Roughly half of U.S. nuclear reactors are racking up yearly financial losses equivalent to $2.9 billion, according to a new report.
Nuclear power plants earn $20 to $30 a megawatt-hour for their electricity, but they cost about $35 a megawatt-hour to operate, according to a Bloomberg New Energy Finance report. That means many reactors are operating at a financial loss.
Proponents blame favorable government regulations and subsidies that benefit nuclear energy competitors.
“The Bloomberg analysis shows demonstratively that the problem isn’t nuclear energy economics, which continue to be reliability good value,” David Blee, executive director of the U.S. Nuclear Infrastructure Council (NIC), told The Daily Caller News Foundation.
Blee said BNEF’s figures were roughly accurate, but says government intervention in electricity markets made nuclear reactors uneconomical. Blee said nuclear reactors provide valuable benefits not factored into their margins.
“It is the dysfunctional markets that nuclear units are operating in, namely subsidized renewables, disadvantageous state portfolio mandates, uneven market playing fields and an historically unprecedented glut of shale gas at sustained low prices,” Blee said.
In the past two years, six states have shut down nuclear plants, and “dozens” of other plants across the U.S. are facing challenging economic conditions, placing them at risk of imminent retirement. The Three Mile Island nuclear power plant announced in late May it would shut down in 2019 due to these challenges.
The Bloomberg report noted that shutting the unprofitable reactors down would “easily vanquish” all carbon dioxide (CO2) emissions reductions the U.S. has made since 2012.
“The report also show the enormous consequences to clean air, jobs dislocation and electricity reliability if the bottom falls out for the nuclear fleet,” Blee said. “Which is why ongoing initiatives such as Perry’s Grid Review, new market thinking at FERC [Federal Energy Regulatory Commission] and state actions mirroring measures to extend nuclear baseload in New York and Illinois can’t come too soon.”
State governments such as Illinois and New York have already taken action to save their nuclear reactors, citing the same benefits as NEI. Each Illinois taxpayer will have to pay between $0.25 to $4.54 a month to keep the nuclear plants open, according to The Chicago Tribune.
The U.S. currently operates 99 nuclear reactors across 61 commercially-operated nuclear power plants, according to the Energy Information Administration. The average nuclear plant employs between 400 and 700 highly-skilled workers, has a payroll of about $40 million and contributes $470 million to the local economy, according to the Nuclear Energy Institute.
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