Under pressure from low natural gas prices, the commercial viability of America’s unregulated nuclear power industry has weakened in recent years. In turn, discussions regarding the revival of ailing plants have turned to state subsidies. But can state assistance prevent the nuclear industry’s collapse?
In an article for FTSE Global Markets, S&P Global Ratings’ Michael Ferguson, Director, U.S. Energy Infrastructure, offers his view that subsidies cannot shelter the nuclear industry from either the market or any political pressure.
Following the scrapping of the Obama Administration’s Clean Power Plan (CPP), Ferguson believes nuclear-reliant states are now faced with a Catch 22. This is a choice between either subsiding nuclear assets indefinitely (despite the diminishing chances that nuclear will return to profit), or allowing them to fall off the grid – leaving thousands unemployed.
Ferguson writes: “Although we expect some policy developments that attempt to allay the industry’s demise, these may not be able to prevent further plant retirements. As such, preparing for unrelenting difficulties during 2017 and 2018 is the nuclear industry’s harsh reality as it edges closer to meltdown.
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