An abundance of inexpensive natural gas has ratcheted up the pressure on nuclear power plants in unregulated markets by driving down wholesale-electricity prices. For example, average electricity prices in the PJM power market have plummeted by almost 50 percent over the past decade.
This headwind has emerged at a time when major operators have leveraged their scale to boost utilization rates to record levels. Exelon, for example, has run its fleet at 90 percent of its nameplate capacity over the past decade while reducing average outage times for refueling and repairs to 23 days. The company has also extended the operating life of its reactors to 80 years—twice the expectation when many of these plants were built.
Challenging economics have prompted operators to shut down a number of nuclear power plants. Dozens of closures will follow in coming years, unless lobbying efforts convince states to subsidize these facilities with zero-emission credits.