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| Fig. 1: Pilgrim Nuclear Power Station. (Source: Wikimedia Commons) |
The United States has 99 nuclear reactors with a mix of pressurized water and boiling water reactors respectively. The United States is the worlds largest supplier of Nuclear Energy and generates more than 30% of the worlds nuclear energy. For the last 30 years or so, there has been greater positive public response towards Nuclear Energy in the United States. Disposal and storage of high level nuclear waste is a constant unresolved issue that has lead to research of alternative resources. [1]
Fabien Roques describes investor choices based on very limited data and really have no way of knowing the prices of gas and carbon prices. Investors use dynamic optimization programs to try to estimate profitability based on historical electricity, fuel, and carbon price data. In 1999-2000 when gas prices where also very low, a rise in combined cycle gas turbine plants took place. The fact of the matter is that electricity, gas and carbon prices are very much correlated and have great effects on each other respectively, and these changes are hard to calculate due to discount rates and government interference. [2]
Nuclear energy is very cost competitive with other processes of electricity generation, unless direct access to cheap fossil fuels is an option. Since gas is so cheap right now, investors are shying away from Nuclear energy at the moment. Entergy, a large nuclear power company, has decided to close down their Pilgrim Nuclear power station in 2019, seen in Fig. 1, due to poor market conditions, reduced revenues and operational costs. Operation costs include capital, plant operating, and external costs. The capital costs needed to construct these incredibly massive requires a large amount of investor support. Plant operating costs creates complications with the decommissioning of plants and the disposal of nuclear waste. External costs for nuclear energy should amount to zero, however governments around the world have had to deal with malfunctions and reactor explosions. [2]
Gas prices are very volatile and have a large influence on the production of other electrical generation options. Recently, record low price on gas has squeezed the expansion of nuclear energy. However, nuclear energy is a great way to reach the environmental goals set out by many governments, and set prices on carbon and improvements to nuclear waste disposal will stabilize the nuclear energy market. [1]
© Greg Taboada. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
[1] C. D. Ferguson and F. A. Settle, Eds., "The Future of Nuclear Power in the United States," Federation of American Scientists, February 2012.
[2] F. A. Roques et al., "Nuclear Power: A Hedge Against Uncertain Gas and Carbon Prices?" Energy J. 27, 1 (2006).
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