Part I of IV: Short and Long-term Solutions for Struggling Commercial Nuclear Energy Generators in Restructured Wholesale Markets

Although the U.S. nuclear power industry has struggled to regain footing in the aftermath of Three Mile Island and Fukushima, nuclear power nonetheless plays a critical role in the nation’s electricity sector and will be a necessary resource to utilize in the struggle to reduce carbon emissions and combat climate change. Aside from concerns over finding a permanent waste storage solution, an increasing worry for industry members is how high-cost – but emissions-free – nuclear power is being undercut by low-cost natural gas in restructured wholesale power markets. Without a long-term market-based mechanism to account for the environmental and grid-stabilizing benefits provided by nuclear power generation, America risks losing this important, carbon-free, source of base load generation. Over the course of the next few months, I will upload a series of posts discussing some potential long-term market-based solutions to put nuclear energy on a level playing field, and furthermore argues for a nuclear feed-in tariff as a short-term solution for states with the most financially vulnerable nuclear energy generators.

The second post of this series will provide the background information for this discussion by exploring the development of commercial nuclear power generation and the history of electricity regulation in the United States, both which inform our understanding of why nuclear energy generation is at a competitive disadvantage in restructured wholesale markets. The third post will discuss a set of long-term solutions to fix this problem, as well as set out how a short-term solution like a nuclear feed-in tariff could be used to shore-up the nuclear energy generators that are most at risk of closure due to market conditions. Lastly, the concluding post will summarize the highlights and the core argument of this whole series: if meeting our carbon emission reduction goals is truly a national and global priority – as argued by the Obama administration through the EPA and a majority of climate scientists – then it is necessary to preserve the nation’s existing fleet of emissions-free nuclear energy generation by fixing the market distortions that threaten their financial viability.


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