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Existing Nuclear and New Renewables Both Necessary for a Clean-Energy Future

Replacing New Jersey’s nuclear plants with renewable generation is not plausible anytime soon. Attempting to do so would cause a major backward slide in efforts to decarbonize the state’s economy

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Credit: PSEG

New Jersey’s three nuclear plants are struggling economically and may close prematurely if they do not receive policy support. Their shutdown would have severe consequences, making it unlikely that the Garden State could achieve its clean energy goals.

Last year, the New Jersey Legislature and Gov. Phil Murphy enacted a collection of legislative measures designed to promote new clean energy resources in the Garden State and to preserve existing resources. One component of this legislation set ambitious new targets for developing offshore wind, energy storage and energy efficiency to complement New Jersey’s already robust solar programs. It approximately doubled the state’s renewable portfolio standard — to 50 percent by 2030 — solidifying New Jersey’s position as a clean energy leader. Companion legislation recognized nuclear energy as a necessary part of New Jersey’s clean energy portfolio. It established a Zero Emissions Certificate program to compensate nuclear generators for their carbon-free generation and prevent their premature closure.

Critics have suggested the ZEC program may not be necessary because the nuclear plants’ output could be replaced with renewable energy resources. Unfortunately, replacing nuclear plants with renewable generation is not plausible anytime soon and attempting to do so would cause a major backward slide in efforts to decarbonize New Jersey’s economy.

To understand why, we must consider the relative scale of renewables and nuclear power in New Jersey. Renewables, mostly solar, currently provide about 5 percent of New Jersey’s electricity needs, while New Jersey’s three remaining nuclear plants, Salem 1, Salem 2 and Hope Creek, provide more than 35 percent and account for nearly 90 percent of the state’s current emissions-free generation. If these nuclear plants continue to operate, New Jersey’s ambitious new renewables target would result in about 85 percent of the state’s electricity needs being served by non-emitting resources. But if the nuclear plants are closed prematurely, most of the new renewable additions will go to offset the loss of emissions-free nuclear generation, rather than replacing fossil generation.

Canceling the gains of renewable energy

Losing the nuclear plants would mean that instead of going from 40 percent non-emitting generation today to 85 percent by 2030, the state would achieve only 50 percent by then. In other words, the loss of nuclear power would cancel most of the state’s renewable gains, with an eventual tenfold increase in renewable resources resulting in a comparatively small 10 percent point increase in the share of power from clean sources.

Moreover, for much of the intervening decade as new renewables are developed, power sector emissions would be higher than they are today, resulting in more cumulative greenhouse gas emissions.

At the moment, the ZEC program may be the only tool available to New Jersey policymakers to prevent the loss of the state’s greatest source of carbon-free electricity. Other mechanisms are possible in principle, such as a meaningful national or regional carbon price, or regional clean energy markets that would allow renewables, nuclear and other clean resources to compete on a level playing field. But there currently is no obvious political path toward these policies, and history shows us that such mechanisms are difficult to implement. If alternative policies are implemented in the future, New Jersey’s ZEC legislation does provide for regular reviews to ensure that ZEC payments are necessary and adjustment of ZEC payments to account for other policy mechanisms that compensate nuclear plants for their clean energy or other attributes.

Many different types of clean resources will be needed to transform our energy system. Because a transformation of this scale will not occur quickly, nuclear and renewable resources need not be viewed as alternatives or competitors, at least for now. As long as there is significant fossil generation that can be displaced by non-emitting alternatives, both have an important role to play. For the next decade or so, losing its nuclear plants would have New Jersey running to stay in the same place, rather than making forward progress on its clean energy goals.

Dean Murphy is a principal of The Brattle Group; the views expressed here are those of the author and do not represent the opinions of The Brattle Group or its clients. Murphy is a co-author of a November 2017 study, Salem and Hope Creek Nuclear Power Plants’ Contribution to the New Jersey Economy.

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