Pro-Nuclear Victory in New Jersey! But at the Cost of a Hefty Subsidy for Solar

By Michael Shellenberger

New Jersey’s passage today of legislation to prevent the premature closure of the state’s nuclear plants is another crucial victory to save America’s largest source of clean energy.

Climate and environmental scientists organized by Environmental Progress urged New Jersey’s Governor Philip Murphy to pass the legislation, and I testified in support of the legislation last December.

But the legislation’s passage came at a hefty price: 18 to 28 times more in subsidies for solar energy than will be received by nuclear plants.

In order for nuclear plants to receive the $11 per megawatt-hour (MWh) subsidy they needed to keep operating, Gov. Murphy, anti-nuclear groups EDF and NRDC, and companies that install panels like Sunrun demanded a whopping $210/MWh to $304/MWh for solar energy.

The extended subsidy for solar comes at a time of ubiquitous claims that the cost of solar panels and wind farms has come down so much that nuclear energy no longer makes economic sense.  

Saving nuclear plants in Illinois in 2016 also required more subsidies for solar — but at about one-quarter the rate of New Jersey. In Illinois, solar receives five times more per megawatt-hour ($50/MWh) than its two subsidized nuclear plants receive ($10/MWh).

Late last year, New Jersey’s legislature was poised to pass the cheaper nuclear-only legislation when then-governor-elect Murphy asked the state assembly to hold off until he came into office in 2018. The result is legislation that will have a far larger impact on the electricity bills of consumers.

The massive subsidy for solar takes nothing away from the New Jersey victory, which benefited from a stronger and better-coordinated efforts by a nuclear industry weakened by the 50 year war against it.  

In a speech to Wall Street analysts this morning, the Nuclear Energy Institute’s president, Maria Korsnick, warned against “a myopic focus on short-term prices“ and criticized efforts “that advance renewables while closing nuclear plants” — strong language for an industry that is frequently taciturn to a fault.

In contrast to other state subsidies for nuclear, the New Jersey legislation sets no time limit for the operation of the state’s nuclear plants. While the subsidy must be re-valued by the state’s regulatory commission every three years, it could last until the end of the plants’ licensing life and even subsidize their extension.

Nuclear plants, experts agree, could last for 80 to 100 years or even longer, if they are properly maintained and regularly updated.

Korsnick warned that all seven operating nuclear plants in Ohio and Pennsylvania will be replaced by coal and natural gas if state legislatures fail to follow the lead of New York, Illinois, Connecticut, and New Jersey.

There will be another hearing on the fate of Pennsylvania’s nuclear plants next Tuesday.

For pro-nuclear advocates, the lesson from New Jersey is clear: advocacy works. From Sweden and France to New Jersey and Illinois, nuclear plants can be kept on-line, but they must be constantly fought for against those who have, for four decades, sought to replace them with fossil fuels and renewables — no matter the economic or environmental cost.