per megawatt-hour, while SMRs are estimated to be much higher, between $141 and $200. This raises concerns about the affordability of SMRs. James Richards from the Nuclear Innovation Alliance suggests considering the long-term reduction in volatility that nuclear energy can provide, but this argument is not enough to dispel the skepticism surrounding SMRs.
Eversource's Take
Eversource, a key player in the state's energy landscape, was notably silent on its interest in nuclear power during the "nukefest." Their presentation highlighted the potential expense of new nuclear contracts and the continued reliance on natural gas, even with added nuclear capacity. This aligns with Kreis' perspective that new nuclear facilities may not bring down electricity rates.
Decarbonization and Stability
Despite the financial concerns, there are compelling reasons to pursue new nuclear facilities. As Kreis points out, nuclear power can advance decarbonization efforts and stabilize wholesale energy markets by providing a steady and reliable power source. This is especially relevant in a state like New Hampshire, where fuel diversity and predictability are important considerations.
Conclusion
While the idea of new nuclear facilities in New Hampshire is intriguing, it's essential to approach it with caution. The state's residents should be aware that the pursuit of nuclear energy may not result in lower electricity rates, and it's crucial to keep a close eye on the financial implications. As we navigate the complex world of energy policy, it's important to strike a balance between environmental goals and economic realities.
