Nuclear energy to receive tax credit if bill passes in Congress

nuclear energy

Nuclear energy, specifically, phasing out nuclear plants, may receive a tax credit equivalent to the one already given to renewables, if a launched bill passes in Congress; Reuters reported this Thursday.

Firstly, Senator Ben Cardin launched the bill, which provides a production tax credit (PTC) of $15 per megawatt hour; for existing nuclear plant owners or operators in states such as New York, Illinois; and also, Pennsylvania which have deregulated power markets.

Secondly, according to Reuters, Maryland, has two reactors of nuclear energy run by Exelon Corporation; Maryland is also the home state of Senator Cardin.

Thirdly, if the bill passes in the Senate and in the House, it could help president Joe Biden’s attempt to decarbonize the U.S. energy sector by 2035; as nuclear reactors are virtually emissions-free.

However, due to other risks, such as waste-associated nuclear energy has been struggling in front of other sources like natural gas, wind and solar power. In fact, the U.S. has 93 reactors, down from 104 in 2012; as rising security and safety costs put additional pressures on the business.

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Incentive to nuclear energy may prevent plant’s closure

In contrast, the U.S. government provided a PTC on renewables since 1992 and has been extended and modified in the years since. In fact, at the end of December 2020, Congress extended the PTC at 60% of the full credit amount; or $0.018 per kWh ($18 per MW), for another year through December 31, 2021.

On the other hand, the PTC for phasing out nuclear plants would be phased out for any market revenues above $25 per megawatt hour or after 10 years.

In addition, about the PTC, Senator Cardin said. “America needs to reduce its reliance of fossil fuels, so it is imperative that we keep these reactors operating safely; while we continue to work on demand reduction, renewables, energy storage, and transmission grid resiliency.”

Finally, according to Reuters, Exelon has said it will close two nuclear power plants in Illinois in coming months if the state does not come through with subsidies. It was not certain whether the U.S. bill could help prevent the closures.

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