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| Fig. 1: The San Onofre Nuclear Generating Station's two nuclear reactors. (Source: Wikimedia Commons) |
In January 2012, the San Onofre Nuclear Generating Station (SONGS) was abruptly shut down after a new $680 million steam generator, with forty year life, began to release radioactive steam due to leaks from vibrations. [1,2] San Onofre Nuclear Generating Station had been providing electricity to the greater Los Angeles and San Diego area since 1968. [3-5] Its was operated by the Southern California Edison Company. The plant's original unit operated from 1968 to 1992, while the two units operatiing until 2012 were put into service in 1983 and 1984 (see Fig. 1). [3] Inside the two nuclear reactors, this expensive steam generator is vital for transferring the heated water through pipes, allowing it to create to steam, which spins a turbine to produce electricity. The two iconic containment buildings visible to thousands of motorists who drive along a stretch of Interstate 5 between Los Angeles and San Diego remain an idle landmark, closed a mere nine months after the an earthquake caused a nuclear crisis at the Fukushima Nuclear Plant in Fukushima, Japan. While nuclear danger was a concern at the San Onofre plant, it is appears from the economic data that the plant was closed due to the high fixed costs of restoring the plant, the unpredictable closure timeframe, and a declining price of shale natural gas that could provide a cost-effective, safer alternative to nuclear energy.
Prior to the closure of the plant, SONGS generated an "average of 16 million megawatt hours of electricity annually, making it the second largest electric generating facility in California" according to Davis and Hausman. [6] The 2012 closure came at a time when wholesale electricity costs had declined by 50% from 2007-2012 due to stagnant demand and stable supply. [6] In addition, while nuclear costs margins remained attractive, high fixed costs, greater regulation, and increased fuel and wage costs placed a burden on nuclear energy producers. [6] However, following the closure, an increase of 9 million tons of carbon dioxide were released into the environment per year, while the electricity supply chain struggled to replace San Onofre's prime production capabilities - snuggled between two high energy consumption cities. [6] As a result of an unstable supply chain, a wave of higher energy bills for Southern California customers followed - due to a $350 million increase in costs from the switch to natural gas in the post twelve months. [6] However, declining costs coupled with increased production of natural gas and oil over the past several years have resulted in a continued trend for closures of nuclear plants during the mid 2010s.
While the closure of the plant in San Onofre took place more than six years ago, the battle continues to rage on over mounting costs, regulator fines, and expensive settlements. Furthermore, fires in the San Diego Area caused by power lines have led to the debate over energy costs, with San Diego customers stuck in the middle. [7] This is a reminder that every decision has a multitude of effects, especially when concerning energy production. Costs, pollution, safety, politics, regulation, monopolistic electricity markets, and public opinion can all shape and hijack a debate on energy in any direction. Thus, it is important to examine all the factors at play and make the best decision possible after weighing their consequences.
© Daniel Cohn. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] J. McDonald, "5 Dramas Still Playing Out 5 Years After San Onofre Shutdown," San Diego Union Tribune, 2 Feb 17.
[2] M. Wald, "Nuclear Power Plant in Limbo Decides to Close," New York Times, 7 Jun 13.
[3] K. Rakestraw, "San Onofre Nuclear Generating Station," Physics 241, Stanford University, Winter 2017.
[4] B. Bonanni, "San Onofre Nuclear Generating Station," Physics 240, Stanford University, Fall 2016.
[5] D. Lloyd, "San Onofre Nuclear Generating Station," Physics 241, Stanford University, Winter 2016.
[6] L. Davis and C. Hausman, "Market Impacts of a Nuclear Power Plant Closure," Am. Econ. J. Appl. Econ. 8, No. 2, 92 (2016).
[7] J. McDonald, "Judges: Reject SDG&E Bid to Charge Customers for $379 Million in Wildfire Costs," San Diego Union Tribune, 23 Aug 17.
