The Opportunity Cost of Shutting Down Diablo Canyon Nuclear Power Plant

For nearly 35 years, Diablo Canyon Power Plant has pumped just over 2.0 gigawatts of electricity onto California’s power grid. Unlike hydroelectric power, which has good years and bad depending on rainfall, or solar and wind power which depends on sunshine and wind, Diablo Canyon’s nuclear reactors generate this electricity 24 hours per day, 365 days a year.

But Diablo Canyon’s days are numbered. In January 2018 California’s Public Utility Commission voted to shut it down. Barring legislation to countermand this decision, by 2025 Diablo Canyon will cease operations, making California a nuclear free state. Is this a good idea?

Anti-nuclear environmental groups, as reported at the time in the Los Angeles Times, “hailed the decision, which was expected after 17 months of filings and debate, but also were concerned about what type of energy sources would be used to replace Diablo’s electricity.”

Good question. Especially since environmental groups are the groups one might expect to be most concerned about “greenhouse gas,” and the only way wind and solar power can operate is by having natural gas power plants to spin into action every time the wind falters or the sun goes down.

The alternative to natural gas backup is to overbuild wind and solar farms and store the excess energy with batteries. An interesting comparison would be to see what battery storage capacity would be required to replace the power Diablo generates during off peak hours of 12 hours per day.

The following chart projects a $12 billion price tag, based on a cost of $500 million per gigawatt-hour of battery farm storage. This cost estimate relies on data from several parallel projects at the 2.0 gigawatt-hour Moss Landing energy storage facility currently under development on the Central California coast. 

While battery storage costs are declining rapidly, with some experts projecting prices at one-fifth current levels within 10-20 years, others are not so sanguine. And battery costs aren’t the only consideration. Balance of plant costs – siting, distribution infrastructure – and California’s obstructionist construction climate will also pile on costs.

How Many EVs Could Diablo Canyon Recharge Every Night?

If Diablo isn’t shut down, of course, it isn’t necessary to invest $12 billion (or more) in battery storage to scoop up sun and wind dependent intermittent renewable energy and save it for nighttime charging. But either way, assuming California’s policymakers achieve their goal of filling our roads with battery powered vehicles, how many miles could they travel based on tapping into 12 hours of Diablo Canyon’s 2.0 gigawatt output?

As the next chart shows, the metric we’re going to be getting used to when evaluating mileage efficiency from EVs is not “miles-per-gallon-equivalent,” but the far more descriptive kilowatt-hours per 100 miles. And based on US EPA data, most EVs on the road today require around 25 kilowatt-hours to travel 100 miles. That equates to 4 million miles per gigawatt-hour. Taking into account 12 hours of 2.0 gigawatt output from Diablo Canyon, that’s enough to power a fleet of EVs driving 96 million miles per day. How does that compare to the total mileage driven each day by Californians?

According to US Federal Highway Administration data, the Californians log per capita vehicle mileage of 9,053 miles per year. That means California’s nearly 40 million residents are driving nearly one billion miles per day. Nonetheless, Diablo Canyon alone could power enough EVs to put quite a dent into that total. Nearly 10 percent of all driver mileage could be powered by EVs charged overnight by electricity produced by Diablo Canyon.

To make the opportunity cost of shutting down Diablo Canyon even more stark, one might ask what the cost would be to use solar panels and batteries to replace Diablo Canyon’s off-peak nocturnal output? The next chart shows those estimates, based on a rock bottom price of $1.00 per watt of solar panels. That is a best-case number pretty much forever, since land acquisition, engineering, labor, racking, connectors, utility interties, distribution infrastructure – along with the price of the actual panels – make this a mature industry.

As an aside, the less said about wind power, the better. Wind power is an abomination, slaughtering birdsbats, and insects at a rate which would destroy the planet in a few years if it were ever developed to any meaningful scale, not to mention the visual blight, the hideous quantities of materials, or the physical and psychological illness the inescapable low frequency thrum triggers in humans and animals.

As shown above, it would cost about $18 billion to develop renewable assets using solar and battery technology to replace the overnight EV recharging capacity of Diablo Canyon. If California’s vehicles were electrified, this capacity is sufficient to power 10 percent of California’s automobile mileage. And this is exactly half the story – Diablo Canyon operates 24 hours per day, not just at night to charge EV batteries.

It is interesting – or depressing, depending on one’s ability to confront these scandalous miscarriages of policy with equanimity – to wonder why environmentalists, who think we have barely a decade to “decarbonize” before the planet is lost, are so intent on shutting down Diablo Canyon.

The only sane way to sell renewable energy is to make it cheaper than fossil fuel and nuclear power. But the flawed policies and phony accounting that are used to present renewables as competitive need to be replaced by honest analysis.

It should be obvious that if renewable energy was truly less expensive, every nation in the world would be turning to renewables instead of building, as fast as they possibly can, more coal, natural gas, and nuclear power plants.

The single most significant variable affecting the economic viability of intermittent renewable energy is storage costs. Maybe batteries will eventually come down in price to, say $50 per kilowatt-hour, i.e., $50 million per gigawatt-hour. And if and when that happens, maybe it will make economic sense to convert to 100 percent renewables. And maybe then, instead of having to sow fear and panic in the media, and weaponize brainwashed elementary school children for photo ops with politicians pushing “green” energy, states and nations will adopt renewables because they really are the cheaper alternative.

If we are entering the electric age, where not only lights, PCs, refrigerators and air conditioners use electricity, but also space heaters, water heaters, cooktops, and vehicles – not to mention cyber currency – then we’re going to need more electricity at a time when “renewables” aren’t ready for prime time. And if the urgent imperative to rush into this decarbonized electric age is to supposedly save the planet, why are we shutting down Diablo Canyon?

In the meantime, Diablo Canyon is a sunk cost. Ratepayers long ago covered the construction bill for Diablo Canyon. But these reactors, instead of continuing to generate 2.0 gigawatts of clean, carbon free electricity for decades to come, are going to be shut down and subject to expensive decommissioning costs. Those who sincerely believe in the need to decarbonize energy need to join with those who support economically sound energy policies, to demand Diablo Canyon stay open.

This article originally appeared in the California Globe.

Nuclear power receives its death sentence in California


In a unanimous vote, state regulators agreed Thursday to a plan that will see the closing of the last nuclear energy power plant in California.

  • The Diablo Canyon nuclear facility will begin shutdown operations starting in 2024.
  • The power plant’s operator, Pacific Gas & Electric, says the facility will soon become an economic liability for the company because of dramatic changes in the state’s energy landscape.
  • Critics of the shutdown say it will lead to the use of more natural gas in the state’s power grid.
  • Environmental groups hailed the vote but want assurances that greenhouse gas emissions will not rise as a result.

Click here to read the full article from the San Diego Union-Tribune

Brexit’s Energy Lesson for California


Brexit“California’s largest utility and environmental groups announced a deal Tuesday [June 21] to shutter the last nuclear power plant in the state.” This statement from the Associated Press reporting about the announced closure of the Diablo Canyon nuclear power plant should startle you. The news about shutting down California’s last operating nuclear power plant, especially after Pacific Gas & Electric Co. (PG&E) had sought a 20-year extension of the operating licenses for the two reactors, is disappointing—not startling. What should pique your ire is that the “negotiated proposal,” as the Wall Street Journal called it, is between the utility company and environmental groups—with no mention of the regulators elected to insure that consumers have efficient, effective and economical electricity.

Who put the environmental groups in charge? Not the California voters. But unelected environmental groups—and their bureaucratic friends in various government agencies—have been dictating energy policy for the most of the past decade. Regarding the “negotiated proposal,” WSJ points out: “The agreement wades deeply into intricate energy procurement, environmental and rate-setting matters that are normally the exclusive jurisdiction of state agencies.”

California has a goal of generating half of its electricity from renewable sources by 2030 and environmental groups are calling for the state officials to replace Diablo’s generating capacity with “renewable power sources.” Realize that this one nuclear power plant provides twice as much electricity as all of California’s solar panels combined.

Bloomberg Intelligence analysts’ research concluded that PG&E “would need 10,500 megawatts of new solar installations to replace all of Diablo Canyon’s output” and that, without including potential costs of new transmission lines or back-up resources for solar, will cost $15 billion—with totals, including decommissioning, estimated at $20 billion.

The Bloomberg report states: “PG&E will ask that customers make up any shortfall.”

Actual costs, Bloomberg says: “could be lower because the company expects to compensate for lower demand and replace only part of the production.” Why will there be lower demand? The WSJ explains: “the plan calls for new power sources to furnish only a portion of the electricity that Diablo Canyon generates, assuming that greater energy efficiency in the future will also curb some power demand.”

All of this is announced while California is experiencing, and expecting more, blackouts due to “a record demand for energy” and because “there just aren’t enough gas pipelines for what’s needed,” according to CNN Money. “Southern California,” reports WSJ, “is vulnerable to energy disruptions because it relies on a complex web of electric transmission lines, gas pipelines and gas storage facilities—all running like clockwork—to get enough electricity. If any piece is disabled, it can mean electricity shortages. Gas is the state’s chief fuel for power generation, not coal. But the pipelines can only bring in about 3 billion cubic feet of working gas a day into Southern California, below the daily demand, which gets as high as 5.7 billion cubic feet.”

California’s Independent System Operator, which runs the state’s power grid, therefore, has warned of “significant risk” that there may not be enough natural gas which could result in “outages for as many as 14 summer days.” CNN Money reports: “Natural gas has played a bigger role for California as the state has tried to phase out coal and nuclear power”—environmental groups oppose the use of all of these three power sources.

It is expected that Diablo Canyon’s generating capacity will, in part, be replaced with more natural gas—which is good news for fracking. Eric Schmitt, vice president of operations for the California Independent System Operator, said: “California needs more flexibility in how it generates power so it can balance fluctuating output from wind and solar projects. Gas plants can be turned off and on quickly.”

As coal-fueled electricity has been outlawed in California, and environmental groups have pushed to close nuclear power plants, and routinely block any new proposed natural gas pipelines, black outs will become frequent. California’s energy demand doesn’t match solar power’s production.

This dilemma makes “energy efficiency” a key component of the environmental groups’ decrees—which parallels the European Union’s policies that were a part of Britain’s “exit” decision (known as “Brexit”).

When the EU’s energy efficiency standards for small appliances were first proposed, then German EU energy commissioner, Gunther Oettinger, according to the Telegraph, said: “All EU countries agree energy efficiency is the most effective method to reduce energy consumption and dependence on imports and to improve the climate. Therefore there needs to be mandatory consumption limits for small electrical appliances.” In 2014, the EU, in the name of energy efficiency, sparked public outcry in Britain when it banned powerful vacuum cleaners with motors above 1600 watts. It then proposed to “ban high powered kettles and toasters” as part of the “Eco-design Directive” aimed at reducing the energy consumption of products.

The EU’s Eco-design Directive’s specific requirements are to be published as “Implementing Measures”—which, according to Conformance.co.uk, are made “as European Law Commission Regulations.” It explains that this process allows the directives to “enter into force in all the member states without requiring a transcription process in their National Law. Thus they can be issued much more quickly than the usual Directive Process.”

When the EU’s high-powered toaster/tea-kettle ban was announced, it became “a lightning rod for public anger at perceived meddling by Brussels”—which was seen as “intruding too much into citizens’ daily lives.” When the ban was announced, retailers reported a spike, as high as 95 percent, in toaster and electric tea-kettle sales. The European overreach became such ammunition in Britain’s Brexit referendum, that Brussels stalled the ban until after the election and engaged in a now-failed public relations exercise with “green campaigners” to speak out in favor of the toaster and tea-kettle regulations that were believed to have “considerable energy saving potential.”

The Brits didn’t buy it. It is reported that top of the list for “leave” voters were “EU Rules and Regulations.” Matthew Elliot, chief executive of the Vote Leave campaign said: “If we vote remain we will be powerless to prevent an avalanche of EU regulations that Brussels is delaying until after the referendum.”

Brussels’ toaster and tea-kettle ban, which were perceived as an assault on the British staples, has been called “bonkers” and “too barmy to be true.” Specifically addressing the ban, Elliot said: “The EU now interferes with so many aspects of our lives, from our breakfast to our borders.” David Coburn, a UK Independence party MEP from Scotland, who recently bought a new toaster and tea kettle grumbled: “I think I must have bought a euro-toaster, I have to put bread in it five times and it’s still pale and pasty. Perhaps it’s powered by windmills. And the kettle? Watching a kettle boil has never been so boring.”

While energy efficiency directives banning Keurig coffee makers would be more likely to draw similar ridicule from Californians, there is a lesson to be learned from the Brexit decision: too much regulation results in referendums to overturn them. It is widely believed that, with Brexit and new leadership, many of the EU’s environmental regulations, including the Paris Climate Agreement, will be adjusted or abandoned.

More and more Americans are reaching the same conclusion as our British cousins about the overreach of rules and regulations. As Coburn concluded: “What we want is to let the free market reign, not this diktat by bureaucrat.”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.