The recently passed IL Energy Bill is a good thing for the environment and yet, a perfect example of the costs involved with clean energy. Whether the costs be in dollars, nuclear dangers, or income inequality, clean energy is not free energy. The Illinois House and Senate recently passed SB2814 to re-vamp the Public Utilities Act. Now, it must go on to the Governor’s office and Rauner is expected to approve it. The main provision is that it keeps the Clinton and Quad City Nuclear Power Plants in operation. This ensures a combined 2,032 MW of clean power will remain online at a price of $235 million. The contention is that the subsidy will make electricity more expensive and flies in the face of capitalism. I’ll explain why this bill is a good thing for clean energy and why the costs are worth it.
The decommissioning of Exelon’s Clinton and Quad City power plants would have brought 2,032 MW of baseload power off the grid. This is a consistent source of clean power which stays on more reliably during the winter when other plants have problems. According to Illinois’ energy profile, this energy would be replaced by 36% coal and 13% natural gas. At a CO2 output rate of 2,070 lbs. CO2/MW burning bituminous coal and 1,220 lbs. CO2/ MW burning nat gas, taking these plants offline would have added 7.7 million tons of CO2 every year.
One alternative I asked myself is what if those dollars were spent on wind farms? Applying the $235 million to wind energy at a cost of $1.3 – $2.2 million per MW of capacity would have bought you 107 – 181 MW of wind. This is not nearly enough to make-up for the 2,032 MW coming offline from the nuclear plants. This doesn’t even take into account the fact that other sources would still be needed to compensate for the intermittency of wind. So, not only would this scenario not nearly make-up for the power the nuclear plants supply, but you would also need the same amount of capacity anyway for when the wind doesn’t blow. The $235 million spent on wind would be grossly inadequate in compensating for the power needs of the nuclear plants coming offline.
Let us not be mistaken, this clean nuclear energy comes at a cost. In dollar rate terms, estimates range from $.25 to $4.54 on monthly bills. Although this may be less than building brand new nuclear plants (politically intractable anyway), it is not negligible. This cost is worth it as I see it as being closer to the lower amount.
Another cost is with nuclear safety. This includes costs of both a potential catastrophe and what to do with nuclear waste. This is where it really gets into a dilemma for environmentalists with the ultimatum choice between nuclear or carbon. An ethical dilemma has never been so apparent. Once again, the right choice was made. While the nuclear threat is real, it is largely sensationalized. Engineering and policy has improved to protect against accidents, and it is relatively small to the slow, steady, and un-publicized effects that pollution is having.
The third cost is the contribution to economic inequality. In simplest terms, this is because any rise in electricity rates will disproportionately affect the low-income by virtue of energy bills being a larger percentage of total expenses for the low-income than it is for the high-income. Economic inequality is a massive problem with it being the highest now in the United States than it ever has been. I would have liked to see a more socially just allocation of the costs; even though problems of fairness arise when you segregate utility rates based on economic levels. This was almost done in earlier versions of the bill with a demand charge for peak energy used, but the final version did not include this in order to get the bill passed. While some say that a demand charge is more of a burden for the low-income, I only see it as a benefit because the high-income and businesses will naturally use more peak power and be charged more. I invite more information on this, but overall, more can be done for a more just distribution of the utility costs.
The ultimate answer to all this is a carbon tax which brings in the external costs of carbon. Since this is politically impossible, effort must be put in to policies which do have value. Only policies which are law have worth.
All in all, this is a very clear example of the costs associated with real clean energy decisions. We must be willing to pay on a dollar basis, potential nuclear threats, or even economic inequality. Those who disagree are living in the clouds which are soon to experience further global warming without the practical solutions that this bill brings.
Spreadsheet of analysis here