Today’s energy markets are designed to deliver power at the lowest cost, but widely acknowledged flaws in how prices are set are having unintended consequences that will hurt consumers and the environment in the long run. The problem is that existing market rules often allow the price of energy to be set lower than the cost to produce it. And while state and federal policies place a value on the environmental benefits of wind, solar and more than a dozen other clean energy sources, they exclude nuclear even though it accounts for 60 percent of the nation’s carbon-free power.
This week’s news that more nuclear plants will be closing prematurely offers further proof that we have reached an inflection point in the debate over market reforms needed to recognize the value of our nation’s largest and most resilient source of clean energy.
The announced closure of FirstEnergy’s three emissions-free nuclear plants will immediately erase the environmental benefits of more than 25 years of wind and solar development in the markets they serve.
As the nation’s largest producer of emissions-free energy, Exelon urges policymakers to prioritize reforms that fix market rule flaws that unfairly disadvantage nuclear plants, which are an indispensable component of a resilient and secure electric grid, and are economic engines for the communities they serve.
Without urgent action, more plants will close, setting us back even further in the pursuit of a globally competitive, low-carbon economy. And it will cost us more than just clean air. Studies in several states have found that taking action to prevent nuclear retirements actually saves more than it costs. That’s because when nuclear plants close, both carbon emissions and energy prices go up. The result means higher costs for consumers. That was the conclusion of policymakers in Illinois and New York, which adopted zero emissions credit (ZEC) programs that place a value on the environmental and economic benefits that nuclear plants provide, while protecting customers from higher energy costs.
Studies of a similar proposal under consideration in New Jersey echo those findings, concluding that the benefits of a proposed zero emissions certificate program would exceed costs by a factor of six to one. In addition, Environmental Protection Agency data shows that if transitioning to zero-carbon energy is the goal, preventing the early retirement of nuclear plants is among the least expensive options for getting there.
Resilient, reliable power is critical to securing our nation’s energy needs. During the 2014 Polar Vortex and the more recent bomb cyclone in the Northeast, nuclear plants provided dependable power, while many gas and other sources were unable to perform when they were needed most.
Nuclear plants also are economic engines for the communities they serve. They support thousands of jobs and generate income that provides funding for police, schools, fire and other essential services. The average plant employs between 400 and 700 workers and annually generates $470 million in sales of goods and services in the local community and nearly $40 million in total labor income.
It's not often that taking action to protect the environment and secure high-paying jobs saves money. With the right solutions, we could do just that.