Some American nuclear energy plants are at risk of closure as a consequence of inexpensive natural gas driving down power prices. But could the outlook for U.S. nuclear assets improve in the future? Michael Ferguson, Director, U.S. Energy Infrastructure, S&P Global Ratings, believes the outlook will likely remain shrouded by uncertainty.
Writing for Rigzone, Ferguson states that the industry could deteriorate further and that more closures may occur in the mid-term – with assets in the states of Ohio and Pennsylvania most at risk. Ferguson writes: “Caused by both gains in energy efficiency and renewables’ increased penetration throughout the United States, the continued fall in demand growth has been a crippling factor for nuclear generators that rely heavily – indeed, almost wholly – on high energy margins to operate efficiently.”
In light of nuclear’s apparent demise, one question garnering speculation is whether or not President Trump will come to the industry’s rescue. In Ferguson’s view, however, nuclear’s help may be overshadowed by a commitment to reviving the waning coal industry – leaving nuclear with only partial relief from the market. With subsidies for fledging nuclear units absent, “the outlook for nuclear is not likely to reverse in the mid-term”, Ferguson writes.
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