Wednesday, December 26, 2012

Counting Down The 12 Most Important Energy Facts Of 2012: Part 1

This year has been an extraordinary, largely good news energy year, but with a couple notable exceptions. Over the next 4 days, I will countdown my 12 top energy facts of 2012.

Energy matters to us all, because it shapes, for better or worse, our economy, environment, and national security. Let's get to it.

12. Nuclear pain in old and new plants in 2012 made it clear that nuclear power is not being reborn, but instead may be dying, in the US.  The most shocking development was Dominion's announcement that it was closing a nuclear plant that runs well in Wisconsin.  That was shocking news because most had assumed that a nuclear plant would run once built for 60 or more years, unless it had major mechanical problems.

Dominion's closure decision proved otherwise. In fact, the Dominion nuclear plant is losing money, despite operating well. It's operating costs of 5 cents per kilowatt-hour make it uneconomic in today's low-priced competitive wholesale electricity markets.

The Dominion decision to close a well-run nuclear plant raises a question: will other sound nuclear plants close early if low wholesale market prices persist?  That was not a question in any mind until 2012.

Adding to the nuclear pain is the bad news coming from Georgia, where Southern Company is using its monopoly to finance and build two, new nuclear reactors.  Not surprisingly to those with a passing familiarity with the challenges of safe nuclear construction, an official monitoring report filed with regulators in Georgia finds that the plants are already 2 to 4 years behind schedule.  Costs are ballooning.  But why worry?

Monopoly power means that consumers already have been forced to pay for a couple years for these two nukes that may operate in another 8 years or so.  That's right consumers will likely pay for these plants for 10 years before they get the first kilowatt-hour of electricity.  It's good to have a monopoly but painful to be served by one.

All this nuclear pain in 2012 is bad energy news, for an economically competitive nuclear industry would be a huge boost for our economy and environment.

11. While nuclear power in the US recedes, sales of electricity vehicles (EV) in the US tripled in 2012, reaching more than 50,000 cars.  Rising electric vehicles sales were rooted in new all electric and plug-in models reaching the market and gasoline costing more than ever.

By the end of 2013, the number of electric vehicles on US roads may well exceed the number of CNG vehicles, as progress remains glacial in getting more CNG vehicles operating.

The future of electric vehicles is bright, as long as EV manufacturers keep improving range and driving down costs over the next decade.  Indeed, electric vehicles may well be the biggest change in energy markets during the next 10 years.  The success of EVs would be bad news for oil but good news for all the fuels that make electricity, power generators, and electricity utilities that deliver the juice.  In the energy world, EVs are a chance for renewables, natural gas, nuclear, and coal together to take on oil and grab market share.

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