Despite an unclear income picture, the US government is investing in nuclear energy. While many criticize Biden for subsidizing a business with such high expenses when the funds might be used to grow the renewable energy sector, the state insists that this is a vital step to fulfill net-zero ambitions and bridge the energy transition gap, oilprice.com comments.
The Department of Energy (DoE) has declared that it will invest billions of dollars in maintaining existing nuclear power plants operational over the next few years in order to assist the United States’ goal of developing its clean energy industry. Several nuclear power facilities are losing too much money to be operational without government assistance. However, the government sees this as a beneficial investment because nuclear power is critical to helping Biden reach his commitment to reducing greenhouse gas emissions by half by 2030.
The money comes from the Bipartisan Infrastructure Act, which went into effect in November 2021 and includes a $6 billion Civil Nuclear Credit Program.
Deregulation is partly to blame for nuclear power stations’ financial difficulties, as selling power on the open market forces purchasers to choose the cheapest alternative, often natural gas. There are now ten states with deregulated power facilities. And, given the current cheap price of natural gas, nuclear power may lose up to one-third of its market share because it just cannot compete.
This would imply a reduction from 96 gigawatts to 60 gigawatts by 2030.
While deregulation fueled competition in the past, new climate change objectives may need a shift in the government’s energy policy to encourage people to convert to greener energy sources. Nuclear energy will remain non-competitive under present market norms as new, lower-cost energy sources such as wind and solar power emerge. However, because neither of them is as trustworthy in terms of supplying stable electricity as nuclear, the United States cannot abandon its power facilities.