Nuclear Energy in the U.S.: Recent Plant Closures and Policy Decisions

Last updated: February 13, 2018

Aging nuclear plants that cannot compete with low-cost energy sources are closing around the country. In some cases, states are subsidizing them in a bid to save jobs, avoid increasing emissions and protect local sources of tax revenue. As more nuclear plants become uncompetitive, more states will face this decision on the fuel source that the country relies on for about one fifth of its electricity, its largest low-emissions energy source.

Why U.S. Nuclear Plants Are Closing

The current boom in U.S. natural gas production has flooded the markets with a cheap new source of energy, driving down wholesale electricity prices. The rapidly falling costs of wind and solar power in many regions of the country, along with flat electricity demand due to decreasing energy consumption, have also made the cost of nuclear power uncompetitive.

A significant regulatory restructuring over the last 20 years introduced even more competition with nuclear power in wholesale electricity markets. In the 1990s, for the first time, deregulation in some states allowed non-utility generators to sell electricity to utilities, fundamentally disrupting the monopoly utility model. New cheaper sources of energy drove down prices and made nuclear energy less economically competitive.

Natural gas and renewables have replaced most of the generating capacity of the five nuclear plants that have closed since 2013:

Four more nuclear plants are slated to retire over the next ten years: Pilgrim in Massachusetts and Oyster Creek in New Jersey by 2019; Indian Point in New York by 2021; and Diablo Canyon in California by 2024-2025. All nine of these plants (five that have closed since 2013 and four that plan to retire within ten years) total over ten gigawatts of generation, representing approximately ten percent of total U.S. nuclear capacity.

Policies Affecting the Future of Nuclear

Climate policies mandating emissions reductions are also having an impact on the future of nuclear power. Federal emissions policy is in flux, however, as the Trump administration has proposed repealing the Clean Power Plan. In deciding whether to maintain or retire their nuclear power plants, several states have each chosen different paths:

  • New York, which has committed to produce 50 percent of its power from renewables by 2030, is keeping three upstate nuclear plants open in part because if it allowed them to retire wind and solar power might not be able to scale up fast enough to replace the lost nuclear capacity, leaving a void that could be filled by natural gas. The subsidies will total $7.6 billion over 12 years.
  • California will close Diablo Canyon, its last remaining nuclear power plant, by 2024-2025. The plant provides about 9 percent of California’s electricity, but is losing revenue due to the rapid growth of gas and renewables. Utility PG&E said it will replace the plant’s capacity with investment in a greenhouse-gas-free portfolio of energy efficiency, renewables and energy storage.
  • Illinois passed a sweeping energy bill in December 2016 that includes $235 million annually for ten years in financial support for two nuclear power plants that were at risk of closing. Exelon, the owner of the Clinton and Quad Cities nuclear plants, warned regulators of the potential relocation of 1,500 jobs out of state should the plants close.
  • New Jersey lawmakers have introduced a bill that would provide subsidies for the state’s struggling Salem and Hope Creek nuclear plants. The plants would otherwise close because of competition from low natural gas prices. The current version of the bill includes new standards for energy efficiency, credits for solar along with a provision allowing neighborhoods to invest in solar projects, and financial assistance for offshore wind projects.

The Future of the U.S. Nuclear Fleet

Status of three plants in different phases of construction:

Possible future closures:

  • Three Mile Island Nuclear Plant in Pennsylvania failed to win enough bids at a PJM capacity auction in May 2017. Owner Exelon says the plant will close by 2019 unless the state steps in.
  • Ohio utility FirstEnergy’s David-Besse nuclear plant is headed for early retirement, , although no closure date has been set yet. The utility’s two other nuclear plants seem to be facing a similar trajectory.
  • NextEra Energy of Florida announced that its Duane Arnold Energy Center nuclear plant in Iowa will likely close in 2025 when the plant’s contract with Alliant Energy ends. NextEra does not believe the utility will renew the contract, as other forms of energy have become increasingly competitive.

Announced closure reversals:

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