WORLD-GENERATION MAY/JUNE 2016
19
Nuclear power currently accounts for
19% of U.S. power production, but several
factors are at play that may threaten some
nuclear generators and could diminish the
nuclear industry’s contribution to our elec-
tricity supply and the U.S. economy. These
factors include limited recognition of car-
bon as a social cost, as well as market fac-
tors such as low natural gas prices, flat elec-
tricity demand growth, and transmission
constraints.
Our analysis of the incremental effect
of the U.S. nuclear industry has determined
that it contributes approximately $60 billion
annually to gross domestic product (GDP)
($103 billion annually in gross output). The
industry also accounts for about 475,000
direct and secondary full time jobs. Nuclear
energy helps keep electricity prices low.
Without nuclear generation, retail rates
would be about 6% higher on average.
The industry is responsible for nearly
$10 billion annually in additional federal tax
revenues and $2.2 billion in additional state
tax revenues, because of the boost it gives
to the economy. It prevents 573 million
tons of carbon dioxide emissions, worth
another $25 billion annually if valued at the
federal government’s social cost of carbon
estimate and prevents over 650,000 tons of
nitrogen oxides (NOX) and over one mil-
lion tons of sulfur dioxide (SO2) emissions
annually, together valued at $8.4 billion
based on the National Academy of
Science’s externality cost estimates.
These values reflect the incremental
contribution of the nuclear industry to the
economy, measured by comparing the per-
formance of the U.S. economy with and
without the nuclear fleet. This approach
nets off the contribution of the alternative
generation that would be necessary if the
nuclear industry did not exist, to determine
its incremental contribution. Without nucle-
ar plants, the economy would rely more
heavily on existing and new natural gas-
fired generating plants, and to a lesser
extent, additional generation from existing
coal-fired plants. This greater use of fossil
generation would mean higher electricity
prices. Wholesale prices would be 10%
higher on average. Retail prices would rise
about 6%. It is this effect on electricity pric-
es that accounts for the majority of nucle-
ar’s overall incremental economic impact.
Increased fossil use would also result
in much higher carbon dioxide emissions
and greater emissions of criteria pollutants
such as NOX and SO2. Large-scale renew-
able energy would probably not substitute
significantly for nuclear; intermittent
renewable generation is not a direct substi-
tute for the baseload profile of nuclear.
The magnitude of the power price
effects, and ultimately the economic and
jobs effects, could depend on movements in
the price of natural gas, since it plays a pri-
mary role in setting power prices in most
U.S. regions. Lower natural gas prices are
a primary reason for the current threat to
some nuclear plants, of course, but the sen-
sitivity of this analysis to gas prices also
points out that nuclear plants help to pro-
tect consumers and the economy from the
volatility of gas prices. These effects go
well beyond what consumers pay for natu-
ral gas directly, and even beyond what they
pay for electricity, since power prices have
a significant effect on the larger economy,
as is demonstrated by this study. Absent
nuclear, consumers would pay more for
electricity, the economy would suffer both
in terms of GDP and jobs, and we would
face substantially higher emissions of CO2
and other pollutants.
BACKGROUND
Sixty two nuclear plants comprising 99
reactors operate in the United States, repre-
senting over 100,000 megawatts (MW) of
capacity and almost 800 million megawatt
hours (MWh) of annual generation. These
plants operate in 30 states, with many
plants clustered in the Northeast, Midwest,
and Southeast. The nuclear industry is an
important economic engine both nationally
and locally. Nuclear plants typically directly
employ 400 to 900 workers, often making
them major employers in their local com-
munities.
According to the U.S. Bureau of Labor
Statistics and the Nuclear Energy Institute,
the nuclear electric power generation sec-
tor employs directly between 50,000 and
60,000 workers. Nuclear vendors and manu-
facturers add another 60,000 positions.
The nuclear industry, in addition to its
contribution to economic activity, has also
been recognized for providing reliable sup-
ply and for its carbon-free emissions profile.
However, some plants are struggling finan-
cially at present, for reasons that include
limited recognition of carbon emissions as
a social cost, low natural gas prices, lack of
electricity demand growth, and transmis-
sion constraints.
PERSPECTIVE
NUCLEAR’S US CONTRIBUTIONS
BY MARK BERKMAN,PH.D & DEAN MURPHY,PH.D
US Nuclear Plants
