Wednesday, November 10, 2021

Doug Ford's hopes for Ontario's electric vehicle industry hinge on mining its Ring of Fire

Mining project will be 'massive win' for First Nations, says

premier, despite Indigenous opposition


Mike Crawley · CBC News · 
'We're going to be the number one manufacturer of electric battery operated cars in North America,' said Ontario Premier Doug Ford during a news conference Monday. Opening up mining in the province's north is a key part of that plan. (Mike Crawley/CBC)

Premier Doug Ford's government is touting Ontario as a future electric vehicle manufacturing hub, and linking that to a fresh push for a huge mining development in the northern part of the province. 

Ford's Progressive Conservatives want to lure the big automakers to produce electric vehicles in southern Ontario. A key part of that strategy involves opening up the so-called Ring of Fire mineral deposit, located more than 500 kilometres north of Thunder Bay in an area home to Indigenous people.

The Ring of Fire was originally promoted as a source of chromite, an important component in steel. Now the hype centres on its supply of minerals used in EV batteries and energy storage systems, including cobalt, lithium, manganese, nickel, graphite and copper.

Ontario's mini-budget — known as the fall economic statement — featured the Ring of Fire prominently when it was presented last week, and explicitly linked the mining project to EV battery production. 

Ford spoke enthusiastically about both electric vehicles and the Ring of Fire on Monday. 

"We're doing it," Ford said, when CBC News asked about the government's plans for the mining project, during an unrelated news conference in Bradford, Ont., just north of Toronto.

"We're going to be the number one manufacturer of electric battery operated cars in North America," Ford said. "We're not only going to manufacture the batteries here, but also manufacture the cars." 

Ford said First Nations are being consulted about the Ring of Fire. 

"We do nothing up there without making sure there's a buy-in from the vast majority of the communities," Ford said. 

"This is going to benefit so many people from First Nations communities up there. They're going to have good-paying jobs. They're going to be part of the investments. They're going to be able to build roads, not not just to get up to the mines, but also be to get goods up there a lot quicker as well. This is just a massive win for the First Nations community."

However, Ford's enthusiasm is not universally matched among Indigenous leaders in northern Ontario. 

"There is going to be opposition, if this continues the way it is and the Ford government or any future government doesn't recognize the rights of our people, it's going to be a strong stance," said Chief Wayne Moonias of the Neskantaga First Nation in an interview Monday.  

Chief Wayne Moonias leads the Neskantaga First Nation in northern Ontario. He says Ford's plan will meet opposition from Indigenous communities. (CBC)
 

Neskantaga is one of three First Nations — along with Attawapiskat and Fort Albany — that declared a moratorium on Ring of Fire development earlier this year.  

"People are making money, a lot of money, off of our land and there is no consent that has been given by our people, our First Nation," said Moonias. "Rightfully the First Nations people of Neskantaga should be the ones to determine how those things are going to be carried out, if in fact they're going to be carried out." 

Ring of Fire mineral claims cover a territory around 100 kilometres in diameter, including the upper portion of the Attawapiskat River and its watershed.

"I don't think First Nations, whose land this has always been and still is solely, appreciate anybody else telling them what's good for them," said Kate Kempton, a partner with the law firm OKT. She represents Attawapiskat First Nation in a recent court challenge of the province granting mineral exploration permits in the Ring of Fire to the mining firm Juno Corp. 

"This situation with the Ring of Fire is, in my view, explosive, and the public is probably going to see that in 2022," said Kempton. 

Ford's government is proposing significant changes to provincial land-use planning law for northern Ontario that appear designed to clear hurdles to developing the Ring of Fire.

The renewed push for opening up Ontario's Ring of Fire involves its supply of minerals that can be used to make electric vehicle batteries. (Ben Margot/The Associated Press)

One change would scrap a requirement that 225,000 square kilometres of northern Ontario have protected-area status. That's nearly double the size of New Brunswick and Nova Scotia combined. 

The changes that the government itself describes as "the most significant" have to do with the First Nations membership of a joint advisory body on land-use planning in the Far North. The amendments would allow the government to create the advisory body with the participation of just seven of the 31 First Nations in the region.        

The amendments to the Far North Act are part of the omnibus bill tabled last week by Finance Minister Peter Bethlenfalvy along with his fall economic statement.   

The act "creates unnecessary barriers to economic development," said Curtis Lindsay, press secretary to Greg Rickford, Ontario's minister of Indigenous affairs, northern development and mines. 

Ontario Premier Doug Ford shakes hands with Chief Cornelius Wabasse of Webequie First Nation, left, and Chief Bruce Achneepineskum, Marten Falls First Nation, centre, after signing a new deal on the Ring of Fire mining project in northern Ontario. The signing took place at the Prospectors and Developers Association of Canada's annual convention in Toronto on March 2, 2020. (Nathan Denette/The Canadian Press)

He said the revised act will focus on "enabling the development of all-season roads, electrical transmission projects and mineral development while maintaining community-based land-use planning and environmental protections."

Bethlenfalvy drew a direct link between electric vehicles and the Ring of Fire in an interview on Friday with Superior Morning, a CBC Radio program broadcasting from Thunder Bay. 

"We want to build the Ring of Fire," Bethlenfalvy said. "There's critical minerals there [that] go into electric vehicles, and we want to be the leader in North America, in Ontario, building electric cars." 

He described the government's new push for the Ring of Fire as responding to the community. 

Noront Resources Esker Camp is located in Ontario's Ring of Fire. The company's share price has tripled in the past six months as two Australian mining giants offered increasingly larger takeover bids. (Jeff Walters/CBC)

"Prosperity should be in the north," said Bethlenfalvy.  "We just want to open up the north for everyone, and we're going to do it with very sincere and open consultations." 

The mining company that holds the vast majority of the claims in the Ring of Fire, Noront Resources, is currently the focus of a bidding war between two Australian mining firms, BHP Group and Wyloo Metals. Since the rival takeover bids began in May, Noront's share price has tripled, adding some $280 million to the company's value in just six months.

The two firms are now in talks about a joint takeover, with a deadline of Nov. 16 for NorOnt shareholders to accept the latest bid. 

One of the biggest obstacles to getting minerals out of the Ring of Fire is that there are no all-season roads to its location. 

Just last month the government launched two separate environmental assessments for sections of road that would link the Ring of Fire to the Webequie and Marten Falls First Nations and ultimately, to the provincial highway system. 

In 2018, before becoming premier, Ford vowed to get roads built to the Ring of Fire "if I have to hop on that bulldozer myself."

The Ford government has budgeted roughly $1 billion for the road construction, but that commitment is not new for Ontario. Back in 2014, the then-Liberal government of Kathleen Wynne allocated $1 billion for the project as well.

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Financial Markets May Kill Off Fossil Fuels Before Governments Do

As the cost of capital goes up, the prospects for fossil fuel projects go down.


Photo by CleanTechnica

By Steve Hanley


There is an interesting email from Bloomberg Green today. It discusses how the cost of capital is going up for fossil fuel companies and down for renewables. The concluding sentence goes like this: “Markets may end up killing off fossil fuels before governments do.” Why is that? Let’s dig into the details behind that rather startling statement.

The Cost Of Capital

I am no economist, so some of you may find my comments naive, quaint, or even flat out wrong. In general, when a business like Exxon wants to go mucking about with the Earth, drilling test holes here and there in search of new oil deposits, it turns to financial markets to borrow the money it needs to finance those quests.

Investors want to be paid back with interest. How much interest is usually determined by how risky the investment is. The higher the risk, the greater the interest. Bloomberg executive editor Tim Quinson writes in today’s email that a decade ago, the cost of capital for for developing oil and gas projects and for renewable projects was pretty much the same — somewhere between 8% and 10%.

Not anymore, he writes. The threshold of projected return that can financially justify a new oil project is now at 20% for long cycle developments, while for renewables it has dropped to somewhere between 3% and 5%. That’s according to Michele Della Vigna, a Goldman Sachs analyst based in London.

“That’s an extraordinary divergence which is leading to an unprecedented shift in capital allocation,” Della Vigna says. “This year will mark the first time in history that renewable power will be the largest area of energy investment.”

Why The Change?

The first question most people will ask is, why the change? Will Hares, an analyst at Bloomberg Intelligence, explains that pressure from ESG investors is the best explanation for the widening difference between dirty and clean. “Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing,” he says.

This is resulting in more expensive debt financing (in some cases double-digit coupons), which, when coupled with depressed equity valuations, leaves most oil companies facing higher costs for capital, Hares adds.

The Conversation At COP26

It this a sick joke? Apparently there were more fossil fuel lobbyists in Glasgow last week that the number of climate conference delegates from any one of the world’s nations. If that doesn’t make you want to puke, I don’t know what would. These smarmy, smirking sycophants get paid to sabotage climate talks so the companies they represent can continue to poison the environment with the waste products that come from burning fossil fuels. They should all be hauled before the International Criminal Court and charged with crimes against humanity.

Future Investments In Renewables

In Glasgow last week, Della Vigna estimated about $56 trillion, or roughly $2 trillion a year, will be invested in renewable energy, bio-energy, and other clean energy infrastructure projects between now and 2050. Spending is expected to peak between 2035 and 2040, driven largely by expenditures on power networks, charging networks, building upgrades, and a massive expansion of renewable power sources such as clean hydrogen.

“It’s significant that such a large share of the financial sector has recognized its role in driving the climate crisis and the need to wind down its financed emissions,” Ben Cushing, a campaign manager at the Sierra Club, tells Bloomberg. “But achieving net zero by 2050 and staying within 1.5 degrees Celsius of warming means stopping financing for fossil fuel expansion today. That’s the key test for whether these commitments are aligned with reality.”

Managing The Spread

“Given this backdrop, the spread between oil, gas and coal and renewable energy will continue to diverge as banks change their financing habits,” says Quinson. In other words, while the politicians are all huddled around the free shrimp cocktail table in Glasgow, the financial community is about to do what they will not or cannot.

Banks and investment firms are not elected by anyone and answer only to the almighty dollar. When lending (and insurance coverage) to fossil fuel companies dries up, it’s game over for them. They can lie to Congress, they can pour money into the campaign coffers of crooks like Joe Manchin, they can fund groups like the American Petroleum Institute to their hearts content, but without access to capital that’s affordable, they are done. Finished. Kaput.

Numbers don’t lie and the bottom line is the bottom line no matter what some politician or lobbyist says. The cost of capital is a significant factor when calculating the levelized cost of energy from any source. When that cost goes up, oil, coal, and dirty methane ventures look a whole lot less attractive. There is an excellent chance the financial sector will put fossil fuels out of business long before our political leaders find the courage to act.


Cost of Capital Spikes for Fossil-Fuel Producers

Ten years ago, developing oil and gas projects was about the same as renewable endeavors. Not anymore.

BLOOMBERG GREEN
November 9, 2021

A worker guides a drilling pipe at the Gazprom Chayandinskoye oil, gas and condensate field near Lensk, Russia, on Oct. 13. 
Photographer: Andrey Rudakov/Bloomberg

Ten years ago, the “cost of capital” for developing oil and gas as compared to renewable projects was pretty much the same, falling consistently between 8% and 10%. But not anymore.

The threshold of projected return that can financially justify a new oil project is now at 20% for long-cycle developments, while for renewables it’s dropped to somewhere between 3% and 5%, according to Michele Della Vigna, a London-based analyst at Goldman Sachs Group Inc.

“That's an extraordinary divergence, which is leading to an unprecedented shift in capital allocation,” Della Vigna said. “This year will mark the first time in history that renewable power will be the largest area of energy investment.”

Cost of Capital: Fossil Fuels vs. Renewable Energy
Source: Goldman Sachs
Note: Figures for 2020 are estimates.More from

Will Hares, an analyst at Bloomberg Intelligence, said pressure from ESG investors is the best explanation for the widening difference between dirty and clean.

“Oil companies are finding it increasingly difficult to raise financing amid rising ESG and sustainability concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing,” Hares said.

This is resulting in more expensive debt financing (in some cases double-digit coupons), which, when coupled with depressed equity valuations, leaves most oil companies facing higher costs for capital, Hares said

.
Mark Carney at COP26 in Glasgow, Scotland
Photographer: Stefan Rousseau/PA Images/Getty Images

Climate finance has been a hot topic at the COP26 meetings in Glasgow, Scotland. Government leaders from less-developed nations have at times expressed fury that rich countries repeatedly break promises to mobilize funds to help them decarbonize and adapt to a warming planet.

More such pledges were made last week—only this time they came from the financial industry.

Mark Carney, the former central banker turned climate envoy, said more than 450 financial firms representing $130 trillion of assets have pledged to bring their lending and investing activities in line with the goals of the 2015 Paris agreement. The announcement, however, didn’t mollify skeptics who are quick to point out that details on how the industry would actually meet this target were lacking—a hallmark of the greenwashing scourge.

Goldman Sachs estimates that about $56 trillion, or $1.5 trillion to $2 trillion a year, will be invested in renewable energy, bioenergy and other clean-energy infrastructure projects between now and 2050. Spending is expected to peak between 2035 and 2040, driven largely by expenditures on power networks, charging networks, building upgrades and a massive expansion of renewable power sources such as clean hydrogen, Della Vigna said.

“It's significant that such a large share of the financial sector has recognized its role in driving the climate crisis and the need to wind down its financed emissions,” said Ben Cushing, a campaign manager at the Sierra Club, an environmental pressure group. “But achieving net zero by 2050 and staying within 1.5 degrees Celsius of warming means stopping financing for fossil-fuel expansion today. That’s the key test for whether these commitments are aligned with reality.”

It’s likely that given this backdrop, the spread between oil, gas and coal and renewable energy will continue to diverge as banks change their financing habits. Indeed, markets may end up killing off fossil fuels before governments do.

Sustainable finance in brief

Adam Smith, considered by many to be the “father of modern economics,” is having his signature work updated to allow for the climate crisis. A group of economists are reworking Smith’s “The Wealth of Nations” to reflect the modern challenge of a warming planet. Above, a marker leads to Smith’s grave in Edinburgh, Scotland.
Photographer: Adam Berry
Adam Smith’s “Wealth of Nations” gets an update to accommodate the climate crisis.
Former U.S. Vice President Al Gore warns the world about a multitrillion-dollar “subprime carbon bubble.”
Singapore aims to curb greenwashing by way of stress test technology.
Lazard Chief Executive Officer Ken Jacobs says he seeks to plug the green knowledge gap.
World Bank’s Climate Warehouse is looking to blockchain technology to solve carbon data issues.

Bloomberg Green publishes the ESG-focused newsletter every week, providing unique insights on climate-conscious investing.
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Calgary

New U of C research finds negative overall impacts from coal mining in Rockies

The mine would displace ranching and tourism as well as damage water and wildlife

The Canadian Press · 
An aerial view of Tent Mountain in southwestern Alberta, which was the site of an open-pit coal mine that was active decades ago but has since been abandoned. (Montem Resources)

An analysis from the University of Calgary concludes that a coal mine on protected land on the eastern slopes of the Rocky Mountains wouldn't be an overall benefit to Alberta.

A paper from the university's School of Public Policy says the overall economic, social and environmental impacts of such a development would be negative.

Jennifer Winter, who teaches economics, says she and her colleagues went beyond the usual weighing of wages paid and taxes remitted.

She says her group's paper, released this morning, tries to bring non-monetary factors into cost-benefit assessments usually limited to dollars and cents.Winter says the latest information on coal markets suggests such a mine would be marginally profitable and that its job and tax benefits would be small in relation to Alberta's economy.

Meanwhile, a mine would displace ranching and tourism, damage water and wildlife, and create a risk that taxpayers would end up paying for cleanup.

The paper doesn't refer to any particular coal project, but draws heavily on information presented at the hearings into the Grassy Mountain proposal, which was recently turned down after hearings by provincial and federal regulators.

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Nuclear Is Hot, for the Moment

The United States, Russia, and France now describe the once-neglected technology as a key part of their decarbonization plans.

By Robinson Meyer
THE ATLANTIC
When the Watts Bar Nuclear Plant Unit 2 in Tennessee opened in 2016, it was the first new U.S. nuclear reactor to come online since 1996. 
(Shawn Poynter / The New York Times / Redux)

This is an excerpt from The Atlantic’s climate newsletter, The Weekly Planet. 

For years, the nuclear-power industry has had a complaint: Why does nobody love us?

Nuclear has been, after all, the Atlas of carbon-free energy production, keeping the world hefted on its shoulders, year after year, with thousands of megawatt-hours of electricity that required burning no fossil fuels. Even today, nuclear plants generate more zero-carbon power worldwide than wind and solar do combined.

And yet it has been (as the complaint goes) ignored, hated, marginalized. Traditional environmentalists have trashed it, opposing new construction and warning of catastrophic accidents. As recently as 2017, the Sierra Club’s Nuclear Free campaign warned that nuclear energy had a “big carbon footprint” because fossil fuels are used to mine uranium for fuel rods—even though the same criticism could be made of the fuels used to mine lithium, silicon, and other minerals in renewables. This gaslighting aggravated nuclear advocates and turned them into the professional contrarians of the energy world. Nuclear could save the world, they muttered, if anyone would give us the chance.

How did they escape their funk? As with so many other problems in life, the answer is that they just had to keep doing the work, and wait.

Over the past few months, nuclear has become an unmistakable part of the world’s decarbonization strategy as formulated by both the right and the left. Nuclear is a part of the decarbonization plans released by the United States, the United Kingdom, and China, and it seems likely to play an even bigger role in poorer countries that want to maintain heavy industry. A number of bets placed during the past decade are coming to fruition. Nuclear is enjoying—well, not love, perhaps, and not even adoration, but at least a grudging affection.

“It’s being treated on more and more of an equal footing, I think it’s fair to say,” Jackie Toth, the senior advocacy director at the Good Energy Collective, a progressive pro-nuclear organization, told me. “Is it a revival or make-or-break moment? It’s a bit of both.”

Nuclear’s new glow can be seen at the Conference of the Parties, the ongoing United Nations climate conference in Glasgow, Scotland. Its presence alone is noteworthy: “At COP25, I was warned not to even attend,” Rafael Mariano Grossi, the International Atomic Energy Agency’s director-general, told Bloomberg. This year, representatives from the United States, Russia, and Brazil all described nuclear energy as a major part of their decarbonization strategy at the event.

Indeed, the Biden administration has turned America’s cohort of “advanced nuclear” start-ups and their smaller and (hopefully) safer reactors into a facet of its climate diplomacy. At COP last week, the United States and Romania announced a partnership that will see the American start-up NuScale, which makes modular reactors that can be produced in a factory, install five of them into retired coal plants in Romania and help the country, where roughly one-seventh of electricity comes from coal, phase out its coal plants by 2032. The reactors will eliminate 45 million tons of carbon dioxide a year, according to Third Way, a centrist U.S. advocacy group that praised the deal.

“We are very bullish on these advanced nuclear reactors,” Jennifer Granholm, the U.S. secretary of energy, told Yahoo News. “We have, in fact, invested a lot of money in the research and development of those.”

Over the past few years, the climate movement, too, has warmed to nuclear power. In 2018, the Union of Concerned Scientists, which was originally founded as a nuclear-safety watchdog (the eponymous concerned scientists were nuclear scientists!), reported that more than a third of the U.S. nuclear fleet was slated to close early. If closed, those plants would likely be replaced with coal and natural gas, the scientists warned.

American politicians of both parties are now sufficiently open to nuclear that they have begun to support it with huge infusions of cash. The Trump administration’s Department of Energy was so excited about advanced nuclear that it made a fake dating app to promote it. (“So … it’s been a while since nuclear has put itself out there,” its announcement post began.) The bipartisan infrastructure bill that the House of Representatives passed last week boasts more than $8.47 billion for existing nuclear plants (including a new subsidy to help keep them alive into the mid-2020s) and advanced-nuclear demonstration projects. Joe Biden’s signature spending package, the Build Back Better Act, contains a separate new production tax credit for nuclear plants.

This isn’t happening only in the United States. China is planning 150 new reactors in the next 15 years. French President Emmanuel Macron announced today that France will “relaunch the construction of nuclear reactors” for the first time in decades. As Bloomberg News reports, that’s more reactors than the entire world has built since 1986. And the European “green taxonomy,” a lengthy regulation that specifies what forms of energy investment qualify as “green” according to the European Union, is expected to list nuclear as climate-friendly.

At the same time, some of those American nuclear-energy start-ups are beginning the slow work of going to market. Two companies, TerraPower and X-energy, have submitted plans to the U.S. Nuclear Regulatory Commission. TerraPower, a Washington State–based company founded and chaired by Bill Gates, uses uranium fuel encased in molten salt-based coolant; X-energy, in Maryland, uses billiard-ball-size graphite spheres called “pebbles” in its reactor design.

If you’re like me, you’ve been hearing about advanced reactors for years without a clear sense of what they mean or when they’ll be ready. They seem to occupy a weird intermediate zone where no one has ever built an advanced reactor, but also the technology is already under regulatory review. The first demonstration projects won’t get up and running for another few years. So it might seem unwise to depend on them to fix the American electricity mix in, say, 2035, when Biden hopes the power grid will be carbon-free.

But the delay in nuclear technology is unusually front-loaded on the timeline between concept and commercialization. Normally, we hear about a scientific breakthrough or new technology, then wait years (or decades) for it to make its way to market. Engineers learn how the technology works partially by building it, testing it out, and then adapting it to a mass-production environment.

But because of the risk of nuclear accidents, nuclear technology receives regulatory approval before it is even built. A new reactor design is inspected and vetted by the Nuclear Regulatory Commission. An approved advanced-nuclear reactor could go from blueprint to build-out very quickly: In the span of a few years, TerraPower or X-energy could receive regulatory approval for its design, build a demonstration unit, and then—assuming it works—fill out its order book.

Of course, there’s one thing that could put nuclear back on the defensive: a major accident. Disasters at Three Mile Island, Chernobyl, and Fukushima dissuaded governments, utilities, and investors from embracing the technology. After Fukushima, Japan shut down its fleet of 50 nuclear reactors, a phaseout that it has only recently begun to reverse, and Germany adopted plans to retire zero-carbon nuclear plants years before it shuts down coal plants.

All of this now has to happen on relatively short timelines. “The big action on climate change and for utility order books needs to happen before 2030,” Toth, of the Good Energy Collective, said. Utilities, in particular, have to decide soon what they will build to fulfill net-zero promises. “That means the first advanced-nuclear deployments in the U.S. have to go extremely well for customers to want to buy them over natural gas.”

Nuclear is losing its stigma, in other words. It’s been invited to the cool kids’ table. The reindeer games are over. Now it has to deliver.

Robinson Meyer is a staff writer at The Atlantic. He is the author of the newsletter The Weekly Planet, and a co-founder of the COVID Tracking Project at The Atlantic.
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Will the climate crisis force America to reconsider nuclear power?



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Study assesses potential value of continued operation for Diablo Canyon

09 November 2021

Delaying the retirement of the Diablo Canyon nuclear power would reduce California's power sector carbon emissions, reduce reliance on gas, save billions in power system costs and bolster system reliability, according to a new report by authors from Stanford University, the Massachusetts Institute of Technology and LucidCatalyst. The plant could further increase its value to the state by providing multiple services including desalination and hydrogen production.

Diablo Canyon currently provides 8% of California's in-state electricity production and 15% of its carbon-free electricity production, but the state's Public Utilities Commission in January 2018 approved a multiparty settlement to fully and permanently shut the plant down when unit 2's operating licence expires in 2025. In its decision, the commission found that the plant was not cost effective to continue in operation, was not needed for system reliability, and that its value for reducing greenhouse gas emissions was "unclear", according to the authors of An Assessment of the Diablo Canyon Nuclear Plant for Zero-Carbon Electricity, Desalination, and Hydrogen Production.

"But in the intervening three and half years, several new developments have occurred," they note. These include: the signature of state legislation on zero-carbon generation and climate neutrality targets; recent studies highlighting the importance of always-available, non-weather-dependent generation capacity and reliable sources of zero-carbon fuels for hard-to-electrify sectors of the economy; blackouts and brownouts when electrical capacity has fallen below demand; mounting evidence of an increasing danger of severe water shortages; and state commitments to increase the share of land that is set aside for conservation purposes, limiting the amount of land available for energy production and other uses.

These developments led the joint study team of researchers from Stanford University and MIT to re-examine the potential value of Diablo Canyon in addressing these overlapping challenges. The team was assisted on hydrogen and multiple product research by Justin Aborn of energy analysis firm LucidCatalyst.

Delaying the retirement of the plant by ten years, to 2035, would reduce California power sector carbon emissions by more than 10% from 2017 levels and reduce reliance on gas, save USD2.6 billion in power system costs, and bolster system reliability to mitigate brownouts, the researchers found. "Even assuming rapid and unconstrained buildout of renewable energy, the continued operation of Diablo Canyon would significantly reduce California’s use of natural gas for electricity production from 2025 to 2035 by approximately 10.2 TWh per year. In doing so, Diablo Canyon would also reduce California carbon emissions by an average of 7 million tonnes (Mt) CO2 a year from 2025-2035," the report notes.

Operating the plant to 2045 and beyond could save up to USD21 billion in power system costs, potentially avoid the need to use save 90,000 acres of land for the siting of new solar photovoltaic capacity, and save up 50 Mt CO2 in cumulative emissions.

Multiple benefits


Diablo Canyon could be a "powerful driver of desalination to serve urban, industrial, and agricultural users," the study found. A desalination plant situated adjacent to Diablo Canyon would be able to augment fresh water supplies to the state as a whole and to critically under-served or overdrafted regions, at lower costs than existing or proposed desalination plants, while meeting environmental standards protecting marine life.

California "will likely need hundreds of millions of kilograms of hydrogen-based, zero-carbon fuels" annually to achieve a zero-carbon economy, the authors note. "The preliminary analysis here suggests that, with heat-assisted electrolysis, Diablo Canyon could produce 110 million kilograms of hydrogen annually at a cost of $2.01-2.46/kg. This is up to half less than the range of current costs of hydrogen produced from solar or wind power, while utilizing a small fraction of the space required for those other generation sources."

Hydrogen production at the Diablo Canyon site would also likely be cost-competitive with the hydrogen produced from natural gas with carbon capture, which is today's least expensive form of zero-carbon hydrogen production, they add.

The analysis also considered the potential to "repurpose" the nuclear plant to provide grid electricity, desalinated water, and hydrogen at the same time, and concluded that the production of these three products could "substantially increase" the value of Diablo Canyon by an amount equivalent to USD70/MWh, or even higher. "In a polygeneration configuration, the electricity output of Diablo Canyon plant could be directed to provide varying amounts of electricity to the power grid, desalination or hydrogen production, respectively, to maximise revenue, provide grid reliability, or meet other objectives, as needed," the report notes.

Repurposing the plant would not be without "many and considerable" challenges, including at the reinitiating the federal plant relicensing process. Chief among the challenges at the state level would be the need to obtain approval of a newly engineered water intake system as well as other approvals needed for the construction and operation of desalination and hydrogen production facilities, and supporting infrastructure. Stakeholders would need to be re-engaged, and "there will also likely be opposition in principle among some to the use of nuclear energy in any form, for any purpose," they note.

"While these challenges are substantial, so are the potential gains," they say. "This preliminary analysis is intended to allow policymakers and the public to consider weighing the benefits and tradeoffs associated with maintaining or rededicating Diablo Canyon in light of other new and urgent challenges that face California."

They conclude: "This study was not intended to be and should not be considered to be a definitive analysis of those benefits and tradeoffs. That will require further investigation. But the authors submit that the conclusions of this report present sufficient grounds for further study and debate by setting forth a prima facie case for extending the operations of the Diablo Canyon nuclear plant."

Funding for the project came from the MIT Center for Energy and Environmental Policy Research, the Abdul Latif Jameel Water and Food Systems Lab, the MIT Center for Advanced Nuclear Energy, the Rothrock Family Fund, the Pritzker Innovation Fund, The Rodel Foundation, Ross Koningstein, and Zachary Bogue & Matt Ocko.

Diablo Canyon's two pressurised water reactors are owned and operated by Pacific Gas and Electric Company.

The report can be downloaded here.

Researched and written by World Nuclear News


Stanford/MIT Study: Keeping Diablo Nuclear Plant Open Would Save Billions, Help Meet Emissions Goals

‘Officials so worried about power and emissions, have this gem they don’t really want anymore’


Diablo Canyon Nuclear Power Plant. (Photo: Wikipedia via Flickr)

By Evan Symon, November 9, 2021 11:49 am

A new Stanford University/Massachusetts Institute of Technology (MIT) study released on Monday found that an extending the life of Diablo Canyon Nuclear Power Plant past it’s planned 2025 closure date would help the state greatly reduce carbon emissions and meet state climate goals.

For decades, nuclear power plants have been slowly been taken offline in California. Ever since the closure of the San Onofre nuclear plant in 2013, Diablo Canyon, located in San Luis Obispo County, has been the sole remaining power plant in the state.

Following the Fukashima Daiichi disaster in Japan in 2011, pressure from environmental and local public groups fought against keeping the plant open. Concerns over earthquakes, nuclear waste pollution, and other factors convinced the California Public Utilities Commission (CPUC) to close the plant by 2025.

While legislators have been scrambling to keep it open, largely due to California being behind on green power generation and the plant accounting for 8% of all power generated in the state, it is still on track to close by mid-decade.

The Stanford/MIT Study released Monday bucked the recent trend of moving away from nuclear power, finding that keeping Diablo Canyon open until 2045 would not only help power and environmental concerns, but could also significantly help California battle drought in the future.

According to the report, extending the life of the plant would save $21 billion in power systems costs, would give more time for California to build up green energy plants, would help California meet the growing demand of power provided to electric vehicles, reduce power sector carbon emissions by 10%, and largely prevent brownouts in the future.

“Delaying the retirement of Diablo Canyon to 2035 would reduce California power sector carbon emissions by more than 10% from 2017 levels and reduce reliance on gas, save $2.6 Billion in power system costs, and bolster system reliability to mitigate brownouts,” noted the study. “If operated to 2045 and beyond, Diablo Canyon could save up to $21 Billion in power system costs and spare 90,000 acres of land from use for energy production, while meeting coastal protection requirements.”

The additional, unplanned energy, if linked to a new desalination and/or hydrogen plant, would also provide more fresh water being brought back into reservoirs than any current state plan and would drastically reduce green energy costs while working on far less needed land for future green energy production.
Positives, negatives of keeping Diablo Canyon open until 2045

The report also hinted at a possible return of more nuclear plants allowing for more of an ease into California’s 2045 carbon emission-free power goal.

“In order to combat climate change in the best possible way, I think nuclear power is something that we should really consider and ask PG&E to reconsider,” said former Secretary of Energy and current Stanford Professor Steven Chu. “When Japan and Germany shut nuclear power plants in recent years it led to a rise in carbon emissions from fossil fuels.”

Other experts agree that keeping Diablo Canyon open would bring vastly more positives than negatives.

“Our nuclear energy technology has greatly reduced the chances of a meltdown or a similar disaster from occurring,” said Sal Braith, a nuclear engineer who worked at several nuclear plants in the Northeast, in a Globe interview on Tuesday. “All the big incidents people think of, like Three Mile Island, or Chernobyl, or Fukashima, they were all in plants with older technology. Upgrading Diablo Canyon, which still has a sound design that still holds up today, would do wonders for California. They’re so worried about power and emissions in the future, well, they have this gem they don’t really want anymore. The solution to their problems is literally right there.”

“And everything the report brings up, like lowering emissions and connecting to other environmentally friendly things, we’ve been screaming that for years for states to pick up on that. California has an easier time for emissions goals to be met, it staves off power concerns for awhile, the water crisis is largely alleviated, and a lot of jobs are created. And if more are built, it only increases those by many-fold.”

However, environmental opponents stressed that even with the report showing many positives, the negatives are still too much for any kind of reconsideration.

“It is enticing, I have to admit that,” said Melissa Key, an environmental lawyer who has represented environmental groups against energy companies with nuclear power plants in the past, to the Globe on Tuesday. “But every year of operation means the greater chance of something going wrong. And I don’t think that I even need to tell you the dangers of what a major nuclear accident, especially one so close to fault lines, can do.”

“This is the last one in the state, and for the good of California, it needs to stop. Solar, wind, and other energies will be able to pick up the slack by 2025.”

As of Tuesday, the Stanford/MIT has yet to illicit a response from California energy officials.


Keeping California’s Last Nuclear Plant Can Save Money, Climate: MIT-Stanford Study

PG&E’s Diablo Canyon nuclear plant scheduled to close in 2025

Researchers say keeping it open could cut emissions and costs

By David R Baker 
November 8, 2021
The PG&E Diablo Canyon nuclear power plant in Avila Beach, California in 2012. 
Photographer: David Paul Morris/Bloomberg

California’s last nuclear power plant, scheduled to close in 2025, could aid the fight against climate change, cut energy costs and provide water to the parched state if allowed to stay open, according to a new study.

The findings won the support of former U.S. Energy Secretary Steven Chu, who in a web presentation said countries prematurely shutting down nuclear plants ended up using more fossil fuels instead.

“We are not in a position in the near-term future to go to 100% renewable energy,” said Chu, who was not one of the report’s authors. “We will need some power that we can turn on and dispatch at will, and that leaves two choices: fossil fuel or nuclear.”

PG&E Corp. reached an agreement with environmental groups in 2016 to shutter the Diablo Canyon nuclear plant when its operating licenses expire, saying the plant’s energy would no longer be needed as cheap renewable power flooded onto the state’s grid. Since then, however, California’s energy supply has grown strained, with the state veering close to blackouts during heat waves.

Researchers from Stanford University and the Massachusetts Institute of Technology said in the study released Monday that keeping Diablo Canyon open through 2035 would cut greenhouse-gas emissions from California’s power sector 10% each year, by reducing the amount of electricity needed from natural-gas plants. It would also save $2.6 billion for utility ratepayers. Keep Diablo Canyon open until 2045, and the savings would grow to $21 billion, they said. The report’s authors also examined using the coastal power plant’s electricity to produce hydrogen or desalinate sea water.

Read more: California Taps Green Power to Replace Nuclear, Gas Plants

Keeping Diablo open would require a license extension from the Nuclear Regulatory Commission as well as the approval of California regulators -- not to mention a change of heart from PG&E. A company representative noted the plan to close the plant had already been approved by California officials.

“The state has made clear its position on nuclear energy,” PG&E spokeswoman Suzanne Hosn said in an email. “Our focus therefore remains on safely and reliably operating the plant until the end of its NRC licenses.”

Chu called PG&E’s decision to close the plant “distressing.” The plant, which is nearly surrounded by fault lines discovered after construction began, faced decades of opposition, which swelled again after the 2011 Fukushima nuclear accident in Japan. But Diablo Canyon also won the support of some environmentalists convinced it was needed to fight global warming.

“Nuclear power is something we should reconsider, and we should ask PG&E to reconsider,” Chu said.
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