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Charles Kennedy

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U.S. Nuclear Power May Not Have A Role In Energy Transition After All

Exelon plans to shut down two Illinois nuclear power plants that it previously sought to keep afloat with state subsidies—and the reasons behind the shutdown raises questions as to the competitiveness of the nuclear industry as a whole.

The parent company of Commonwealth Edison, which last year agreed to pay $200 million to settle bribery charges, had filed documents for the shutdown of the two nuclear power plants with federal regulators, it said in a statement.

“The filings are among the final steps in retiring the plants, which face revenue shortfalls in the hundreds of millions of dollars due to low energy prices and market policies that give fossil fuel plants an unfair competitive advantage,” Exelon said, adding, “Absent a legislative solution, these same market inequities will force the company to close its Braidwood and LaSalle nuclear facilities sometime in the next few years”.

According to the Center for Nuclear Science and Technology Information, nuclear power plants are “one of the most economical forms of energy production”. In fact, according to the Center, the cost of operating a nuclear plant is on par with or below that of fossil fuels.

This raises the question regarding the need for nuclear subsidies. But those figures were from 2012, and much has changed since then.

Cheap natural gas from the shale formations has been a curse for the U.S. nuclear industry. Nat gas has faithfully provided cheap electricity at a much lower cost. On top of that, renewables are undermining the competitiveness of nuclear power, too, thanks to strong government support and generous subsidies.

But authorities such as the International Energy Agency note that nuclear is a necessary component in the low-carbon energy mix of the future and that net-zero plans would be hard to make work without it. In fact, two years ago, the IEA said the decline in global nuclear power generation capacity was “disastrous” for the climate change effort.

Earlier this year, media reported that the Biden administration was aware of the role nuclear had to play in the net-zero drive. Reuters, quoting unnamed sources, reported in May that the White House was mulling over subsidies for nuclear power that could probably take the form of another production tax credit.

Nuclear power plants have generated around 20 percent of America’s annual electricity since 1990. As of December 31, 2020, 94 nuclear reactors were operating at 56 nuclear power plants in 28 states. 

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on July 29 2021 said:
    While nuclear plants do generate cheap electricity, their decommissioning costs horrendous amount of money. Still, global energy transition wouldn’t succeed without major contributions from both natural gas and nuclear energy.

    The United States is, however, lucky in that it has abundant natural gas reserves and can therefore easily rely on gas-fired electricity plants.

    Natural gas like oil will continue to play a pivotal role in the global economy and energy transition around the world.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • John Galt on August 02 2021 said:
    "The parent company of Commonwealth Edison, which last year agreed to pay $200 million to settle bribery charges, had filed documents for the shutdown of the two nuclear power plants with federal regulators, it said in a statement."

    If it felt the need to bribe people to keep operating, it probably was not operating at a profit. It certainly won't be after paying these fines.

    It's time to stop hiding costs from the public. I've been a nuclear fan for many decades, and wish that they would build a few MSRs if only to "burn" our existing stockpiles of long term radioactive waste. However, the price trends don't lie. Petroleum products are about the same price in constant dollars as they were 100 years ago; nuclear has seen similar price trends despite unproven claims that some newer models would be cheaper. Solar and batteries, on the other hand, have been declining in price exponentially for over 60 years and show no signs of slowing for another 20 or more. Unless someone invents "Mr. Fusion" and can sell it at Costco for $49.95, it seems that the likelihood of nuclear being able to compete on price without massive subsidies is between slim and none - and Slim hasn't been seen for years.
  • Independence01776 Duffer on August 02 2021 said:
    In the first half of 2021, new electricity generation in the US was 95% renewable, wind and solar, and 5% natural gas. Market forces are dictating winners and losers and nuclear, with it's requirement for monopoly pricing, it's decade long plan to project completion cycle, makes it completely non competitive.
  • Mark McIsaac on August 05 2021 said:
    Keep in mind that a transition from nuclear to fossil fuels will be 'discouraged' by the green lobby and Illinois could find themselves seriously short of electricity generation. Unless of course there are local gas plants or neighbors at the ready to increase supply.
    Even though replacing nuclear with nuclear seems to be long, costly timeline to operation you need to ask how long and at what (true) cost would it take to build an equivalent generated OUTPUT in IWT/PV and associated infrastructure.
    Ontario is starting a generator refurb and the only reason it is not being aggressively opposed is that we have 2 new (and several other) gas plants idling 24/7 to back up the IWTs scattered across the province and have other baseload supply options.

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