Industry Trend Analysis - Nuclear Power To Be Increasingly Reliant On Public Support - MAR 2018
BMI View: Nuclear power operating capacity in the US will shrink by more than 3.5GW over the next 10 years, with plant retirements largely outweighing the completion of two new reactors. Aging nuclear plants will struggle to be profitable amid continued growth in cheaper natural gas-fired power supply, meaning that subsidies from state-level policymakers will be crucial to maintain struggling plants into operation.
The US' nuclear power industry will face significant headwinds over the coming years and will continue to shrink in size. This will be the result of the combined impact of nuclear's high fixed costs and the low revenues for generators selling power in the spot market, where prices have been pushed down by the low cost of natural gas and a growing supply of wind and solar power.
We expect operating nuclear power capacity and generation in the US to fall by 3.6% and 3.3%, respectively, between 2018 and 2027. As the chart below illustrates, nuclear power capacity in operation (without accounting for potential plants' uprates) will decrease from 99,564 megawatts (MW) in 2016 to 95,330MW in 2027, according to our forecast.
|Nuclear Industry Will Continue To Shrink|
|US - Nuclear Power Operating Capacity And Generation|
|e/f = BMI estimate/forecast. Source: EIA, BMI|