The Biden administration is launching a $6 billion effort to rescue nuclear plants at risk of closure, citing the need to continue nuclear power as a carbon-free energy source that helps.
A certification and bidding process was opened on Tuesday for a civil nuclear credit program aimed at rescuing financially distressed owners or operators of nuclear reactors, the US Department of Energy told the Associated Press exclusively, shortly before the official announcement. It is the largest federal investment to save financially distressed nuclear reactors.
Owners or operators of nuclear power reactors that must close for economic reasons can apply for funding to avoid premature closure. The first round of awards will prioritize reactors that have already announced closure plans.
The second round will open to more economically at-risk facilities. The program was funded by $1 trillion from President Joe Biden.which he signed in November.
“U.S. nuclear power plants contribute more than half of our carbon-free electricity, and President Biden is committed to keeping these plants going to achieve our clean energy goals,” Energy Secretary Jennifer Granholm said in a statement. “We are using all available tools to get this country powered by clean energy by 2035, and that includes prioritizing our existing nuclear fleet to enable continuous emission-free electricity generation and economic stability for the communities leading this important work.”
A strong majority of states – about two-thirds – say, one way or another, will help to replace fossil fuels. A dozen U.S. commercial nuclear power reactors shut down in the last decade before their licenses expired, largely due to competition from cheaper natural gas, massive operating losses due to low electricity prices, and rising costs or the cost of major repairs. .
This has led to an increase in emissions in these regions, worse air quality and the loss of thousands of high-paying jobs, dealing an economic blow to local communities, according to the DOE. A quarter or more of the fleet is at risk, the DOE added. Owners of seven reactors currently in operation have already announced plans to retire them by 2025.
Most US nuclear power plants were built between 1970 and 1990 and are costing more to operate an aging fleet. The only nuclear power plant under construction in the United States is in Georgia. Costs increased and another delay was announced in February.
Closed reactors include Indian Point Energy Center in New York, Pilgrim Nuclear Power Station in Massachusetts, Fort Calhoun Nuclear Generating Station in Nebraska and Duane Arnold Energy Center in Iowa. Entergy cited low natural gas prices and rising operating costs as key factors in its decision to close Indian Point last year. New York officials have called for the closure, saying the plant 39 kilometers north of Manhattan poses too great a risk to millions of people who live and work nearby.
Twenty more reactors faced shutdown in the past decade before states stepped in to save them, according to the Nuclear Energy Institute, the industry’s trade association. Illinois is spending nearly $700 million to keep three factories open while additional renewable resources are available.
Low electricity prices are the main cause of this trend, although federal and state policies to boost wind and solar energy have also contributed, the NEI added.
There are 55 commercial nuclear power plants with 93 nuclear reactors in 28 US states. Nuclear power already provides about 20% of the electricity in the US, or about half of the country’s carbon-free energy.
If reactors shut down before their licenses expire, fossil fuel plants will likely fill the void and emissions will rise, which would be a substantial setback, said Andrew Griffith, the DOE’s acting assistant secretary for nuclear power.
While natural gas may be cheaper, nuclear power has not been credited for its carbon-free contribution to the grid and this has caused nuclear power plants to face financial difficulties, Griffith added.
The bailout for the nuclear industry is reminiscent of the assistance the auto and airline industries received after the 2008 economic meltdown and therespectively.
Just a month into his term, former President George W. Bush authorized $25 billion in loans to General Motors and Chrysler from a $700 billion rescue fund initially intended to bail out America’s biggest banks. After President Barack Obama took office in 2009, he appointed a task force to oversee GM and Chrysler, which eventually filed for bankruptcy. Companies received an additional $55 billion in aid and were forced to close factories and overhaul operations before recovering and adding jobs. Most of the industry’s bailout loans have been repaid.
More recently, airlines have received $54 billion in taxpayer money to keep people employed during the pandemic, but have eliminated tens of thousands of jobs anyway, offering incentives for employees to quit or retire early.
David Schlissel of the Ohio-based Institute for Energy Economics and Financial Analysis said he wishes the federal government, before allocating the $6 billion, had looked at whether that money could have been better spent on increasing renewables, battery storage and energy efficiency. projects, which can be done quickly and cheaply to replace fossil fuels.
Now that the money is already set aside for nuclear power plants, federal tax credits for renewables must be extended and more must be invested in energy efficiency, he said, because the faster this is done, the faster the country reduces its dependence. of fossil fuels and their emissions. Also, nuclear plants will eventually retire, some sooner or later, so carbon-free energy sources need to be available for when that happens, he added.
The Sierra Club has a nuclear-free campaign that says nuclear power is not a solution to climate change, and “every dollar spent on nuclear energy is a dollar less spent on truly safe, affordable and renewable energy sources.”
California is scheduled to close its last remaining nuclear plant, Diablo Canyon, in 2025. Officials believe they can replace it with new solar, wind and battery storage resources, although skeptics have questioned whether California’s complete renewable plan can work in a state of nearly 40 million people.
The Department of Energy plans to accept annual applications for the civil nuclear credit program through fiscal year 2031, or until the $6 billion is used up. Owners or operators of nuclear power plants can bid for financial assistance credits to continue operating. To qualify, plant owners or operators need to show that reactors are designed to retire for economic reasons and emissions would increase. The department would also determine, with information from the US Nuclear Regulatory Commission, that they can operate safely.
Maria Korsnick, president and executive director of the NEI, said she believed the federal program would level the playing field for nuclear power and help pave the way for even more intensive policies, such as a proposed nuclear production tax credit under the now stalled Biden administration. . Rebuild Best plan.
Democrats said they hope to resurrect parts of the social and environmental package and win over voters tired of the two-year pandemic and dealing with the worst inflation in decades.