US: Possible nuclear subsidies
20 May 2021
The White House has indicated privately to lawmakers and stakeholders that it supports taxpayer subsidies to keep nuclear facilities from closing, Reuters reported, citing “three sources familiar with the discussions”. New subsidies, in the form of "production tax credits," could be included in President Joe Biden's multi-trillion-dollar legislative effort to invest in infrastructure and jobs, the sources said. Wind and solar power already benefit from tax rebates based on the levels of energy they generate.
President Biden has set targets for the US power industry to be emissions free by 2035 and is asking Congress to extend or create tax credits aimed at wind, solar and battery manufacturing as part of his $2,300 billion American Jobs Plan. Although the USA has more than 90 nuclear reactors, which are its main source of emissions-free power generation, a number of ageing plants have closed in face of increased safety costs and competition from natural gas, wind and solar.
Entergy’s Indian Point NPP New York state closed on 30 April, while Exelon has said it might have to close four reactors at two plants by November, unless subsidies are available.
"There's a deepening understanding within the administration that it needs nuclear to meet its zero-emission goals," said a source engaged in the talks and familiar with the White House thinking, Reuters reported adding that the White House had no comment. Two of the Reuters sources said credits also have the support of Democratic Senator Joe Manchin from West Virginia, who holds significant power in the evenly divided Senate. However, Manchin's office also failed to comment.
Preliminary plans for a federal nuclear power production tax credit in deregulated markets would prevent companies from applying in states already offering similar assistance, one of the sources said. Companies also would have to prove financial hardship.
“We’re racing to cut emissions, create jobs, and shore up local economies -
allowing nuclear plants to close sets us back on all three fronts," said Ryan Fitzpatrick, director of the climate and energy programme at Washington-based moderate think tank, Third Way.