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Early nuclear power plant retirement and policy choices in the New York electricity market

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  • Bah, Muhammad Maladoh
  • Weigt, Hannes

Abstract

The U.S. nuclear industry has overcome a challenging period during which low wholesale market prices threatened the survival of nuclear power plants (NPPs). From 2017 to 2019, several U.S. states initiated out-of-market support schemes to bolster the financial conditions of NPPs. This paper provides a comparative cost assessment between the preservation of three upstate New York NPPs under the zero-emission credit (ZEC) support scheme or an early retirement. In addition, the paper explores future market development scenarios with a carbon price mechanism. A bespoke cost-minimization dispatch model is developed for the New York electricity market along with four neighboring electricity markets. The comparative cost assessment of a nuclear phaseout and ZEC expenditures is not definitive. Results indicate that phasing out upstate NPPs in 2018 and 2021 incurred a slightly higher cost burden for New York consumers compared to the total ZEC expenditures. In contrast, phasing out upstate NPPs in 2030 incurs a lower cost burden compared to the total ZEC expenditure, mainly due to a high credit price. Furthermore, results show that a low carbon price of USD 51/ton would raise average NYISO prices by USD 24.1/MWh, thereby improving the long-term income conditions of NPPs, and ensuring sufficient accumulation of nuclear decommissioning funds. The study provides policymakers with a sequence of optimal policy options taking into account the pace of renewable development.

Suggested Citation

  • Bah, Muhammad Maladoh & Weigt, Hannes, 2025. "Early nuclear power plant retirement and policy choices in the New York electricity market," Working papers 2025/01, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2025/01
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    nuclear power plant; ZEC; New York; electricity market; carbon price;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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