Economics of Nuclear Energy in the United States

With the ever increasing concern of the effect of carbon-based fuels on our climate, the need for green energy is more prevalent than ever. So what is the most used green energy source in the United States? Solar? Wind? Hydroelectric? Actually, it’s Nuclear. Nuclear power plants provided about 20% of the United States’ total electricity last year, compared with 6% from Hydroelectric, 1.6% from Biomass, 0.4% from Solar, 4.7% from Wind, and 7% from “Other Renewables.” Nuclear energy provides the same amount of electricity as all other forms of green energy combined, 20% compared to 19.7%. Many other countries get a larger portion of their energy from Nuclear power. For instance, Nuclear energy comprises 76.3% of France’s total energy consumption in 2015. For the amount of fuel, Nuclear is significantly more efficient than other fossil fuels per kilogram of fuel.

So why is the United States shying away from nuclear power rather than embracing it? A big reason is public opinion over the risk of an accident. While nuclear accidents are extremely rare, the potential downside is horrendous. Just look up Fukushima or Chernobyl; both accidents have displaced thousands of people, and the World Health Organization attributes the Chernobyl accident to more than 5000 cases of Thyroid cancer in Russia, Ukraine, and Belarus. But for the United States, the main issue may not be public opinion, but rather the economics. Nuclear power plants have relatively low operating costs, but the upfront capital costs are extremely high. This, coupled with the low cost of coal and the emergence of natural gas, makes Nuclear energy a somewhat risky investment. One has to determine the future value of electricity several years (even decades) into the future, operating costs and the lifetime of the plant to determine whether the investment is worth while. Maybe this is why a nuclear power plant hasn’t been built since 1973 (completed in 1996). However, in the face of climate change, Nuclear energy maybe the best option we have for producing large quantities of energy without also producing large quantities of carbon.