When the Free Market Isn't
I have been slow in commenting on the closure of Vermont Yankee announced a few weeks ago by Entergy. This is because it is hard for me to know what to say.
In the end, it seems that the closure was triggered mainly by economics, and that some of the economic issues are so bizarre they simply make my head spin.
There are some economic issues I do understand. Sort of. I understand that the recent developments in the gas industry are leading to low costs for gas, making almost every other source of energy non-competitive. I can argue that this is a short-sighted view, and I could wish the business world didn't have such a short-term view, but I understand that they do.
However, there are other economic issues that simply make no sense to me at all. The fact that renewable energy suppliers are so heavily subsidized that they can bid negative numbers and still make money just doesn't make sense to me in a country that is supposed to be based on a free market. Honestly, if I were Entergy, I would have given up long ago!
I have seen some very good coverage of this issue in other sources. All the sources I respect feel, as I do, that something is irrational about what is happening. Examples include a recent article in the New York Times by Matthew Wald, and a discussion on the American Nuclear Society (ANS) blog by Jim Hopf.
I do understand the government role in providing incentives to help new technologies get started, but the impacts of these incentives should be monitored to make sure they don't have unintended consequences.
As I see it now, we have subsidized renewables because we want to assure the viability of solar and wind power in the hopes of replacing dirtier and more polluting forms of energy supply, such as coal. That might be a good idea--if that is what we actually accomplished. However, what has really happened is that we have forced the closure of another source of clean power--that is, a nuclear power plant.
In the long run, the current situation is in no one's interest. It will not lead to a cleaner environment and it will not lead to lower real costs for energy supply. I do not know if the energy markets are as bizarre in other parts of the country, but if they are, it does not bode well for our national energy future.