Nuclear Power and the U.S. Transition to a Low-Carbon Energy Future

In May 2017, the U.S. Energy Information Administration, or EIA, released a daily energy brief noting U.S. nuclear capacity and generation is expected to decline as existing generators retire. Five nuclear plants, with a combined capacity of 5,000 megawatts, or MW, have retired in the past four years, primarily due to competition from low-cost natural gas, unfavorable market policies, and/or local opposition. The Three Mile Island generating station in Pennsylvania is the latest nuclear power plant to announce retirement plans. In addition to these recent retirements, six other plants are scheduled to retire in the next nine years.

While a number of existing nuclear plants are expected to retire in the near future, few new nuclear plants are expected to come on-line. There are four new reactors under construction, two are at the Alvin W. Vogtle generating station in Georgia, and two at the Virgil C. Summer plant in South Carolina. However, both projects have been plagued by delays and cost overruns, pushed Westinghouse—one of the last private companies building nuclear reactors—and its parent, Toshiba, to the brink of financial ruin. Westinghouse is responsible for technology used in about half of the world’s nuclear power plants.

In other words, nuclear energy in the United States appears to be in a death spiral, leading many to question if nuclear power has a future in the country.

However, we cannot afford to write off nuclear energy that plays a vitally important role in the sustainability of states’ electric systems. In 2016, nuclear accounted for nearly 20 percent of U.S. electricity generation, which is carbon free. Among the 30 states with operating nuclear reactors, nuclear made up the largest percentage of electricity generated in six states—Illinois (53 percent), Maryland (40 percent), New Hampshire (56 percent), North Carolina (33 percent), Pennsylvania (39 percent), and South Carolina (58 percent). In several other states, including Alabama, Arizona, Connecticut, Georgia, Michigan, Nebraska, New Jersey, New York, Tennessee, and Virginia, nuclear accounted for more than a quarter of the state’s electricity generation in 2016.

Closing a nuclear power plant has significant economic and environmental consequences. A recent study by two economists, Lucas Davis of the University of California-Berkeley and Catherine Hausman of the University of Michigan, found that electricity generating costs rose by $350 million during the year following the 2012 closure of the San Onofre nuclear plant in California, while carbon emissions rose by 9 million metric tons (equivalent to putting 2 million additional cars on the road). The consequences for the local economy can be equally significant. According to the Nuclear Energy Institute, each nuclear reactor employs between 400 and 700 skilled workers, has a payroll of about $40 million, and contributes $470 million to the local economy.

Without nuclear power, the goal of reducing carbon emissions would become very hard for states to achieve. As nuclear plants retire, there tends to be greater reliance on natural gas, which means more carbon emissions. One exception is California where Pacific Gas and Electric has announced that it plans to replace Diablo Canyon with zero-emitting sources, primarily renewables and energy efficiency. The utility has about eight years to prepare for this replacement. In other states where utilities may not have as much time to prepare, increasing natural gas capacity is considered the fastest option. According to analysis done by the EIA, as nuclear reactors get retired, utilities usually end up replacing the lost electricity by burning more coal or natural gas. 

Nuclear power should be, therefore, considered as a necessary component of an effective decarbonization strategy that preserves zero-carbon power in the near term to pave the way for more advanced solutions in the future, whether they be renewables, energy storage, nuclear, or something else. 

Fortunately, a few states have begun exploring solutions to keep nuclear as part of their electricity generation portfolio. New York became the first state to implement subsidies to support struggling nuclear power plants through zero-emission credits. In April, New York’s Clean Energy Standard went into effect mandating that 50 percent of the state’s electricity come from renewable energy sources by 2030.  At the same time, the state will offer subsides to keep open three nuclear plants that have been suffering economically in a shifting energy landscape. Illinois is providing Exelon and Commonwealth Edison with a $235 million annual credit to keep the Clinton and Quad Cities nuclear plants operating. In this way, New York and Illinois’ approach offers a model of how states can integrate both renewables and nuclear to address climate change.

Other states that are exploring New York and Illinois’ approach are Connecticut, Ohio and New Jersey where nuclear provides most of those states’ carbon-free electricity.

Finding ways to generate power cleanly, affordably and reliably has become a pressing imperative to address climate change. While nuclear energy is not a silver bullet, it can be one among several strategies that states adopt to rein in emissions, including replacing coal power plants with cleaner natural gas plants and investing in renewable energy and other technologies such as storage and carbon capture and sequestration.