The Economics of a U.S. Civilian Nuclear Phase-out

In the United States, which trades three-fifths of its electricity in competitive markets, the prohibitive capital cost of new nuclear power plants ensures that only a handful will be built. Nonetheless, with 40-year licenses being extended to 60 years, the 104 existing reactors’ relatively low generating costs are widely expected to justify decades of continued operation. But the generating costs of aging reactors have been rising, while competitors, including modern renewables, show rapidly falling total costs—and those opposed cost curves have begun to intersect. An expanding fraction of well-running nuclear plants is now challenged to compete with moderating wholesale power prices, while plants needing major repairs or located in regions rich in wind power increasingly face difficult choices of whether to run or close. Thus, even without events that might accelerate nuclear phase-out, as the Fukushima disaster did in Germany, shifting competitive conditions have begun to drive a gradual U.S. nuclear phase-out. Its economics are illuminated by a detailed energy scenario that needs no nuclear energy, coal, or oil and one-third less natural gas to run a 158 percent bigger U.S. economy in 2050—but cuts carbon emissions by 82 to 86 percent and costs $5 trillion less. That scenario’s 80-percent-renewable, 50-percent-distributed, equally reliable, and more resilient electricity system would cost essentially the same as a business-as-usual version that sustains nuclear and coal power, but would better manage all the system’s risks. Similarly comprehensive modeling could also analyze faster nuclear phase-out if desired.