For Nuclear, Not Enough Subsidies to Go Around

Exelon says it is closing two of its nuclear power plants after a bid for state subsidies apparently failed. Facing high prices and uncertain supplies of uranium at the same time that natural gas prices are at historic lows and solar costs continue to fall, the whole nuclear power industry will need subsidies to keep operating. Of course there will be subsidies, but governments cannot pay enough to support the entire industry, so most of the nuclear industry will have to close over the next 15 years.

Each of the two Exelon nuclear plants in Illinois is losing $100 million per year and the utility says it can’t pay to refuel the plants. They’ll be retired when the current fuel runs out, one in 2017 and the other in 2018. 

Even before the two Exelon plant closings in Illinois, the next nuclear power station to be retired could be the Fort Calhoun plant in Nebraska, described as the smallest nuclear power plant in the country. Accountants have concluded that that plant is too expensive to operate, and there are reasons for safety fears after damage from a flood and a fire. The plant’s cost structure is too high to compete with solar power in 2016, and no one will be surprised if the cost of solar electricity falls by another 5 percent before the year is over.

The growth in solar capacity is only enough to make up for one or two nuclear plant shutdowns per year, including plants that must shut down as their end of life approaches, so at this point it is mainly natural gas that is making up the shortfall. By 2020, solar capacity will be increasing fast enough that no one will miss the nuclear power plants as they close one by one.