US Considering Nuclear Reactor Tax Credit to Meet Climate Goals – Sources
The White House has privately signaled to lawmakers and stakeholders in recent weeks that it supports taxpayer subsidies to prevent shutdowns of nuclear facilities and make it harder to meet U.S. climate goals, three sources close to the U.S. told Reuters. discussions.
New subsidies, in the form of “production tax credits”, would likely be drawn into President Joe Biden’s multibillion-dollar legislative effort to invest in infrastructure and jobs, the sources said.
Wind and solar energy producers already benefit from these tax breaks based on the energy levels they produce.
Biden wants the US power industry to be emission-free by 2035. He calls on Congress to expand or create tax credits for manufacturing wind, solar and battery power as part of the scheme. its $ 2.3 trillion US jobs plan.
The United States leads the world with more than 90 nuclear reactors, the nation’s leading source of emission-free electricity generation. Yet aging factories have closed due to rising security costs and competition from abundant natural gas, wind and solar power, which are increasingly cheaper.
“There is a growing understanding within the administration that it needs nuclear power to meet its zero emission goals,” said a source engaged in the talks and familiar with White House thinking .
The White House made no comment.
The Indian Point nuclear power plant in New York State, owned by Entergy Corp (ETR.N), shut down its last reactor on April 30. In Illinois, Exelon Corp (EXC.O) said it could shut down four reactors at two power plants by November, if the state does not apply subsidies.
Nuclear power plants provide thousands of union jobs that pay some of the highest salaries in the energy industry. Biden’s allies in the construction unions lobbied for the production tax credits.
The credits also have the backing of Democratic Senator Joe Manchin of the high-energy state of West Virginia, said two sources, who wield inordinate power in an equally divided Senate because he can block his party’s platform.
Manchin’s office did not immediately respond to a request for comment.
THE FIGHT TO SAVE THE REACTORS
According to one of the sources, preliminary plans for a federal tax credit for nuclear power generation in deregulated markets prevent companies from enjoying double income in states that offer similar assistance. Businesses are also expected to prove financial hardship, the source said.
As Biden pledged to his campaign to increase spending on research on the next generation of advanced nuclear power plants, his White House, like previous Trump and Obama administrations, struggled to devise a plan to save existing reactors.
The Biden administration also backed a clean energy standard (CES) in the infrastructure plan, a mechanism that could support existing nuclear power plants.
Such a standard could coexist with production tax credits, which would gradually set more ambitious targets for the electricity industry to reduce emissions until they reach net zero.
The production tax credit could be implemented faster and could help save even factories in Illinois, some experts say. Exelon, however, thinks the only way to save them is to take action in Illinois.
“We are working to reduce emissions, create jobs and strengthen local economies – allowing nuclear power plants to shut down brings us back on all three fronts,” said Ryan Fitzpatrick, climate and energy program director at Third Way, a moderate think tank.
An activist group criticized tax credits for aging factories, saying it would slow the deployment of renewables like wind and solar power. “A nuclear bailout is bad for taxpayers, bad for taxpayers and bad for the climate,” said Lukas Ross, program director at Friends of the Earth.
Our standards: Thomson Reuters Trust Principles.