What’s the future for US coal and nuclear as the energy transition takes hold?

It’s a tough time for legacy generation industries in the United States right now. Coal’s days seem to be numbered as the Biden administration steps up its efforts to tackle climate change. And nuclear power, despite being a low-carbon energy source, is increasingly uneconomical.

Coal and nuclear power each account for roughly the same amount of annual generation as all of the country’s renewables put together, according to data from the Energy Information Administration. That means replacing either one with alternatives will be a significant lift for U.S. utilities, even if both are no longer economically viable against new wind and solar power.

But in terms of the impact on U.S. decarbonization efforts, losing coal is a win-win, while losing nuclear’s carbon-free baseload power could, by some estimates, make the Biden administration’s goal of a zero-carbon grid by 2035 impossible to reach. This makes the economics of nuclear — both the plants that exist today and proposed next-generation designs — of great import to the fight against climate change.

Coal burning and mining continue to decline

The good news, from a climate change mitigation point of view, is that coal will almost certainly fade first. The fuel generates 24 percent of the electricity used in the U.S. but accounted for 61 percent of electricity sector carbon emissions in 2019, according to Environmental Protection Agency figures.

Moves to rehabilitate the technology through so-called ​“clean coal” plants appear to have foundered, with a Reuters investigation concluding in 2018 that the billions spent on refining the fuel had actually only served to make it dirtier.

And a study by nonprofit research body RMI in March this year revealed that there are at least five factors that could contribute to a faster, rather than slower, decline for coal, including rampant deployment of renewables and plant economics that are ​“grim at best.”

Further evidence for coal’s decay in the U.S. comes from data on mine closures. According to the U.S. Department of Labor, the number of mines reporting employment dropped from 1,970 in 2011 to 1,077 in 2020, a 45 percent fall over 10 years.

Assuming no new mines open — which seems reasonable in the current climate — and the current rate of closures remains constant, by 2029 there will be no U.S.-based mining operations left to fuel the nation’s coal plants.

The 2029 cutoff point aligns well with other targets, given recent RMI research showing that the U.S. would have to close all coal-fired plants by 2030 if the country is to meet the goal of reducing emissions in line with a maximum 1.5 degrees Celsius warming target.

Nuclear still has new projects lined up

The outlook for U.S. nuclear seems positively rosy in comparison.

Although New York’s Indian Point Nuclear Generating Unit 3 was scheduled to close permanently at the end of April 2021, another 93 U.S. reactors remain active and most have operating licenses extending well into the future.

The last slated expiry date contained in the U.S. Nuclear Regulatory Commission’s latest information digest is for Unit 2 of Tennessee Valley Authority’s Watts Bar Nuclear Plant, which started operating in 2016 and has an operating license through 2055.

That closure timeline could be extended further after two new units at Georgia Power’s Vogtle plant finally limp online in the coming months.

That plant’s third reactor is due to enter service this November, followed by a fourth a year later, although repeated delays and cost overruns with the project mean that planned commissioning dates should be viewed with a grain of salt.

Beyond the new Vogtle units, NuScale Power is hoping to bring a first-of-a-kind small modular reactor online by around 2030, but here the level of uncertainty over commissioning is even higher given the untried nature of the technology.

Nuclear’s environmental and economic woes

The extended time horizon for nuclear in the U.S. could help climate change mitigation. Last year, nuclear power plants delivered as much clean energy to the electricity system as all U.S. renewables combined.

But that does not mean the technology is free from problems. After almost 70 years of operating experience, the U.S. nuclear industry still does not have a final repository in which to bury spent fuel and high-level radioactive waste.

And there are concerns that support for expensive new nuclear plants could direct money and attention away from the development of more proven low-carbon generation technologies.

But the main problem for U.S. nuclear at the moment is simply that many plants cannot make money.

Nuclear can survive as long as plants are owned by government entities or by regulated electric utilities that can recover their costs in end-use customer rates, Nuclear Economics Consulting Group CEO Edward Kee said in an email.

But merchant plants that depend on selling electricity or power capacity on a wholesale market, as is the case in some parts of the U.S., ​“face pressure from the inherent design of electricity markets,” he said.

Carbon taxes are the wild card that could save nuclear

“This is exacerbated by low natural-gas prices and increased penetration of renewable generation,” he said. ​“Absent any action by the government, merchant nuclear power plants are closing in the U.S.,” and few new units are being built.

A market-led approach would compel the decline of nuclear power generation in the U.S., he said, even as the industry continues to thrive in markets such as China and Russia.

“The U.S. is likely to lose a lot of existing nuclear power plants in the next decades, and only a few new plants are under development,” Kee commented.

One factor that could halt nuclear’s slide is the imposition of a ​“meaningful” carbon tax, according to Kee. ​“State efforts to establish zero-emissions credits have stopped some merchant nuclear power early closures in the U.S.”

Based on today’s market conditions, ​“My strong bet is that coal falls to zero well before nuclear,” said RMI principal Mark Dyson, in an email. ​“They share similar market-driven threats to profitability, but one emits carbon and the other doesn’t.”

He continued: ​“Given policy priorities at the state and federal levels, it’s fair to say that the balance of coal [plants] will expire due to a combination of profitability [challenges] and carbon legislation long before the last nuclear license runs out.”

(Lead photo: Nicholas Hippert)