The Impacts of Nuclear Retirements Under the Clean Power Plan

Energy & Environmental Policy Analysis

Energy, Power & Products (EPP)

August 9, 2016

Nuclear Field

Nuclear energy is an important source of carbon-free electric power generation. Nuclear plants provide 20 percent of our nation’s electric power and 62 percent of all carbon-free electric power. The Environmental Protection Agency’s (EPA) Clean Power Plan (CPP) sets emission reduction targets of 30 percent below 2006 levels by 2030 from the electric power sector. Nuclear energy will need to play a critical role within the electricity generation portfolio if these EPA goals are to be met. However, the nuclear industry is facing economic challenges – low natural gas prices, renewable tax credits, and market design factors – in addition to several regulatory and political pressures that could lead to sizable reductions in the nuclear fleet over the next 10 to 20 years.

FTI applied the PLEXOS electricity model to assess the impact of accelerated nuclear plant closures on electricity prices through 2035 under the CPP. We modeled the Eastern Interconnect under the CPP as the baseline, using the existing fleet and planned nuclear capacity additions. We then modeled a case with the assumption that no additional nuclear permit extensions would be granted. We also included announced nuclear plant closures in this case, along with nine other nuclear reactors that are at risk of closing for economic, regulatory, and political reasons.

Our analysis found that COemission prices and wholesale electricity prices in the Eastern Interconnect would increase significantly under a case where nuclear plant closures are accelerated. This white paper shows the value of maintaining existing nuclear capacity under the goals set by the CPP.

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