Nuclear Energy in the U.S.: Expensive Source Competing with Cheap Gas and Renewables

Nuclear Energy

Last updated: April 02, 2019

The United States generates about one fifth of its electricity from nuclear power, making it the country’s largest low-emissions energy source. The national rate of nuclear power consumption has remained relatively constant since around 1990. Since 2013, six nuclear plants have closed in the U.S. and have been replaced mainly by natural gas and some wind, solar and energy efficiency measures. Now stakeholders are deciding whether or not nuclear energy is a necessity in the nation’s current and future power grid. While some government-sponsored research finds that nuclear energy is necessary to cut carbon dioxide emissions, other research shows that the world can achieve its climate goals by completely transitioning from fossil fuels and nuclear to wind, solar and other renewable energy sources.

Nuclear Capacity and the Power Grid

Many nuclear plants are aging and nearing the end of their lifetimes. Fifteen nuclear plants (six that have closed since 2013 and nine that have announced retirement between 2019 and 2025) represent just over eighteen gigawatts of generation and approximately eighteen percent of total U.S. nuclear capacity. They face high operating costs and competition from cheaper gas and renewable energy sources, making the business of running many of the nation’s nearly 100 nuclear plants unprofitable.

The conventional model for operating the power grid revolved around “baseload” capacity — supplying the grid’s minimum power requirements from plants that need to run continuously because they cannot easily start and stop. There were mostly coal and nuclear power plants. But that model is becoming obsolete as renewables and natural gas supply more and more power to the grid. These technologies can ramp up and down quickly, which is another reason baseload power is becoming obsolete. Innovations like active grid management, regional transmission lines and energy storage provide the coverage that baseload power previously generated. As gas and renewables ramp up and the grid becomes more efficient, the need for large baseload generators drops substantially.

Energy Pathways to Achieve Emissions Reductions Goals

Policymakers and experts differ on whether nuclear energy is needed to achieve national and international emissions reduction targets. Some consider nuclear as an indispensable low-carbon energy source that must maintain, or even increase, its proportion of the global energy mix. There is concern that not all nuclear capacity slated for retirement will be replaced with other zero-emissions sources such as wind and solar, but rather with natural gas. Others view nuclear as an antiquated, expensive option that survives only through subsidies and cannot ultimately compete with lower-cost forms of energy. Providing subsidies to nuclear power, they say, is simply wasting money that could be spent building out renewables.

Some studies find the energy transition can happen without nuclear:

  • The 2015 U.S. Deep Decarbonization Pathways finds it is possible to cut emissions 80 percent below 1990 levels by 2050 in a “high renewables scenario” by deploying roughly 2,500 gigawatts of wind and solar generation, or 30 times present capacity.
  • Stanford University atmospheric scientist and civil engineer Mark Jacobson argues that wind, solar and hydropower are low-cost sources for the U.S. to transition to 80 percent renewable energy by 2030 and 100 percent by 2050, all without nuclear or fossil fuels.
  • A study by researchers at the University of Delaware that models combinations of renewables (wind and solar PV) with storage on a large U.S. grid system finds that, at 2030 technology costs and surplus electricity displacing gas, renewables can power the grid up to 99.9 percent of the time at costs comparable to today’s while optimizing the mix between generation and storage. This study in on the PJM Interconnection, a regional grid in the U.S. serving parts of Mid-Atlantic and MidWestern states.
  • A study out of Japan finds that cutting greenhouse gas emissions in half by 2050 without nuclear energy or carbon capture and sequestration (CCS) is technically feasible but would be costly, given the additional investment needed for new technologies.

Other studies find nuclear energy is a necessary part of the energy transition:

  • A study from the MIT Energy Initiative concludes that climate change will be much more difficult and expensive to solve without nuclear energy incorporated into the global portfolio of low-carbon energy technologies. The study includes recommendations for how government can support nuclear energy, which the authors say is crucial.
  • A study by a group of researchers led by Chris Clack rebuts the notion that the world can make a low-cost transition to energy systems that rely almost entirely on solar, wind and hydropower. The study finds that a diverse portfolio of clean energy technologies, including nuclear, is a more feasible pathway to a low-emissions energy system.
  • The International Energy Agency (IEA) includes nuclear with other sources of low-emissions energy in its technology roadmap.
  • Under President Obama, the U.S. Environmental Protection Agency considered nuclear an integral part of the Clean Power Plan (CPP), a national policy to reduce carbon emissions from the electric power sector 32 percent below 2005 levels by 2030. President Trump has begun the process of dismantling the CPP.

Nuclear Energy has Low Carbon Emissions, but is Expensive and Risky

Nuclear plants do not emit the high levels of carbon dioxide created by fossil fuels. They also have a high “capacity factor,” meaning they generate more consistent electricity over a given period of time relative to intermittent sources like solar and wind. While this can be an advantage in providing power at a consistent rate, it does not necessarily compensate for the higher cost of nuclear compared to gas and renewables.

The levelized cost of nuclear power is relatively high compared to other energy sources: the minimum cost per megawatt hour to build a new nuclear plant is $112, compared to $46 for utility-scale solar, $42 for combined cycle gas, and $30 for wind. Nuclear power is only able to remain viable in power markets due to subsidies. Capital costs to build nuclear plants can run into the tens of billions of dollars, and are much more expensive compared to wind, solar and gas plants. Continued government support for building new plants and operating existing ones is a key factor in maintaining the U.S. nuclear industry.

Nuclear energy also faces the difficult challenges of disposal of fissile waste, and the risk of meltdown from either earthquakes and tsunamis or terrorist attacks. Many Americans also do not want to live near a nuclear power plant for fear of exposure to radioactive material in the unlikely event of an accident. Some communities that are home to nuclear plants, however, are strongly supportive since they provide jobs and tax revenue.

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