MIT electricity expert Jesse Jenkins is out with a new paper that looks to quantify the different forces that are jointly pushing down electricity prices enough to make nuclear power increasingly uneconomic.
- The paper looks at the trajectory of wholesale power prices in the PJM Interconnection from 2008–2016. The region covers all or part of 13 states — including Ohio, Pennsylvania and Virginia — that are together home to about a third of the U.S. nuclear fleet.
The big takeaway: The 72% decline in market prices for natural gas is by far the biggest culprit, with flat power consumption and the growth of wind power playing lesser roles (with wind only a factor in the western parts of PJM).
- "In short, cheap natural gas may be killing the profitability of nuclear power producers in the PJM Interconnection, but stagnant electricity demand and expectations of future growth in wind generation going forward may be accomplices," Jenkins writes.
- Why it matters: Nuclear is the largest source of carbon-free power. The research comes as a number of plants are facing retirement in coming years; several states are looking at how to keep them afloat; and, as noted above, the DOE is pushing for controversial new wholesale power market rules that would aid nukes in some markets.
- More: A detailed summary of the research is available here.