Nuclear energy was conceived in hope: hope that the peaceful use of the atom would provide reliable and affordable electricity for millions of Americans and improve our quality of life. That hope has come closer to realization than anyone could reasonably have expected when the process began more than 60 years ago.
Notwithstanding opposition from anti-nuclear environmentalists, nuclear energy is too important to let slip away. It is vital to ensuring a dependable supply of electricity, helping to maintain a diverse energy mix that keeps electric rates as low as possible and ensures that consumers and businesses are not overly reliant on just one or two sources of electricity. The U.S. fleet of about 100 nuclear reactors generates nearly 20% of the nation’s electricity without polluting the air or emitting greenhouse gases. Based on national averages, each reactor employs between 400 and 700 highly skilled workers, has a payroll of about $40 million and contributes $470 million to local economies.
But these achievements are now in danger. Due to the availability of low-cost natural gas as a result of the shale revolution – and generous subsidies and mandates for wind and solar power – we can no longer take for granted that some nuclear plants will continue to operate much longer.
According to a Bloomberg study, 56% of U.S. nuclear energy will be unprofitable within three years. Since 2012, utilities have either shut down or announced plans to close 13 power reactors around the United States, the most recent being the Diablo Canyon nuclear plant in California. As with nuclear plants that have already been prematurely retired, the loss of additional nuclear-generating capacity would be replaced largely with electricity generated from natural gas plants.
From an environmental standpoint, natural gas is less friendly than nuclear energy, which is a zero-carbon source of energy that supplies well over half of the nation’s carbon-free power. It’s also the only zero-emissions energy source that can produce large amounts of electricity around the clock. In contrast, natural gas plants account for one-fourth of the nation’s greenhouse gas emissions from electricity production, and the amount of carbon dioxide and methane emissions will increase as the use of natural gas grows.
To prevent the loss of several nuclear plants, the New York State Public Service Commission recently adopted a Clean Energy Standard requiring investor-owned utilities to pay for the value of carbon-free emissions from nuclear plants by purchasing zero-emission credits from those plants. These payments will help financially support New York’s nuclear power plants and allow them to continue operating during the state’s transition to the clean energy standard that will require utilities produce 50% of their electricity from renewables by 2030.
Other states with nuclear plants at risk of being closed should do likewise. Once a nuclear plant closes, it cannot be restarted. Consider what would happen if the price of natural gas were to rise significantly in the years ahead. Imagine the impact on local communities if one or more reactors is shut down.
A study by two economists, Lucas Davis of the University of California-Berkeley and Catherine Hausman of the University of Michigan, found that after the two-unit San Onofre nuclear plant in Southern California closed in 2012 electricity generating costs rose by $350 million during the year following the shutdown. And carbon emissions rose by 9 million metric tons, which is equivalent to putting 2 million additional cars on the road.
Currently, nuclear energy is at a disadvantage in states with renewable portfolio standards requiring that solar, wind and other renewables supply up to 50 percent of the power. But none of these states credits nuclear energy, even though it’s carbon-free. States should replace their renewable electricity standards with a carbon electricity standard that provides fair treatment for nuclear energy.
These are practical initiatives that would allow nuclear energy to compete fairly in electricity markets. Eliminating market distortions would save consumers money, protect billions of dollars in nuclear power investment and preserve well-paying jobs. It’s past due time to make the changes so that nuclear energy gets equal treatment.
Mark J. Perry is a professor of economics at the Flint campus of The University of Michigan and a scholar at The American Enterprise Institute.
The views expressed by authors are their own and not the views of The Hill.