Nuclear power usage in the U.S. will cease if the nuclear industry doesn’t get more government support, investment giant Carlyle Group believes.
The nation’s roughly 99 nuclear reactors need additional subsidies to keep running, such as a federal carbon tax that’ll reward them for their zero-emissions power, Bob Mancini, co-head of Carlyle’s power unit, said at a conference in New York, Bloomberg reported.
A portion of Carlyle’s $176 billion in AUM (assets under management) includes investments in natural gas- and coal-fired power plants and renewable energy projects, Kallanish Energy understands.
Mancini’s statements come as nuclear power generators including Exelon and Entergy, are planning to shutter long-running reactors nationwide, as low power prices, due to a natural gas glut from shale drilling along with weakening demand, have squeezed their profits just as their operating costs rise due to additional regulations.
“We will see the end of the nuclear industry in coming decades” without legislation, incentives or other support to keep reactors open or encourage new builds, Mancini said at S&P Global Platts’s Financing U.S. Power Conference earlier this week.
The cost of building a nuclear plant may be more than five times that of a gas-fired one based on U.S. government data. China, India and Russia are among the few places where new nuclear plants are being built, Mancini said. The U.S. is building four new nuclear units in Georgia and South Carolina.
Mancini pointed to measures approved by New York as an example of the kind of help nuclear power plant owners are going to need to survive. In August, New York State regulators agreed to subsidies worth roughly $500 million annually as part of a clean energy plan to reduce greenhouse gas emissions. They’re being fought by competing power producers who say the measures are unlawful.
If the upstate reactors shut down, “emissions reductions will be eviscerated and volatility of prices will increase,” Mancini said, Bloomberg reported. “More importantly, from a political perspective, hundreds of millions of dollars of tax revenue will be affected and thousands of jobs lost in parts of the state that are already economically depressed.”