(Nuclear) Power to the People
No greenhouse gases.
Unloved and underappreciated, America’s nuclear reactors supply almost two-thirds of the country’s low-carbon energy -- reliably and without harm to human health or the earth’s atmosphere. Nuclear is the biggest, sturdiest force against climate change there is.
It is also threatened by market forces and short-sighted public policy. If energy costs accurately reflected the price of carbon, nuclear would be competitive. They don’t, and it isn’t, but there are other ways governments can make the energy market fairer and cleaner.
One problem for nuclear is the extraordinarily low wholesale price of electricity -- held down for now by cheap, abundant natural gas, and intermittently pulled lower when wind power floods the grid. Wind generators, buttressed by a $23-per-megawatt-hour production tax credit, can withstand even negative wholesale prices. Natural gas- and coal-fired plants can simply stop operating when there’s a glut, preserving fuel.
But it’s not easy to turn a nuclear plant on and off, and in any case it saves nothing on operating expenses. That’s why nuclear’s best business model is to run at practically full capacity 24/7 -- and why the sector now faces such crippling losses.
Every time a nuclear plant closes -- the latest to be added to the kill list are two in Illinois operated by Exelon Corp., which together have lost $800 million over the past seven years -- its power is replaced mainly by natural gas plants. To the extent that wind or solar (which account for only a small fraction of the U.S. energy mix) can make up for lost nuclear energy, their emissions-lowering potential is wasted: They’re standing in for an energy source that’s already perfectly clean. And once a nuclear plant is closed and its fuel is removed, relicensing and reopening it would be a difficult and expensive proposition.
A well-designed carbon tax would even the playing field. But lawmakers in Congress hate the idea so much, they’re proposing to hold a vote simply to say so on the record. And while several northeastern states participate in a regional cap-and-trade program, the price it sets on carbon emissions is too low to make a difference for nuclear.
States have another way to recognize the value of nuclear power, however: by including it in their goals for clean-energy generation. More than two dozen states have so-called renewable portfolio standards, which set targets for increasing reliance on wind, solar, geothermal and other forms of renewable energy. California and New York aim to draw 50 percent of their power from renewables by 2030.
For historical reasons, including a stubborn antipathy toward nuclear power among many environmentalists, states have no such targets for nuclear power. But if they were to include nuclear in their energy goals -- setting “low-carbon portfolio standards” -- they would be able to raise their clean-energy targets. Utilities would then be required to buy some nuclear energy, allowing the sector to compete.
There are also more tangible reasons for politicians to support nuclear power: Plants support hundreds of relatively high-paying jobs, and nuclear helps keep consumer electricity prices low -- especially when the price of natural gas inevitably rises again. The case for nuclear power rests on its unmatched capacity to provide energy that is dependable, affordable and, above all, clean.
To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at firstname.lastname@example.org.