Report: DOE bailout for coal, nuclear plants could cost $34B
Along with AEE, the report was funded by a wide range of energy groups and represents a general lack of support for the controversial subsidy proposal, not just among renewables-focused stakeholders, but those with carbon emissions as well.
The plan “could raise costs on American consumers and fundamentally hurt the administration’s goal of American energy dominance throughout the world,” Todd Snitchler, market development group at the American Petroleum Institute (API), said in a statement.
While renewables and storage are increasingly being looked at to replace natural gas, there is also widespread acceptance that gas turbines will have a role to play on the United States’ grid for some time. Coal and nuclear plants, facing more stringent environmental requirements and higher operating costs, respectively, have struggled to compete with plants fueled by cheap natural gas.
Keeping nuclear plants online has broader support because of their emissions-free generation. However, the deterioration of both industries, coupled with President Trump’s campaign promises to revive the nation’s ailing coal industry, in part, lead to the administration’s proposal.
The new Brattle analysis looks at multiple ways the administration might roll out its plan, in an attempt to figure out what the two-year subsidy program might cost, and reaches three broad tranches of estimates.
If uniform payments were given to all coal and nuclear plants reflecting their average financial shortfall, the cost would be $16.7 billion per year, or about $34 billion for the two year program. If payments are only given to plants facing financial shortfalls, the cost would run $9.7 billion to $17.2 billion annually, or $20 billion to $34 billion for the duration.