For many nuclear plants in the U.S., struggling to stay competitive amid bottomed-out energy prices and rising operational costs, President Obamaâs plan to reduce carbon emissions at existing power plants was a godsend, but it may be too little too late, Bloomberg reports.
The administrationâs intention to curb U.S. carbon emissions by, among other things, cutting emissions from existing power plants is not expected to come into full effect until 2020. In the meantime, nuclear plants face stiff competition from natural gas plants burning cheap shale gas, all while operation costs for reactors are projected to climb five percent a year through 2015, according to a report from Credit Suisse Group AG. For some plants, like Entergy (NYSE: ETR)âs Indian Point facility, which New York Governor Andrew Cuomo has called for shuttering when its license expired in 2015, the pressure could be enough to lead to the plantâs closure. In cases where a nuclear plant is forced to close, natural gas-burning facilities are likely to pick up the slack, which would lead to an overall increase in carbon emissions despite the presidentâs stated goal of cutting carbon emissions 17 percent form 2005 levels by 2020.
A vision of that future is already visible in Japan, which has had to make up for post-Fukushima plant closures by burning fossil fuels, and Germany, which has committed to phasing out nuclear power and is burning fossil fuels to make up the lost power production.
âBoth countries have rising greenhouse gas emissions as a result of shuttering nuclear plants,â said an analyst for Bloomberg New Energy Finance.
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