New York nuclear plant retirement could increase natural gas-fired generation

The Indian Point nuclear power plant in New York will permanently shut down during the evening of April 30 when the 1,041-MW Unit 3 will power down, removing capacity that is likely to be replaced by natural gas-fired generation during higher load periods.

"The Indian Point shutdown has been anticipated for some time and we expect few immediate price impacts in the shoulder months," Kieran Kemmerer, power market analyst with S&P Global Platts Analytics, said in an email. "During periods of higher load, we anticipate the nuclear generation to be replaced by gas-fired generation in the region running at higher capacity factors. Additionally, exports to New England from downstate New York are likely to fall as more New York generation flows south into load centers."

The nuclear unit will be shut down at 11pm April 30, a spokesman for the plant's owner, Entergy, said in an email.

The 1,299-MW Indian Point-2 nuclear reactor was deactivated on April 30, 2020.

Retirement rationale

The retirement of Indian Point, about 20 miles north of New York City, was due to political and economic pressure. Governor Andrew Cuomo and environmental groups including Riverkeeper fought for years to shut the plant on safety grounds, arguing an accident so close to the global financial industry in the city would be catastrophic, among other concerns.

"Since my time as Attorney General, I have been deeply concerned with the safety of the Indian Point nuclear power facility," Governor Andrew Cuomo, said in an April 29 statement, adding the plant does not belong "in close proximity to the most densely populated area in the country."

Entergy said Indian Point was struggling financially amid lower wholesale power prices largely due to abundant shale gas that has led natural gas prices to average around $2/MMBtu for an extended period which has pressured power prices downward.

Three additional nuclear power plants in northern New York have remained open because they receive subsidies through ratepayer bills.

The New York Public Service Commission in 2016 created a Clean Energy Standard stipulating that four nuclear units in the state — Exelon Generation's 597-MW Ginna, the 640-MW Nine Mile Point-1, 1,362-MW Nine Mile Point-2, as well as Entergy's 849-MW FitzPatrick — are eligible to receive the zero emissions credit payments. Entergy in 2017 sold FitzPatrick to Exelon.

The New York Independent System Operator determined in December 2017 that Indian Point's retirement did not appear to represent a reliability issue, as its output would mostly be replaced by two gas-fired power plants north of the nuclear plant. The two combined-cycle plants have a combined nameplate capacity of 1,780 MW, or 89% of the nuclear plant's capacity before retirement. The Cricket Valley Energy Center is a 1,100-MW plant in Dover and the CPV Valley Energy Center is a 680-MW plant located in Wawayanda.