A 41-year old nuclear power plant in Vernon, Vt. that will soon shut down will impact the gas and electricity market in New England, predicts a report by the Energy Information Administration (EIA), which is part of the Department of Energy. The 604 megawatt plant owned by Enterenergy is one among several that will close in the next few years in the region, challenging its power supply.
In the next three years, New England will see 1, 369 MW of generation being retired as plants age. The closures will have more of an impact on the region than they would elsewhere — while it relies more heavily on natural gas now (52 percent) than it did 10 years ago (30 percent), pipeline constraints have limited supply, which has led to price spikes during the peak winter months when gas is used for heating as well as generating electricity.
Last year, natural gas was the marginal fuel which set the price for operating generators — so a price rise for wholesale natural gas would contribute to a similar hike in wholesale power price.
The Vermont Yankee nuclear power plant will be shut down towards the end of 2014, once it reaches the end of its fuel cycle, because it faces shrinking profitability because of low electricity rates and a big capital outlay. It represents four percent of the region’s power supply. The station will remain under the oversight of the Nuclear Regulatory Commission throughout the decommissioning process.
Another plant that will close next year is a 750 MW coal- and petroleum-fired plant in Salem Harbor, Massachusetts that is owned by Dominion Energy Resources. Declining profits and the costs of complying with environmental regulations will force it to shut down.
The EIA notes that nearly 1,200 MW of new wind power and natural gas plants that will come online in the next couple years will compensate for these closures. The region also imports large amounts of electricity from Hydro-Quebec in Canada that should offset the closures, but the transmission system will need upgrades to accommodate larger import quantities.