Forget the Trump Bailout—Here’s a Real Solution for Nuclear and the Climate

, director of gov't affairs, Climate & Energy | November 13, 2018, 10:01 am EDT
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This post is a part of a series on The Nuclear Power Dilemma

The Trump Administration’s proposal to bail out uneconomic coal and nuclear power plants is a bad idea predicated on a made-up problem. The real crisis we face is the climate crisis, as the recent IPCC report highlighted in stark terms last month. We must steeply reduce CO2 emissions over the next decade and beyond or we will lock in warming that will have disastrous consequences for people around the word.

We’ve dwindled away our most precious commodity in the climate fight… time. Now there are no easy options; no easy pathways. We are in a world of trade-offs. We must reconcile the science and the clock with the reality of where we are in our transition to a clean energy economy.

For the electricity sector, that means building a lot (a lot a lot) more renewables and increasing energy efficiency. It means modernizing our grid, ramping up energy storage, and phasing out coal and natural gas without carbon capture and storage (CCS). And it also means scratching and clawing for every metric ton of CO2 we can avoid, including guarding against the risk of existing nuclear power plants retiring abruptly and being replaced by natural gas.

UCS’ new report, “The Nuclear Power Dilemma: Declining Profits, Plant Closures, and the Threat of Rising Carbon Emissions” analyzes the economics of the existing nuclear fleet and concludes that a well-designed carbon price or a low-carbon electricity standard will help keep existing nuclear plants that meet high safety standards online.

The Trump coal and nuclear bailout is not a real solution

Earlier this year, the administration issued a notice of proposed rulemaking to the federal electricity regulatory commission (FERC), which would use executive authority to force consumers to buy more expensive electricity produced from coal and nuclear plants.

This is a bailout. Not only would it cost rate-payers (or taxpayers, depending on how the bailout is paid for), but the additional use of coal would hurt public health and increase the heat-trapping emissions that drive climate change.

The administration said they needed to take this unprecedented action because the prospect of coal and nuclear plant closures would jeopardize electricity reliability—keeping the lights on—and make the grid less resilient. This justification has been widely disproved by grid experts and was unanimously rejected by FERC. The administration’s actions appear to be based more on politics than on substance.

Even if this administration abandoned the current architecture of the proposal, jettisoning the coal bailouts and focusing only on nuclear, it would still be a poor approach. Dumping a bunch of rate-payer or taxpayer money into the coffers of private interests without big public benefits, transparency, and accountability is wrong.

Likewise, temporary bailouts for nuclear don’t address the systemic market failure which is a significant part of why nuclear plants are losing money in the first place: zero-carbon benefits are not rewarded in the marketplace in most states. Nuclear is competing with natural gas on an uneven playing field, and it’s losing. A temporary nuclear bailout would do nothing to address the underlying issue; applying a Band-Aid on a deep, gaping wound is not a real solution. Throwing good money after bad is not a responsible use of the public trust; these plants would be right back in the red the minute that money runs out.

What nuclear and other low-carbon technologies need is durable policy support that corrects this systemic market failure.

Real policy solutions that help existing nuclear and the climate

Our new report found that even a very modest carbon price ($25 per ton in 2020, increasing 5 percent per year) would solidify the economic position of the existing nuclear fleet, helping to avoid an over-reliance on natural gas and significant emissions increases. It would also incentivize the development and deployment of renewables, as well as other low- or zero-carbon energy technologies.

One policy option that hasn’t received as much attention and can also deliver similar benefits as a carbon price is a National Low-Carbon Electricity standard (LCES), or “Clean” Energy Standard.  UCS has supported this approach in the past, but as i will explore in a subsequent blog, the policy design matters.  For example, the last federal iteration of this policy was the Bingaman Clean Energy Standard Act of 2012, which gave partial credit to natural gas generation without CCS, which we would not support today, given the country’s growing over-reliance on natural gas, and the significant associated carbon emissions.

UCS modeled two policy scenarios: a modest carbon price case ($25 per ton) and a modest low-carbon electricity standard (60% by 2030/ 80% by 2050). The figure below compares the modeling results for our nation’s electricity generation mix under the policy scenarios to the 2017 generation mix, a reference case in 2035 (which includes the 5 nuclear plants slated to retire by 2025) and to three ‘early nuclear retirement scenarios’ that assume an additional 13-26 percent of the current nuclear fleet retires by 2026 because of economic reasons (before their current 60-year operating licenses expire). The early nuclear retirement scenarios are based on our analysis of the profitability of the existing fleet.

Both the carbon price and the LCES help maintain existing nuclear generation at reference case levels through 2035. In the case of the LCES, we see additional reductions in natural gas and additional development of wind and solar. How much the generation mix shifts to low-carbon resources is a function of the stringency of the policy; a higher carbon price or a more ambitious LCES target would show even more renewables.

The figure below shows the emissions trajectory of the different scenarios, including a carbon price and an LCES. Note that our early nuclear retirement scenarios show a 6 percent increase in emissions at a time when we need to be on track to achieve a 90 percent reduction by 2040 (shown here as the National Research Council Carbon Budget) to stay on track with our climate goals. The figure also shows that a 60 percent by 2030 LCES provides similar emissions reductions as the $25 per ton electricity sector carbon price, but note that those policies only get us a little more than half way to our emission reductions target by 2035. More stringent policies or additional complementary polices are required.

A national LCES is good for red states

UCS has been a leading advocate of renewable electricity standards (RES) around the country for many years, and supported the last federal iteration back in 2015, the Udall 30 by 2030 bill. We continue to believe that Congress should pass a strong national RES to help incentivize more renewables development, reduce our nation’s growing over-reliance on natural gas, and aggressively bring down carbon emissions. But, a properly designed national LCES can provide similar benefits, while also solidifying the economic position of existing nuclear plants that meet strict safety standards (preventing abrupt closures). And while we did not analyze this in our modeling, an LCES could also provide an incentive for developing new low and zero carbon energy technologies, including potentially new nuclear reactors and carbon capture and sequestration technologies (CCS), giving us more tools for the climate fight.

A national LCES can broaden the tent of support for low-carbon electricity in parts of the country that are not as far along in their transition to a clean energy economy. This policy helps mitigate some of the imbalances to states with less renewable development relative to a national RES. And it gives many red state congressional delegations a clean energy policy that may be a better fit for their state, freeing up badly needed support from conservatives.

For example, a strong national LCES would provide a lot of benefit to states like South Carolina and Tennessee, for which nuclear power makes the biggest contribution to their electricity mix, with very little coming from renewables. These states could be in position to benefit economically from this policy, while an LCES would also incentivize additional renewables and/or low-carbon development in those states as they prepare to eventually replace those nuclear plants when their useful life expires.

A strong national LCES would also benefit states like Iowa and Kansas, which have enormous wind power as well as nuclear, but also have a lot of coal in their electricity mix. A national LCES would help that existing nuclear stay online, as well as retire some of that expensive and harmful coal generation, while also building on the amazing 36-37% wind energy in their mix. Iowa and Kansas could also easily comply with an LCES and will benefit economically.  All of the states below would realize significant public health benefits that come with trading off coal for renewable energy development.

Electricity Generation Share by Sources, 2017 (source: The Nuclear Power Dilemma)

STATE Nuclear Coal Nat. Gas Hydro Wind Solar Biomass Other
SC 58% 19% 17% 3% 0% 0% 3% 0%
TN 40% 35% 13% 10% 0% 0% 1% 0%
IA 9% 45% 6% 2% 37% 0% 0% 1%
KS 21% 38% 5% 0% 36% 0% 0% 0%

We need to create incentives for states to reduce investments in coal and natural gas, maintain the low-carbon generation they already have, and substantially increase investments in new low or zero carbon technologies. Complementary policies to boost energy efficiency will also be needed. With a national LCES, several years from now the table above could show a significant reduction in generation from coal (and natural gas), while holding nuclear generation steady, and substantially increasing the contribution from renewables.

Absent a national LCES or some other policy that incentivizes and protects low carbon generation, the electricity mix in states like South Carolina and Tennessee is likely to go in the wrong direction for the climate.

We need real solutions, not bailouts

Our new analysis of the economics of the existing nuclear fleet clearly show there’s a risk of abrupt retirements, and that the generation would be replaced primarily by fossil fuels. That’s a climate problem, but it’s also a public health problem, it’s a jobs concern, there are tax revenue implications for communities, and much more. States like Illinois, New York and New Jersey avoided abrupt nuclear retirements by working with stakeholders to reach agreements that spawned real policy solutions. Pricing carbon and creating national standards for low emissions electricity are real policy solutions that would protect existing nuclear that can be implemented at the state or the federal level.

These policies don’t cost taxpayer money, and the modeling we’ve done on the electricity price impacts has shown no significant increases.

Juxtapose these real policy solutions with the coal and nuclear bailout proposed by the Trump administration that will cost substantial rate-payer or tax payer money, will NOT protect nuclear in the long-term, and will assuredly exacerbate the climate crisis while increasing threats to public health.

The choice is clear. We need real policy solutions, not bailouts for political supporters.

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  • TimS

    What should matter is not the intention, but the result.
    Those who have advocated for intermittent renewables, have (wittingly or unwittingly) favored natural gas(methane(CH₄): 70x worse than CO₂)/fracking over carbon-free nuclear energy, a crime in the face of Climate Change.

  • Ben Jamin’

    I support nuclear, but not blindly or unconditionally. The best solution is to internalise uninternalised costs. This applies to all sources of energy use. Fossil fuels, nuclear and renewables. The market will then do its job and allocate resources at least cost.

    A tax on CO2 is a necessity, but so is renewables paying their system costs.

    • A tax on CO2 is a necessity

      But it must not enrich civil services, whose self-image as “the quality” would be aggravated and whose uncharitable donations to the UCS would increase, binding it with golden handcuffs to remain effectively pro-gas.

    • grumpy

      There is a deeper answer there. Renewables must pay their system costs, and the easiest way to start is for them to help grid balancing. That’s a software solution. Solar was built out with zero knowledge of power engineering or grid operations. But companies like have solutions.

    • falstaff77

      Yes, in such a case, the market would move fossil fuel consumption away from the CO2 tax, likely to Asia, Africa, and Russia, who would burn the fuel less efficiently. The problem is a global one.

      New, advantageous technology is the only phenomenon to ever rapidly replace the entrenched status quo in global history. International taxes certainly dont qualify. Nuclear power does.

  • Richard Schieffer

    What is the half-life of nuclear fuel? How long will it be dangerous? Is that danger longer than other anthropogenic negative impacts? What will we write on the door of the storage containers? Languages only last a few thousand years. Is radioactive waste the biggest threat to life on Earth?

    • Ben Jamin’

      All waste from nuclear is contained an accounted for. It is also tiny compared to all other sources. I’d rather live next to a NPP/waste storage than a factory making solar panels in China.

      The unspent fuel isn’t “waste”. Its a resource that put into the right reactor technology has enough energy to power the Earth for the next 70 years. The fission products can be used as heat batteries, or if separated turned into valuable products. It all boils down to economic choice. Obviously the more radioactive something is, the quicker it decays. Fission products are all safe after 300 years. The transmuted plutonium in the unspent waste is the real issue regarding long term storage. I don’t think its much of a problem if stored, but I’m almost certain it will all be used as fuel at some point in the not too distant future. Technologies to do this are being commercialized now.

      Here’s my favorite. If you read about how it works, it may make you more optimistic about the future.

      • Jag_Levak

        There are varying figures, but it looks like there’s roughly 300,000 metric tons of spent fuel, increasing at around 10,000 tons per year. It is unlikely the first of the molten salt fast reactors will be in production much sooner than 10 years from now, and assuming the conventional reactors operating at that time have another 20 average years of service, we could easily top 600,000 metric tons of spent fuel before the last of them are retired. That would be over 1500 terawatt-years of heat–which would be more than double the amount of heat humans have gotten from all fossil fuel sources combined thus far. Add in the supply of depleted uranium, and it could be more than 15 times the historical fossil fuel heat energy total. I have the feeling it’s going to take a few centuries to digest that much energy.

        I like the Moltex, but there’s a U.S. MSFR which I also like, and unlike the Moltex might also work in cargo ship and marine reactor applications.

      • I’m also a strong advocate of the Moltex Stable Salt Reactor Wasteburner. This webinar explains how they got the cost so low – by eliminating safety hazards:

    • Is radioactive waste the biggest threat to life on Earth?

      It’s not in the top 100.

      Ocean units are helpful in getting a handle on this. The natural radioactivity in the ocean is exceedingly low, exceedingly dilute, so an ocean unit of radioactivity is very small in terms of planetary radioactivity. It’s 2200 megawatts. The radioactivity naturally in the continents is tens of thousands of ocean units, tens of terawatts.

      If the spent fuel load in container 1408 were all ten years retired …

      • grumpy

        There is 250 million tonnes of RECOVERABLE RENEWABLE Uranium in the ocean. It’s dilute… but a Japanese polymer can absorb it slowly, with no ecological side effects, aside from making the ocean less radioactive. That makes nuclear power more renewable than wind or solar.

      • Jag_Levak

        The total supply of uranium in seawater is more like 4 – 4.5 billion tons, but it is too early to say what portion of that would be realistically recoverable. We might never reach an extraction rate that equals the replenishment rate, so the net depletion rate for the oceanic reserve might wind up being close to zero percent.

        And the Japanese are not the only ones looking at this:

    • … it would be producing 1920 watts. All of this originates as hard radiation and is converted to heat as it punches through UO2, zirconium alloy, steel, concrete, and steel.

      That’s one micro-ocean-unit.

    • jimhopf

      Nuclear waste will be dangerous for a far shorter time period than coal or solar’s toxic wastes, which will remain hazardous forever.

      It’s also vastly smaller in volume. It’s also in a much easier to contain chemical and physical form. It’s also managed and disposed of with infinitely more care, nuclear being the only industry that is required to ensure that its wasteswill remain contained for as long as they remain hazardous. NRC has concluded that Yucca would meet that impeccable, unprecedented requirement.

      Given all the above, other energy sources’ waste streams (such as coal ash piles and probably even solar’s wastes) will have a far greater impact than nuclear waste will, both over the short term and hundreds of thousands of years from now.

      Nuclear waste the biggest threat to mankind?? Is that a joke? It’s negligible! Seriously, how do such ideas get into people’s heads? A testament to a profound and highly effective propaganda campaign.

  • Dr. A. Cannara

    “We’ve dwindled away our most precious commodity in the climate fight… time.”

    Yes, and UCS took a leadership position in wasting valuable time via scurrilous activities against nuclear power. I used to support UCS and even donated consulting to them on used-fuel policy, but their presentments to various agencies and authorities around the US were manipulative and anti nuclear power.

    Hope they decide to publicly apologize to the American people and the various species their support of wind/solar silliness has impacted. We’ll see.

    Dr. A. Cannara
    650 400 3071

    • Ben Jamin’

      Angels rejoice in heaven, they don’t rub noses in it 😉

  • solodoctor

    Thanks for a thorough analysis of the various options our country’s policy makers need to consider if there will be any chance to minimize the impact of climate change.

    I must note, however, that the proposal to continue to rely on nuclear power as part of the mix is troubling. Has the author, and his colleagues at UCS, forgotten the work done by Dave Lochbaum and others at UCS in 2014-15? Dave consistently found that the NRC was NOT engaging in strict oversight of the industry. The agency was more interested in protecting the profits of the nuclear power plants than in upgrading their safety protocols and procedures with an eye towards protecting the public’s welfare.

    In my opinion formulating a plan predicated on ‘strict enforcement’ of safety rules by the NRC is wishful thinking. How can you expect an agency to alter its long-standing culture, especially when the current administration is so tilted in favor of the industry? As a 30+ year member/supporter of UCS this lack of judgment is very troubling. It is more like pie in the sky optimsm than rational, scientific analysis.

    • Joffan

      You have been seduced by the drama of anti-nuclear conspiracy theory.

      With zero evidence, you assert that the NRC was in cahoots with the plant operators. Perhaps you have an unrealistic view of what a regulator does, or misunderstand how small the risks are we are talking about. Indeed, the NRC sometimes forgets that it should enable safe operation, not simply punish shortfall, and its sabotage-level barriers to new plant build are such an example.

    • grumpy

      I regret that 3.5 million people died this year from the alternatives to nuclear power- fossil fuel air pollution. That neglects the effect of climate pollution.
      So far this year, according to WHO, zero people died from nuclear power. Same as last year.

      I’m tired of fake news from Dave Lochbaum about the supposed dangers of nuclear power, which lacks any concern for living human beings suffering from the alternatives.

      Coal fired plants emit 10,000 times as much radiation, and none of it is properly contained. The Uranium and Thorium in your lungs is from coal fired plants, not nuclear. The radioactive ash piles washing down stream RIGHT NOW in North Carolina are from coal.

      Stop real problems. Stop the fake news from the ilk of Lochbaum.

      There may be 70% chance we could fix climate with wind, solar, and batteries…. and no nuclear. But that is like playing Russian Roulette with the whole planet. We can’t take a 30% chance of destroying Earth just because we don’t like the people who brought us nuclear power. (SOme of whom were regrettably also involved in an insane arms race– the real reason for my former attacks on the nuclear industry.)

      • Jag_Levak

        I would say the merchants of nuclear fearmongering fake news would be people like Caldicott, Gundersen, Mangano, Sherman, Busby, Wasserman, Grossman, Jacobson, Mousseau, Moller, Makhijani, Bertell, Durnford, and the professional deceivers of Greenpeace, Enenews, PSR, etc.–people who know they are exaggerating, distorting, or outright fabricating untruths. I would be more inclined to characterize Lochbaum as an animated critic of particular aspects of the way nuclear power has been done. I have not seen him engage in what I would call fake news. So far as I can tell, every incident and design weakness he has described has been grounded in fact and engineering. In his role as critic, Lochbaum had no obligation to balance every problem with rosy accounts of things done right, nor to compare the magnitude of the nuclear problems with problems in other industries. I also think critics who deal in facts make a valuable contribution to public discourse, and I would not want them silenced. Even Alvin Weinberg had misgivings and criticisms about the direction civilian nuclear power was headed.

        I get the impression from your comment that you used to be an anti-nuke. I was too. I now think my previous position was mistaken, but I put the blame for that on those who played fast and loose with the truth, and on myself for having been too gullible, and too sloppy in my thinking. It was critics who helped me to see my errors, and looking at rational criticisms still informs my view that some ways of doing nuclear are better and some are clearly worse than others. And when some of the reactor designs that I feel have great potential finally reach demonstrations stage and have some real-world data to work with, I will be interested to hear what people like Dave Lochbaum have to say about them.

        In the meantime, I’m pleased to see that the UCS has taken this step of highlighting the important low-carbon contribution from old-tech nuclear, despite their reservations about it. Having been critics for so long, they have credibility in making such a statement that most nuclear proponents do not. Even the anti-nukes who are not happy they’ve taken this step cannot plausibly dismiss them by accusing them of being nuclear industry shills.

      • Fanandala

        “cannot plausibly dismiss them by accusing them of being nuclear industry shills.”
        Not plausibly, but the facts have never really bothered them in the past, why would they do so now?

    • jimhopf

      If NRC’s intentions were to have the nuclear industry be highly profitable at the expense of public safety, they’ve failed miserably on both counts.

      Profitable?? Nuclear plants are losing money and are closing, due to high and ever-increasing costs (which are primarily due to ever increasing regulatory burdens).

      Lack of public safety (harm to public health and the environment)?? US nuclear power has not caused a single public death or had any impact on public health over it’s entire 60-year history. It also has negligible climate impact. Meanwhile, US fossil generation has caused several thousand deaths, along with global warming, over that same time period.

      The real truth, of course, is that nuclear regulations and oversight is vastly more strict (and expensive) than that applied to any other industry.