Opinion: States Could Resolve Exelon’s Dilemma With a Modest Temporary Clean Energy Investment

Nuclear Regulatory Commission file photo/flickr.com

Earlier this year Exelon announced the early retirement of four nuclear reactors and, in a recent conference call, the CEO commented on rumors that Exelon was considering separating its generation business from its utilities business.

In a guest commentary [“Is Exelon Spinoff Prelude to a Nuclear Bailout,” Maryland Matters, Dec. 10], Tim Judson expressed concern that this was a prelude to a state bailout of nuclear and that states would be better off investing in 100% renewables. We disagree.

Our goal is the same as Gov. Larry Hogan’s: sustainable, zero greenhouse gas emission, or GHG, electric power as soon as possible. The empirical evidence in favor of baseload nuclear is impressive. Of the eight largest clean electric power grids around the world (France, Quebec, Ontario, Sweden, Norway, British Columbia, Paraguay and Switzerland) some combination of nuclear and hydro delivers 80% or more of the power.

In the 1970s, because of Arab oil embargoes, France decided to eliminate its dependency on oil for electricity generation. Over a 12-year period France built a fleet of 37 nearly identical nuclear plants resulting in an electric power system that is 80% nuclear, 10% hydro and 10% fossil. Today, 40 years later, France has the lowest cost electricity in Europe. France could eventually eliminate the last 10% fraction of fossil fuel by adopting demand management of electric vehicle charging.

Ontario, Canada, is an example of another successful transition. In 2005, Ontario’s grid GHG emissions were 250 grams(CO2)/kWh, 70% of PJM’s today. In 2019, its greenhouse gas emissions were 25 g/kWh. Today, Ontario has 94% carbon-free electric power, achieved by replacing coal primarily with nuclear.

In addition, Ontario is leading the development of (U.S. designed) small modular reactors. Ontario’s dilemma is that it is forced to curtail (shut down) 25% of its wind, selling another 25% at deep discount prices. This is clean electric power, already paid for – yet the cheapest solution is to discard half of it.

The result is higher-than-necessary Ontario electricity prices. Today, Ontario is considering reforming its electricity markets to sell excess intermittent electricity at low wholesale prices (subject to availability) for electric vehicle charging, hydrogen electrolysis and off-peak heating.

Conceptually, intermittent energy has value on a high-carbon grid; whenever the wind blows, fossil fuel generators are throttled down to reduce emissions. Conversely intermittent energy has little value on a reliable low-carbon grid. The fundamental barrier is large scale intermittency, occasional long periods when there is little wind and solar generation — a low wind summer, the cloudy week.

Bridging these periods with any form of storage is, in most jurisdictions, prohibitively expensive. Around the world there is no empirical evidence of a closed system using intermittent generators that provide more than 30% of average power. So getting to zero greenhouse gas is unclear.

The 100% renewables argument is based on modeling and should be regarded with skepticism because the models have not been validated. Engineering quality models are validated by comparing model results with empirical data to show that models accurately reproduce variability, curtailment and firm capacity observed in real systems over multiple years.

Unvalidated, models can obscure variability through inappropriate averaging and assumptions of independence, making intermittent generators appear less variable and more reliable than they really are. Nevertheless, existing models are useful in making relative comparisons among system configurations. A recent Princeton Study reveals that the introduction of some dependable low-carbon generators (e.g. nuclear, hydro) substantially reduces the cost of low-carbon systems.

Exelon complains that today’s electricity wholesale markets inadequately value dependability. True. Exelon also complains that electricity wholesale markets place no value on clean. True. No new clean generation is currently cost competitive with natural gas when all system integration costs are considered.

Exelon’s complaints will eventually be resolved through increased natural gas prices and market reform which will include more sophisticated valuation of the firm capacity of intermittent generators on real systems; greater dependency on more sophisticated capacity markets; a national clean energy goal; and environmental valuation such as a carbon tax or cap-and-trade schemes; and reorganization of our institutions to support more rational whole system design.

Exelon’s dilemma is that none of this will happen soon.

Politicians view clean energy subsidies as an investment. So which investment is likely to achieve the goal of reliable zero greenhouse gas electric power at a reasonable cost? Exelon’s existing dependable nuclear plants could be saved with a temporary investment on the order of 1 to 2 cents/kWh. For comparison, Maryland’s commitment to undependable offshore wind commitment was 13.2 cents/kWh (in 2012 dollars) for 20 years.

Maryland also has the option of following former EPA chief Carol Browner’s suggestion [“It’s Time for States to Determine Their Own Clean Energy Futures,” Maryland Matters, Dec. 4] and plan its own clean energy future. Choose the fixed resource requirement option and build additional nuclear reactors at Calvert Cliffs to become capacity independent of PJM. Voila! Zero greenhouse gas electric power; no games; no need to assume somebody will figure out how to deal with no wind, no sun, no power.


The writer is a professional engineer whose day job used to be leading teams that developed new systems for the Pentagon. For the past 10 years he has been the chairman of the Future of Energy Initiative.