Battle lines drawn as Obama moves to cut greenhouse gas emissions

Five years ago, the talk was of a renaissance in US nuclear power. Today, the sector is battling to avoid a slide back into the dark ages. Threatened by competition from plants fuelled by cheap natural gas, the nuclear industry is at risk of being forced into further retreat.

Over the past year, the threat to nuclear generation has risen up the agenda for utilities and regulators.

As President Barack Obama's administration moves to cut US greenhouse gas emissions, with detailed regulations of its plan for power generation due in the summer, supporters of nuclear power have become increasingly vocal in urging policy to support the country's largest source of low-carbon generation.

The argument is far from over, however. Proposals for regulatory changes that would help nuclear generators have been attacked as a "bailout" for the industry at the expense of consumers.

The industry argues that nuclear power is an essential part of the energy mix that will fade away without greater financial support, but regulators and politicians are yet to be convinced.

For now, the decline of nuclear in US electricity supply is moving slowly. It accounted for 20 per cent of the country's power generation in 2009, and will be about 19 per cent this year, according to the government's Energy Information Administration.

This year is even expected to bring some positive news for the industry with the start-up of Watts Bar 2, scheduled to be the first nuclear plant to come on line in the US since 1996. The project was launched by the Tennessee Valley Authority in the 1970s, and construction was stopped in 1985 but restarted in 2007. Its completion will add about 1.1 gigawatts to US nuclear capacity of about 104GW.

However, the long-delayed arrival of Watts Bar 2 is being offset by shutdowns of other US reactors. Duke Energy's Crystal River plant in Florida and Edison International's two reactors at San Onofre in California were shut down after they were hit by technical problems that would have required heavy expenditure to put right.

There have also been a couple of plants closed as a result not of technical problems, but of the economics of their local markets. Dominion's Kewaunee plant in Wisconsin was shut down in May 2013, and Entergy's Vermont Yankee ceased operating at the end of last year.

Exelon, the Chicago-based electricity group that has the largest number of nuclear plants in the US, has warned that five of its reactors at three plants in Illinois are uneconomic, and are at risk of closing, unless the structure of the power market that includes the state is reformed.

Some US regulators have begun moves in that direction. Late last year the Federal Energy Regulatory Commission held workshops to discuss reforms to market design and pricing structures. It has also been studying the reliability of power supplies.

Marvin Fertel, president of the Nuclear Energy Institute, the industry group, said in February that the cold weather in the US early in 2014 had woken regulators up to the importance of the reliability of energy supplies.

When coal piles and handling equipment froze, and gas production was disrupted by the extreme cold, nuclear plants were unaffected.

That lesson, Mr Fertel says, was being acknowledged by generators, regulators and grid operators.

PJM Interconnection, which runs the grid covering a large section of the northern and eastern US, including Illinois, has set out proposals for a plan, called Capacity Performance, to reward companies that supply guaranteed flows of power when needed. Nuclear generators would be among the principal beneficiaries.

Another proposal to help nuclear generation is the plan for a 15-year power purchase agreement in Ohio put forward by FirstEnergy, the Akron-based electricity group. The state's regulators are now assessing the idea, which would commit utilities to buying power from one nuclear and two coal plants owned or part-owned by FirstEnergy.

Carol Browner, who led the US Environmental Protection Agency during Bill Clinton's presidency and was Mr Obama's top adviser on climate and energy policy during 2009-11, last year joined the leadership council of Nuclear Matters, a group backed by Exelon, Dominion, FirstEnergy and other companies that works to raise awareness of the threat to the industry. She supports the campaign, she says, in part because of the role nuclear power plays in holding down US carbon emissions.

"Climate change is the biggest problem the world faces, and we can't just get rid of these carbon-free sources of energy while we figure out how to manage this over not just the next five years, but over the next 25, 50, 100 years."

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