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If Nuclear Could Get Subsidies Like Wind and Solar, It Would Keep Providing Clean Power, Say Supporters

When the Vermont Yankee Nuclear Station shut down at the end of 2014, opponents of nuclear power hailed it as a victory. But its proponents — including many corporate environmental and energy managers — said that it would lead to greater carbon emissions and to potentially higher energy prices.

Indeed, clean energy supplies as a total of the global electricity generation portfolio have been on the decline for two decades, according to Environmental Progress, which also says that a primary reason for this is because of the threats to nuclear generation: Germany has plans to nix its whole nuclear portfolio, as does Sweden, and in the United States, smaller nuclear units that compete on the open market can’t go head-to-head with cheap natural gas. True, wind and solar are growing, the think tank says, but not enough to make up for lost nuclear.

And that’s just the tip: In the United States, Environmental Progress says that 13 nuclear plants are at risk of closure over the next two years. Hang on: half of all such plants here could be shut down over the next 15 years. “If that happens, the resulting higher carbon emissions will wipe out 43 percent of the EPA’s planned Clean Power Plan reductions,” says Michael Shellenberger, president of the Berkeley, Calif.-based think tank.

All told, he says that nuclear generation worldwide has fallen by 7 percent since 1995 to where it now provides 11 percent of the globe’s electricity. Meanwhile, wind and solar global installations have grown by 3.7 percent during that same time — not enough to replace the carbon-free contributions.

As for Vermont Yankee, The 604-megawatt nuclear generation plant had been operating at more than 90 percent capacity, providing consumers with about 35 percent of the electricity that they had been using. But the plant succumbed to market forces, namely from low-cost natural gas as well as restructured markets that favor subsidized sustainable fuels — and which receive state sanctioned, long-term contracts. Existing merchant generators that sell their power at market prices are unable to compete with cheaper and subsidized fuels.

But is this not the free market at work? According to Shellenberger, the anti-nuclear forces have successfully targeted nuclear energy and given it a black eye, in the general public’s mind. But with a better understanding of it — and its role in providing cleaner, affordable and carbon-free electricity — it is not too late to change opinions back to where they were in the early 1970s.

Writing for Public Utilities Fortnightly, he says that in the United States, wind and solar get 17-times to 140-times, respectively, the subsidies as does nuclear. And at least half of the states have a renewable portfolio standard (RPS) that requires more wind and solar.

“Nuclear has also been hurt in the U.S. by low natural gas prices,” Shellenberg writes, in the Fortnightly. “But if nuclear were subsidized at the same levels as solar and wind, or allowed to contribute to state RPS, nuclear would continue to be highly economical.

“Proof is that wind and solar have boomed over the last five years when natural gas prices have been very low,” he continues. “Furthermore, when wind and solar subsidies are withdrawn, whether in the U.S. or Europe, installation of wind and solar declines dramatically.”

What about the argument that nuclear is not as cost effective as natural gas? Jim Conca, writing for Forbes, says that operating an existing nuclear plant is as good a deal as any type of generation:

The levelized cost of energy for nuclear — that include all-in calculations — is 3 cents a kilowatt/hour over 20-to-40 years, he says. That compares to 5 cents for an existing gas plant and 4 cents for an existing coal plant. If it is a new plant, Conca say that the levelized cost is 9 cents for nuclear and 7 cents for natural gas. It’s 10 cents for coal and and 11 cents for wind.

So, according to these nuclear advocates — Shellenberger and Conca — shutting down nuclear and building new natural gas-fired units is not only more costly to operate but it is also a dirtier option. And in an age when the community of nations is asking for limits on carbon emissions, policymakers need to look ever more closely at the role nuclear energy will play in electricity markets.

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13 thoughts on “If Nuclear Could Get Subsidies Like Wind and Solar, It Would Keep Providing Clean Power, Say Supporters

  1. Hold on! The nuclear industry’s risk from accidents is currently completely protected through the unprecedented federal subsidy of the Price Anderson Act. Let’s at least be honest in this conversation.

  2. The nuclear plants that are closing in competitive markets need to charge more than the market price, or they would not be closing, so they certainly aren’t producing power at 3 cents/kWh, and their continued operation will raise prices, not lower them. That’s why they need subsidies.
    As to subsidy equality, only nuclear has a government guarantee to take and dispose of its waste or else pay damages. Over $25 billion has been collected from customers for this and billions more from taxpayers. Never mind that it hasn’t been done. Without the commitment to do it, no nuclear plants would have been built. Same with the law limiting nuclear plant liability to $13+ billion. Fukushima damages now exceed $100 billion. Renewables have and need no such subsidy.
    In addition, Doug Koplow, who knows this subject far better than Shellenberger, calculates that when the historic nuclear subsidies are counted up, the nuclear subsidies have often exceeded the value of the power produced. See his study at http://www.ucsusa.org/sites/default/files/legacy/assets/documents/nuclear_power/nuclear_subsidies_report.pdf.

  3. Kate,

    The Price Anderson Act is not a federal subsidy: It requires reactor operators to take out the maximum insurance they can get on market, and make up the rest.

  4. Renewables have received a fraction of the government incentives that conventional fuels have. Conventional fuels have received over $500 billion and counting over the last 100 years. In many parts of the country, renewables are the cheapest source of new electric generating capacity, even when incentives are taken into account. That statement has been proven true by Politifact, FactCheck.org, Wall Street investment firm Lazard and others. DBL investors studied subsidies paid to various fuel sources over the lifetime of those incentives and found from 1947 to 1999, nuclear received over $185 billion, while from 1994 to 2009 renewables received $6 billion. -Greg Alvarez, Writer and Content Manager, American Wind Energy Association

  5. Greg Alvarez is citing data from 2009 — why? Because the large subsidies for renewables came after 2009. The most recent independent analysis — done by DOE’s Energy Information Administration — calculated subsidies for 2013 and found solar receives 140 times more in federal subsidies, and wind receives 17 times more, than nuclear receives.

    And 2013 subsidies for non-nuclear clean tech were lower than they were in 2009 – 2012, when clean tech were $44, $35, $30, $16 billion each year.

    And of course that doesn’t count that 30 states exclude nuclear from their Renewable Portfolio Standards — and from other subsidies including net metering.

    Nobody doubts nuclear plants would be fine if they received a fraction of wind or solar subsidies, or were part of state Renewable Portfolio Standards.

    More information can be found here:


  6. Greg, the DBL investors study was authored by a member of Sierra Club (a noted anti-nuclear group) and works with many solar energy companies. It’s a naturally bias piece of work. Moreover, the $185 billion in subsidies to nuclear can largely be accounted for by 1) the weapons sector, not electricity sector, 2) R&D, not commercial generation, 3) the period from 1946 – 1974, as noted in the DBL report. Nuclear used to be very heavily subsidized, very true. It is less so today.

    I believe Shellenberger’s point is that, for the amount of electricity generated TODAY, the subsidy/unit energy for nuclear is far less than it is for wind or solar. Moreover, wind and solar enjoy direct subsidies in the form of price guarantees that last many years, a subsidy that nuclear generation most certainly does not enjoy. This long-term price guarantee is the single biggest reason why wind and solar have experienced so much growth.

    Instead, nuclear generation must pay a tax in the form of the Nuclear Waste Fund fee and requirement for Price Anderson Act insurance premiums. These are very reasonable taxes that nuclear generation should pay for, in my opinion, due to their risks. Too bad the government collects the money and then fails to dispose of the waste as they promise.

  7. In 2013 alone, renewables received over $15B, nuclear just over $1.6B (most of that for research). For that, renewable generation increased from 0.1% to about 4.8%. Meanwhile without vast subsidies, nuclear maintained it’s near 20% generation share even with 5 plants shutting down.

  8. Electricity-related subsidies increased 38% between FY 2010 and FY 2013, from $11.7 billion to $16.1 billion (see Table ES1). This increase was largely the result of a $4.2 billion increase, from $1.1 billion in FY 2010 to $5.3 billion in FY 2013, in support of solar energy, reflecting a large increase in the installation rate of solar facilities utilizing the ARRA Section 1603 grant payments or the 30% Investment Tax Credit (see Table ES2 and Figure ES1). Total subsidies to wind energy also increased between FY 2010 and FY 2013, rising from $5.5 billion to $5.9 billion.

    Wind energy received the largest share of direct federal subsidies and support in FY 2013, accounting for 37% of total electricity-related subsidies (see Table ES4). Nearly three-fourths of FY 2013 wind energy subsidies were direct expenditures and largely resulted from the ARRA Section 1603 grant program.6,7

    Support for Smart Grid and electricity transmission represented the largest portion of electricity-related R&D subsidies. Nearly 39% of FY 2013 R&D expenditures were devoted to researching the electricity grid’s capability to accommodate larger shares of electricity from intermittent sources (e.g., solar, wind, and other renewable energy sources) and offer other potential benefits to producers and consumers of electricity. In FY 2013, electricity-related R&D support was $2.1 billion, or 13% of the electricity-related total value of direct federal financial interventions and subsidies.

    Electricity-related renewables received a large share of direct federal subsidies and support in FY 2013 compared with their share of total electricity generation. Renewables (excluding biofuels) received 72% of all electricity-related subsidies and support in FY 2013 (see Table ES3 and Table ES4 ), yet accounted for 13% of total generation in calendar year 2013.8 More than three-quarters of the subsidies going to renewables were direct expenditures or tax expenditures targeting upfront capital investments for projects expected to produce energy for at least 20 years.

    Interest rate support for federal electricity programs did not increase from FY 2010 to FY 2013. While these programs expanded long-term debt by financing more new generation and transmission projects, the increased debt was offset by lower effective interest rates and more favorable spreads between 30-year Treasury bonds and the cost of debt for IOUs in FY 2013 compared to FY 2010.

    Source – https://www.eia.gov/analysis/requests/subsidy/

  9. Estimates of the subsidy (if any) from Price Anderson liability limits, even those of nuclear critics, are on the order of 0.1 cents/kW-hr. That is, more than an order of magnitude lower than the direct subsidies all renewables receive, and almost 100 times lower than the effective subsidy that fossil generation enjoys, in that they get to continuously pollute the environment for free.

    External cost studies repeatedly show that nuclear’s external costs are much smaller than fossil sources (liability limitations being counted). BTW, liability limits are common for heavy industries, not just nuclear. In fact, most industries (e.g., offshore oil drilling) have much lower liability limits.

    As for waste, all the costs were covered by a 0.1 cent/kW-hr fee on nuclear-generated electricity, and that fee was sufficient to fund management and disposal of the waste, to the most impeccable standards every applied to any waste stream (i.e., full demonstration, by rigorous and conservative analysis) that the waste will remain contained for as long as it remains hazardous (i.e., demonstration that the waste stream will *never* have any impact). All other waste streams don’t come close to meeting that standard.

    Thus, the external costs associated with long-term hazards from waste streams are far larger for fossil energy (and most of industries in general) than they are for nuclear. The main point is that none of the issues Bradford raises are remotely significant, with respect to the “real cost” of nuclear.

    Bradford is right about one thing. The generation costs (not including capital) for the older, smaller nuclear plants that are struggling, are closer to 5 cents/kW-hr than 3 cents. That’s why they are closing (or threatening to).

    The question, however, is WHY are their costs so high. Nuclear operating costs in general have increased in recent years. The reason is obvious; excessive and relentlessly increasing regulations and requirements. One notable example is security (post-911), the question there being why nuclear has to meet such stringent security requirements, while chemical plants, dams, refineries, LNG terminals, tall buildings, schools and large gatherings/events do not, even though all of those other targets would actually result in a *greater* loss of life if attacked.

  10. Dr. Shellenberger,
    To suggest that nuclear power join renewables at the public trough misses the point. What is needed is reduced (and ultimately zero) carbon dioxide emissions. So penalize technologies that release CO2 (or CH4). A charge of $50/tonne of CO2 would be enough to allow non-carbon technologies – solar, wind, and nuclear – to compete in the marketplace. The Citizen Climate Lobby’s proposal to tax CO2 emissions and refund the money collected to all citizens is a proposal that should get serious study, and support.

  11. Schellenberger is not an environmental leader. First off, he is a climate denier, and is known for attacking the environmental movement.

    But his claims about subsidies is an example write out of the nuclear industry’s own PR textbook, where subsidies prior to the pre-Bush administration era magically don’t count, when the nuclear industry got the vast majority of energy subsidies for nearly 50 years, not to mention an entire multi-billion dollar uranium infrastructure. If you factor those monies in renewable subsidies should get decades of support.

    Mr. “levelized cost” man fails to recognize one rather major problem with his terminology and that is the price of new wind and solar are going down while the price of nuclear continues to go up. Thus in desperation we are seeing nuke 3.0 with small reactor designs being given a streamlined development and licensing process. Every long term follower of how large energy companies have acted long prior to Forbes’ magazine article that documented called nuclear development in this country the largest managerial disaster in US history back in 1986 should be reminded of the fact that their self interest protecting very large institutional investor’s bottom line will never square with the modern era where these companies should be put out of their misery rather than being allowed to dictate this country’s energy policy.

    Tell me a single IOU in this country that supports distributed energy like solar! We see pretty PG&E ads in California supporting solar on TV yet, the company has attacked every attempt at letting net metering continue at the CPUC.

  12. This article is factually flawed. Nuclear energy in the United States is the most subsidized energy source (see UCS report below). It has the most lethal wastes, the highest risk to terrorism, and the highest costs. In addition, as the grid becomes more resilient incorporating advanced software and controls, energy storage, high value energy efficiency and load reduction applications, and distributed renewable and other distributed generation — high-capital, larger-scale energy options make less and less sense.
    The Union of Concerned Scientists a released February 2011 report about the subsidies for nuclear power. The report, “Nuclear Power: Still Not Viable Without Subsidies,” found that more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage. Added together, these subsidies often have exceeded the average market price of the power produced. The report also examines the subsidies for new reactors.? http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_report.pdf – Scott Sklar, Adjunct Professor, GWU (Washington, DC)

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