Given its high operating costs and diminishing competitiveness, America’s nuclear sector is suffering from economic strain. With their long-term profitability at risk, some nuclear assets have been decommissioned ahead of schedule, while others are on the verge of closure.
In a feature for Downstream Today, S&P Global Ratings’ Michael Ferguson offers his verdict on the nuclear industry’s long-term future, and stresses that more closures are likely. Ferguson writes: “Although nuclear power will continue to play a crucial role in America’s generating grid, the industry’s outlook could deteriorate further – with diminished margins likely to continue during 2017 and 2018 amid weaker power demand growth.”
Furthermore, amid speculation of whether or not President Trump could spur nuclear’s revival, Ferguson believes that – regardless of who resides in the White House – the negative outlook is unlikely to reverse in the mid-term. He concludes: “Given that the low natural gas price has played a significant part in nuclear’s decline, President Trump’s administration may offer only partial relief. With this in mind, we await policy developments aimed at improving nuclear’s performance, although their efficacy remains to be seen.”
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