Biden launches $6 billion effort to save nuclear power plants and help fight climate change
The Biden administration is launching a $6 billion effort to save nuclear power plants threatened with closure, citing the need to pursue nuclear power as a carbon-free energy source that helps.
A certification and bidding process opened on Tuesday for a civilian nuclear credit program to bail out owners or operators of financially distressed nuclear reactors, the U.S. Department of Energy told The Associated. Press exclusively, shortly before the official announcement. It is the largest federal investment to save financially troubled nuclear reactors.
Owners or operators of nuclear reactors that should be closed for economic reasons can apply for funding to avoid premature closure. The first round of rewards will prioritize reactors that have already announced their intention to shut down.
The second round will be open to the facilities most at economic risk. The program was funded by President Joe Biden’s $1 trillion.which he signed into law in November.
“U.S. nuclear power plants provide more than half of our carbon-free electricity, and President Biden is committed to keeping these plants running to meet our clean energy goals,” said Energy Secretary Jennifer Granholm. , in a press release. “We are using every tool available to power this country with clean energy by 2035, and that includes prioritizing our existing nuclear fleet to enable continued emission-free electricity generation and economic stability for people. communities leading this important work.”
A strong majority of states – about two-thirds – say, one way or another, will help replace fossil fuels. A dozen US commercial nuclear reactors have shut down in the past decade before their licenses expired, largely due to competition from cheaper natural gas, massive operating losses from low oil prices electricity and escalating costs, or the cost of major repairs.
This has led to increased emissions in these areas, poorer air quality and the loss of thousands of well-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. The owners of seven reactors currently in service have already announced their intention to retire them until 2025.
Most US nuclear power plants were built between 1970 and 1990 and operating an aging fleet is more expensive. The only nuclear power plant under construction in the United States is in Georgia. Costs skyrocketed and another delay was announced in February.
Shut down reactors include the Indian Point Energy Center in New York, the Pilgrim Nuclear Generating Station in Massachusetts, the Fort Calhoun Nuclear Generating Station in Nebraska and the 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 called for the closure, saying the plant 39 miles north of Manhattan posed too great a risk to millions of people who live and work nearby.
Twenty other reactors have been shut down over 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 plants open while additional renewable resources come online.
Low electricity prices are the main cause of this trend, although federal and state policies aimed at stimulating wind and solar have also contributed, the NEI added.
There are 55 commercial nuclear power plants with 93 nuclear reactors in 28 US states. Nuclear energy already provides about 20% of electricity in the United States, or about half of the country’s carbon-free energy.
If reactors close 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, acting assistant secretary for nuclear energy at the DOE.
While natural gas may be cheaper, nuclear power has not been recognized for its carbon-free contribution to the grid and that has caused financial hardship for nuclear power plants, Griffith added.
The nuclear industry bailout is reminiscent of the help the auto and airline industries received after the 2008 economic collapse and therespectively.
With barely a month left in office, former President George W. Bush authorized $25 billion in loans to General Motors and Chrysler from a $700 billion bailout fund originally intended to save the largest American banks. After President Barack Obama took office in 2009, he appointed a task force to oversee GM and Chrysler, which eventually declared bankruptcy. Businesses received around $55 billion in additional aid and were forced to close factories and renovate operations before recovering and creating jobs. Most industry rescue loans have been repaid.
More recently, airlines received $54 billion of taxpayers’ money to keep people employed during the pandemic, but they still cut tens of thousands of jobs by offering incentives to employees to resign or retire early.
David Schlissel of the Ohio Institute of Energy Economics and Financial Analysis said he wished the federal government, before allocating the $6 billion, had analyzed 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 money is already set aside for nuclear power plants, federal renewable energy tax credits should be expanded and more should be invested in energy efficiency, he said, because the sooner that is done, the faster the country will reduce its dependence on fossil fuels and its emissions. Also, nuclear plants will eventually retire, some sooner rather than later, so carbon-free power sources must be in place for now, he added.
The Sierra Club has a nuclear-free campaign that says nuclear is not a solution to climate change, and that “every dollar spent on nuclear is one less dollar spent on truly safe, affordable and renewable sources of energy. “.
California is set to shut down its last remaining nuclear power plant, Diablo Canyon, in 2025. Officials believe they can replace it with new solar, wind and battery storage resources, though skeptics question whether the all-inclusive renewable plan of California can operate in a state of nearly 40 million people.
The Department of Energy intends to accept annual applications for the Civil Nuclear Credit Program through fiscal year 2031, or until the $6 billion is exhausted. Owners or operators of nuclear power plants can bid on financial assistance credits to continue operating. To be eligible, plant owners or operators must show that reactors would need to be taken out of service for economic reasons and that emissions would increase. The department would also determine, with input from the United States Nuclear Regulatory Commission, that they can operate safely.
Maria Korsnick, president and CEO of NEI, said she believes the federal program will level the playing field for nuclear energy and help pave the way for even more intensive policies, such as Nuclear Production Tax Credit Proposed in Biden’s Now Stalled Draft. Plan Building back better.
Democrats said they hoped to resurrect parts of the social and environmental package and win over voters weary of the two-year-old pandemic and facing the worst inflation in decades.