VIDEO: Low natural gas prices dim prospects for nuclear power generation

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Low natural gas prices resulting from shale gas drilling are stalling the growth of nuclear power generation in the U.S., Moody’s Investors Service said in a new report. Nuclear power‘s 19 percent to 20 percent share of U.S. electric power generation will fall slightly over the next several years.

The share could decrease because of the potential retirement of several additional reactors after the retirement of four of the U.S.’s 104 nuclear reactors in 2013, says Moody’s in the U.S. section of the report.

Power plants may close in part because low natural gas prices are keeping a lid on the prices utilities can charge customers, making some nuclear plants uncompetitive. Other factors contributing to closures will be high fixed operating costs and large capital-spending requirements to repair and refurbish aging power plants.

Plants most likely to close include unregulated nuclear reactors operating in merchant power markets that have been hurt by low power prices, unless market conditions improve or federal and state government policies help them increase margins, says Moody’s.

“Another reason nuclear generation is likely to decline is the dearth of new nuclear build in the US,” says Moody’s Associate Managing Director Michael Haggarty. “Only two new plants are currently under construction, and construction of both plants has been delayed by up to three years, with the companies not expecting the units to come on line until at least 2018-20.”

The two plants are being built by regulated utilities Georgia Power Co. and South Carolina Electric & Gas Co. In addition, federally owned Tennessee Valley Authority is in the process of completing one nuclear reactor that it originally began building in the 1970s but later abandoned.

Moody’s considers the U.S. government to be supportive of nuclear power, as part of its long-term strategy to shift the nation’s energy mix away from coal and other fossil fuels. The Energy Policy Act of 2005 included several incentives to encourage nuclear power development, including production tax credits and federal loan guarantees.

The U.S. Environmental Protection Agency‘s June 2, 2014 proposed carbon rules could also help bolster the importance of nuclear power, as draft rules indicated that preserving existing nuclear capacity could be one option for states to help them meet proposed carbon rules.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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