Wind subsidies threaten to shut down nuclear plants, warns energy exec

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Michael Bastasch DCNF Managing Editor
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Subsidies for wind power could lead to the shutdown of nuclear power plants, warned Exelon Corp. CEO Christopher Crane.

“What worries me is if we continue to build an excessive amount of wind and subsidize wind, the unintended consequence could be that it leads to shutting down plants,” Crane told the Chicago Tribune, adding that states which have subsidized wind power might see jobs disappear if nuclear plants shut down.

Tax credits for wind keep turbines running at times when there is no demand for power which drives down the price that Exelon charges for nuclear power, meaning that in wind heavy states the company pays customers to take their power.

A report by the NorthBridge group found that this “negative pricing” of electricity from wind subsidies means less investment will go into conventional power generation which imperils the reliability of the electrical system.

“The failure of wind generators to curtail output when wholesale prices approach zero has both short term and long term negative consequences,” reads the report. “In the short term, the failure of wind producers to curtail output makes it more difficult for system operators to maintain reliability, and also makes it more costly for them to operate the regional electric grid.”

However, wind power advocates disagreed with Crane’s comments.

“Exelon made a bet on the electricity spot market just like California did 10 years ago. When prices went down, they lost their bet and they’re looking for a scapegoat,” Rob Gramlich, interim chief executive of the American Wind Energy Association, told the Tribune. “The good news is the same low prices that hurt Exelon benefit homes and businesses. Negative prices are a red herring. Exelon does not want low prices or any resources like wind that bring prices down.”

Exelon made headlines last year for its opposition to the extension of the Wind Production Tax Credit which got the company kicked out of AWEA. The credit was extended as part of the deal struck between congressional Republicans and President Obama to avoid spending cuts and tax increases.

Crane said that the Chicago-based Exelon had no plans to shut down any of their nuclear facilities.

“We continue to believe that our assets are some of the lowest-cost, most-dispatchable baseload assets and don’t have any plans at this point of early shutdown on them,” Crane told the Tribune.

Exelon owns a large number of wind turbines, but they only make up a small fraction of the company’s portfolio. Fifty-five percent of the company’s total electrical generation comes from the company’s 10 nuclear power plants with 17 reactors — 20 percent of the country’s nuclear power capacity.

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