The Biden Administration Establishes A $6 Billion Credit Facility for Nuclear Energy

According to the Department of Energy, the US nuclear power industry's 93 reactors provide more than half of the country's carbon-free energy (DOE). However, 12 reactors have been decommissioned since 2013, owing to competition from renewable energy and units that burn abundant natural gas.

Additionally, safety expenses have increased significantly in the aftermath of the 2011 tsunami at Japan's Fukushima nuclear power plant and the Sept. 11, 2001, terrorist attacks. The business generates hazardous waste, which is presently kept on-site at sites in 28 states.

The DOE said that it would accept applications from nuclear plant owners through May 19 for the first round of financing under its Civil Nuclear Credit Program. It will give priority to reactors that have previously stated their intention to shut down. The initiative, which is targeted for facilities located in states with competitive power markets, was financed by last year's infrastructure package.

Energy Secretary Jennifer Granholm said the government is "using every instrument available" to achieve President Joe Biden's objective of having the nation powered entirely by renewable energy by 2035, including prioritizing the current nuclear power fleet.

The $6 billion in funds will be dispersed in stages. The DOE has the authority to allocate $1.2 billion over the following four years, the last four years concluding in 2035. Officials said in February that they intend to begin assisting one or more plants this year.

PG&E (NYSE:PCG), whose plan to shut its two Diablo Canyon reactors in California in 2024 and 2025 has been authorized by the state legislature and regulators, stated that the nuclear credit scheme will not immediately alter its plans.

"As a regulated utility, we are compelled to follow the state's energy policy," PG&E spokeswoman Suzanne Hosn said in response to a question regarding the DOE initiative. "At this moment, the state's stance on the future of nuclear energy in California remains unchanged."

The initiative might benefit a number of companies, including PSEG and Constellation Energy Corp, who do not presently intend to close any facilities.

Senator Joe Manchin, a conservative Democrat, hailed the concept. Manchin had previously stalled Biden's clean energy legislation via the mammoth Build Back Better bill, which featured billions of more dollars in tax incentives for nuclear power development. Manchin has indicated in recent weeks that he would support limited legislation that invests in climate change mitigation.

"This program will ensure the continued operation of our reactors, so maintaining American employment, cutting emissions, and enhancing our energy security," Manchin stated.