As the United States moves closer to imposing an economic cost on carbon dioxide emissions in the form of emissions limits on power plants, there will be a shift in the ranking of fuels that are most economic for power generation. And while nuclear’s future is looking more promising, it is not certain that it will be competitive with other forms of energy, even if carbon emissions come at a cost.
But nuclear does not receive the government incentives that other zero-emissions fuels do to help them compete with cheaper energy sources. And if nuclear could provide a critically important source of baseload generation for a targeted lower-emissions future, a case could be made for the federal government to take measures to encourage its continued development.
Experts weighed in on whether nuclear should be subsidized at online discussion hosted by OurEnergyPolicy.org. “The question posed for this dialogue is whether there is a justifiable reason to build new nuclear plants to provide base load power, despite the price differential, to help reduce emissions from fossil fuels (gas, oil and coal),” writes Andy Kadak, Director and Principal of engineering and scientific consulting firm Exponent, who moderated the discussion.
Kadak makes a case for subsidizing nuclear as spending for a public good. And as some participants pointed out, nuclear does receive some subsidies, such as loan guarantees and a $200 per kilowatt hour production tax credit for first movers, in addition to research and development support and a cap on nuclear plant licensee obligations for liability claims under the Price-Anderson Act.
But most responses argued against subsidies for nuclear, for reasons ranging from a federal government cash flow shortage to the emissions profile of uranium mining operations.
The Case for Nuclear Subsidies
“Subsidies distort the market especially for renewables since they are an artificial stimulus which when gone will show that the energy source subsidized can not make it on its own. However, if there is a policy goal of limiting carbon in the environment, why not level the playing field by compensating those sources for the carbon not emitted?” “It is clear that the capital cost of nuclear plants is high but the operating costs including fuel are low,” and “nuclear energy is still a low public risk option.” “If we are serious about reducing CO2 emissions as nuclear energy has demonstrated, should we level the playing field with other clean energy sources? My answer would be yes.” – Kadak
Yes to incentives, no to subsidies
Loan guarantees are a viable alternative:
“It would be nice to have carbon-based production tax credits like wind has, but not necessary as long as there are sufficient loan guarantees.” “There must be increased loan guarantees, upwards of $100 billion, which are not really subsidies, but necessary to spur construction.” – James Conca, Director of the Center for Laboratory Sciences, RJLee Group
Research and development and a carbon tax are viable alternatives:
“Research dollars, yes. A carbon tax to level playing field, yes. But no direct subsidies.” – Roger Faulkner, President & Founder, Electric Pipeline Corporation
Alternatives to subsidies cost taxpayers less:
“Even when subsidies do provide some public benefits, one needs always to ask whether there are alternative methods to reach the same policy goal. Competing options against one another keeps taxpayer costs down and can often boost the pace of innovation to boot. A carbon tax rather than subsidies to politically-selected low-carbon technologies would be an example of a competitive policy versus an earmarked, more politicized approach.” – Doug Koplow Founder, Earth Track
No. The Economics Don’t Make Sense
Nuclear is a “dying technology”:
“Nuclear power is a dying technology with reactors shutting down faster than they are being built. Nuclear power cannot compete with natural gas which is currently running ~$3.60/MMBtu. Nuclear begins to compete, on paper, at twice that number. Since gas is being supplied faster than it is being consumed, only a massive export program will change those economics.” – Stephen Maloney, Partner, Azuolas Risk Advisors
Even with EPA rules in its favor, nuclear costs are too high:
“Nuclear power – in its generation (not in the total fuel cycle) – has no mercury or carbon emissions – it will be helped by these rules [EPA Mercury Rule and Carbon Regulation under the Clean Air Act]. Whether that really matters with the low costs of natural gas and many of the renewables – and the escalating costs of nuclear plants, is the real question. I expect those issues will dwarf any environmental regulatory benefits.” – Scott Sklar, President, The Stella Group
Nuclear might not be the “low-carbon winner”:
“Nuclear is low-carbon, and would benefit from proper greenhouse gas pricing. I am very much in favor of pricing carbon in US energy markets; but the resulting structure needs to be one in which nuclear competes against other ways to reduce carbon. Too many industry proposals want nuclear anointed as the low-carbon winner without having to actually prove its value proposition in the market; this may because they know it is far from certain that nuclear would win as a low-cost carbon reduction strategy.” – Koplow
Nuclear costs keep rising:
“Without subsidies, the technology will not survive in the electricity marketplace”. “The history of decades of investment into nuclear power demonstrates that learning effects for nuclear power are low at best and negative at worst,” and “nuclear power is unlikely to become significantly cheaper. In other words, if there is to be a large scale expansion of nuclear power, it would require a stream of large subsidies”. – M.V. Ramana, Nuclear Futures Specialist, Woodrow Wilson School and the Program on Science and Global Security
Nuclear Comes with Environmental Costs
Full-cycle nuclear is not emissions-free:
“The entire fuel cycle from uranium mining, large scale (material intensive) construction, and waste disposal — has large emissions profiles – including air and water pollution, carbon emissions, thermal heat, and of course long term nuclear waste. Taking in this entire portfolio of emissions along the entire fuel cycle, is not, from a MW/$, perspective the most viable or optimal environmental energy generation choice.” – Sklar
Catastrophic accidents are a risk:
“Nuclear power plants have a number of environmental and other externalities that are not well captured by the capital and other costs associated with nuclear power. These include the risk of catastrophic accidents, radioactive waste disposal, and nuclear weapons proliferation.” – Ramana
Nuclear feedstock must be mined:
“Fossil fuels are burned in various parts of the nuclear fuel cycle: to mine uranium ore, to crush and mill the ore, to enrich the uranium, to create the concrete and steel for the reactor, and to store the radioactive hot nuclear waste. As concentrations of uranium in uranium ore get lower over time with the depletion of higher-grade ores, much more energy will be required to extract and mill the uranium.” “Arguments against nuclear power seem to favor solar and wind power and other renewables development as clean energy sources that are not fraught with these problems.” – Henry M. Goldberg, Independent Consultant
Solar and wind will be viable and scaleable as baseload power alternatives:
“We do not need nuclear power as we move forward in the 21st Century. Renewables such as wind and solar will do just fine to replace fossil fuels, particularly if carbon dioxide and methane emissions are taxed in a reasonable manner. But even without a carbon tax, renewables are cost-competitive today, and will only become more so in the coming years.” – Robert Howarth, Professor of Ecology & Environmental Biology, Cornell University
More Energy Diversity Enhances Energy Security
Nuclear should remain part of the US energy mix:
“At least a minimum number of plants should be in operation at any given time. in some ways they are like an insurance policy, they will operate without the sun or wind. They will operate under conditions that would stop a gas fired facility or even coal fired plants. They can bridge a temporary energy gap that might develop due to events such as an earthquake that would break gas supply lines or destroy coal rail delivery.” – Bruce Best, Director, Ocean Power Systems
You can read the full discussion here.
