A report on the nuclear power industry by Bloomberg New Energy Finance analyst Nicholas Steckler says what industry observers have been seeing develop with the advent of natural gas hydrofracking: Nuclear power plants around the country are losing money with the erosion of electricity prices.
The same dynamic that is driving down the price of a barrel of oil – expected to stay below $50 per barrel for much of this year – is also hurting the nuclear power industry. The study estimates that nuclear power operators will lose $2.9 billion this year.
Several other market headwinds are hurting nuclear power. Government subsidies for solar and wind power, politically popular with the threat of global warming hanging, literally, in the air, maybe the least of the nuclear industry's worries, but coupled with the 2011 accident at the Fukushima Daiichi Nuclear Generating Station in Japan, the political will for supporting this stable, pollution free power source is draining. The new president of South Korea is a prime example. Moon Jae-in announced on Monday this week that his country would phase out nuclear power over time and cut back on oil as generation source. From an industry standpoint, South Korea is the equivalent of a prized student, developing its own technology to the point that it now operates 25 reactors and exports design and construction of power plants.
The Bloomberg report, released June 14, said nuclear power plants are earning between $20/MWh and $30/MWh, but it costs on average $35/MWh for the plants to produce electricity.
Steckler said more than half of the country's 61 nuclear power plants are losing money – 34 of them, according to a Power magazine report.
Entergy and FirstEnergy acknowledged the report. Manager of eight nuclear power plants, Entergy in a statement, noted “financial challenges due to sustained wholesale power price declines and unfavorable market conditions.” FirstEnergy, which has said it would back out of the competitive power business, noted that none of its competitive generating plants are currently making money.