An apparently inadvertent set of artificial conditions are combining to sharply restrict the use of nuclear energy in the United States, potentially damaging both our economy and the environment. They are preventing new nuclear plant construction, and even driving existing plants to close. The most recent and glaring example is the Vermont Yankee nuclear unit, which had been a well-run, economical plant that at the beginning of the year permanently ceased operation largely due to cheap natural gas. Thus we traded a large-scale power generator producing essentially zero pollution and greenhouse gases for burning a fuel that emits both air pollutants and significant CO2.
Regulatory ineptitude, electricity markets skewed to favor only the new and very short term, and the removal of international market support for U.S. companies are all dragging down nuclear electricity. Remarkably, this large-scale damage to nuclear flies in the face of numerous studies that see it as necessary to meet climate goals, and of stated federal objectives for nuclear electricity to help limit greenhouse gas emissions.
Federal policy, or what there is of it as no coherent energy policy exists, on the surface favors nuclear generation. In 2005 Congress established $18.5 billion in loan guarantees for new nuclear construction to support first-of-a-kind plants in the United States. The U.S. Environmental Protection Agency's "Green House Gas Abatement Measures," issued a year ago, state that existing nuclear plants plus the five new ones completing construction are a cost-effective way of reducing CO2 emissions. In fact, there is a concern that various factors may cause early retirement of some units and raise CO2 emissions, and thus the EPA has encouraged increasing revenues for plant owners to prevent closures. The president, in his U.S.-China joint announcement on climate, specifically calls out cooperation on advanced technologies, including nuclear, to help reduce emissions.
With the various pronouncements and programs one would think that the value of preserving and expanding nuclear electricity generation was clear. However, a whole other set of conditions and proposed policies are discouraging the use of nuclear energy. The most immediately dangerous one is a failed electricity pricing structure that caused the shuttering in 2013 of Wisconsin's Kewaunee nuclear plant and at the end of last year the Vermont Yankee nuclear plant as well. Three Exelon plants in Illinois are now on chopping block unless the state can find a way to fairly value the electricity they generate. With about half of U.S. electricity markets now competitive-that is, their regulated monopolies replaced by a markets for electricity-suppliers are selected at the lowest cost. But we are not buying fish at the docks. Prices for power must allow large-scale producers the opportunity to maintain plants and invest in new resources. Yet, electricity priced at what might be considered the spot price for natural gas is not sufficient to allow investment in new facilities, or even for sustaining existing units. The EPA claims it would be worth paying an extra $12 to $17 per metric ton of CO2 not emitted, but right now there is no way to value that in the market. Add to that nuclear's exceptional reliability, seen clearly during the 2014 polar vortex, current market mechanisms woefully discount its value.
Another astounding obstacle to nuclear power generation is the EPA's proposed rule on how states can claim credit for avoiding greenhouse gas emissions. This is the president's initiative on climate change, requiring the states to meet emissions goals. Following a puzzling algebra, the EPA proposes that only 5.8 percent of the CO2 emissions avoided by existing nuclear plants, or even those under construction, can be claimed by the states. Thus one of the greatest benefits of nuclear energy, the ability to produce clean power, is in a stroke marginalized. If this makes it to a final rule, we will certainly see accelerated plant closures.
Finally, not only are we throwing up roadblocks to using nuclear energy in this country, we are stifling nuclear technology exports. The U.S. Export-Import Bank has traditionally helped companies like Boeing and Westinghouse, as well as many small businesses, sell their products overseas by helping provide financing. Without this assistance, for example, Westinghouse cannot compete with France, South Korea, or Russia in selling its nuclear reactors, as each of these countries heavily support the financing of their exports. Yet, at the end of June the Ex-Im Bank's charter expired, much to the pleasure of the ultra-conservative elements in Congress that oppose the Ex-Im Bank as a government giveaway. This despite the millions in profits the bank returned to the U.S. Treasury and its boost to companies of all sizes. If we cannot competitively sell our nuclear technology to the rest of the world we will certainly not have a domestic nuclear industry, and any reactors we want to build will be purchased from other nations.
All of the impediments to continued and expanded use of nuclear power can be readily removed. The EPA can rejigger its formulas for greenhouse gas reductions so that nuclear and other clean technologies are properly credited. Markets for electricity can allow accounting both for more stable and reliable supplies, and to provide margins for future development. We can accept that the world does not operate as a totally free market, and to compete we need to support our industries as other nations support theirs. Nuclear energy has provided enormous benefits in clean power as the largest non-carbon source of energy in the United States. We should not allow such bungling to waste this resource.
Ted Besmann has a Ph.D. in nuclear engineering. He is the General Atomics Chair in Nuclear Engineering at the University of South Carolina where he teaches and performs research on nuclear fuels and waste forms. He has had a long-standing interest in energy policy, writing and speaking on issues related to nuclear energy.