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The Risk of Early Retirement of U.S. Nuclear Power Plants under Electricity Deregulation and CO2 Emission Reductions

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  • Geoffrey S. Rothwell

Abstract

During the next decade, most states in the USA will deregulate electricity generation. Nuclear power plants that were ordered and built in a regulated environment will continue to be regulated as nuclear facilities. However, under state deregulation the price they receive for their electricity will be set largely in non-regulated markets. This paper examines the competitiveness of the nuclear power industry with a probabilistic model to identify which nuclear power units face the highest risk of early retirement under deregulation. Projected outputs under both average-cost and marginal-cost pricing are compared with expected generation under continued rate-of-return regulation. Nuclear units at risk of early retirement are in regions with the lowest forecast prices or are old plants. But, if CO2 regulation targets an emission reduction to 9 % below projected 2010 levels (projected to be 24% above 1990 levels), there are only a few units at risk of early retirement after 2015.

Suggested Citation

  • Geoffrey S. Rothwell, 2000. "The Risk of Early Retirement of U.S. Nuclear Power Plants under Electricity Deregulation and CO2 Emission Reductions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 61-87.
    • Handle: RePEc:aen:journl:2000v21-03-a03
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    Cited by:

    1. Savitski, David W. & Nuryyev, Guych, 2018. "Enhancing electric reliability with storage-field generators," Energy Policy, Elsevier, vol. 121(C), pages 611-620.
    2. Koomey, Jonathan & Hultman, Nathan E., 2007. "A reactor-level analysis of busbar costs for US nuclear plants, 1970-2005," Energy Policy, Elsevier, vol. 35(11), pages 5630-5642, November.
    3. Burtraw, Dallas & Palmer, Karen, 2005. "The Environmental Impacts of Electricity Restructuring: Looking Back and Looking Forward," RFF Working Paper Series dp-05-07, Resources for the Future.
    4. Geoffrey Rothwell, 2006. "A Real Options Approach to Evaluating New Nuclear Power Plants," The Energy Journal, , vol. 27(1), pages 37-54, January.
    5. Olukunle O. Owolabi & Toryn L. J. Schafer & Georgia E. Smits & Sanhita Sengupta & Sean E. Ryan & Lan Wang & David S. Matteson & Mila Getmansky Sherman & Deborah A. Sunter, 2021. "Role of Variable Renewable Energy Penetration on Electricity Price and its Volatility Across Independent System Operators in the United States," Papers 2112.11338, arXiv.org, revised Nov 2022.
    6. Toth, Ferenc L. & Rogner, Hans-Holger, 2006. "Oil and nuclear power: Past, present, and future," Energy Economics, Elsevier, vol. 28(1), pages 1-25, January.
    7. Haratyk, Geoffrey, 2017. "Early nuclear retirements in deregulated U.S. markets: Causes, implications and policy options," Energy Policy, Elsevier, vol. 110(C), pages 150-166.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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