Where Does EPA's ACE Proposal Leave Nuclear Power?

The Trump administration's Affordable Clean Energy plan (ACE) designates steps for states to manage performances of power plants with customized on-site targets, a boon to coal-fired power plants. Does this open the door assistance for the struggling nuclear power industry or has the Trump administration effectively thrown nuclear power under the bus?

nuclear powerThe nuclear power industry has faces severe headwinds in deregulated markets, where it must complete with natural gas and coal-fired plants, as well as renewable power sources, in a market where the equilibrium has become un-tethered in recent years due to a glut in the natural gas market brought on by hydrofracking and government subsidies for wind and solar power that did not so much unbalance the market so much as it simply ignored the carbon-free advantages of nuclear power.

With owners of huge nuclear power plants announcing closures of plants for economic reasons, allowing reliable power, regional tax contributions and hundreds of jobs per unit to end, the Trump administration has discussed two initiatives to re-balance the market. One of those initiatives involved a proposal to find a way to reward power plants for their reliability, specifically discussing plants that could store fuel on site – coal and nuclear power, specifically. With on-site storage of fuel, reliability could be guaranteed despite disruptions to supply that theoretically would not include wind, solar or natural gas sourced electricity.

That argument, however, was quickly abandoned as it would have relied on market intervention under statutes that were intended to be deployed only during national emergencies, such as a war, a natural disaster or an oil embargo.

Last week, a top official with the Federal Energy Regulatory Commission said the government with involvement from several agencies, including the National Security Council, the Department of Defense and the Department of Energy, was seeking to identify critical organizations, such as hospitals and military bases, as a way to prioritize or intervene in energy markets based on power sources that keep those operations going.

On Tuesday, however, the administration went public with the ACE plan that is intended to be the Trump administration's answer to the Clean Power Plan (CPP) which was proposed by the Obama administration primarily to limit harmful greenhouse gas emissions from the energy industry.

The CPP, which treated the nuclear power as an afterthought, also fell short of providing relief for existing nuclear power plants. It allowed credits for newly constructed nuclear power plants and capacity uprates at existing plants, but it did nothing to provide practical assistance to nuclear power plants that continued operations or extended their licenses at the same generation capacity as before.

The ACE proposal, which is entering a two month public feedback period prior to implementation, is designed to prop up the coal industry, according to reports, by allowing states to chose their own emissions control guidelines.

The four core ingredients to the ACE plan are to provide states with a list of options for creating their own emissions reduction plans, providing incentives for achieving efficiency improvements at operating power plants, granting states flexibility for when and how this gets done and allowing for on site definitions of the best practices from state to state.

The Environmental Protection Agency has said the plan will help lower carbon emissions, but the targets are not likely to approach the reductions set out by the previous administration's plan, which would have mandated a 32 percent reduction in CO2 emissions by 2030 compared with 2005 levels.

The EPA's analysis focused on economic benefits ACE provides compared to the CPP. Depending on levels of CO2 reductions targeted by the states, the ACE proposal saves businesses from $3.4 billion to $6.4 billion over the CPP, the agency said.

Today's proposal provides the states and regulated communities the certainty they need to continue environmental progress while fulfilling President Trump's goal of energy dominance,” the World Nuclear Association quoted EPA Acting Administrator Andrew Wheeler as saying.

It was unclear whether or not the initiative to study critical infrastructure had been abandoned or not, but the ACE proposal clearly bumped that plan out of the news cycle. 

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