The Grid Optimization Blog

Organized Power Markets Not Delivering Optimal Outcomes for the Long Term

Organized power markets have led to the poor economic outlook we are seeing for existing nuclear plants because these markets historically have not valued the zero carbon emissions nuclear plants produce or their high availability even under extreme conditions.

In New York State it has become evident that aggressive goals for reducing carbon emissions would not be achieved without the continued operation of existing nuclear plants. To deal with this the state public service commission has just adopted a clean energy standard that calls for subsidizing operating nuclear units through the sale of zero emission credits to support them economically and allow their continued operation. For the present, the upstate Ginna, Fitzpatrick and Nine Mile units are covered by the program. Further consideration of the politically embattled downstate Indian Point Power Station in the plan will take place down the road. Realistically, however, the plant which provides over 25% of the power to New York City should ultimately qualify for a subsidy.

The same market conditions in New York also exist in other parts of the country, especially Illinois. For the survival of nuclear power in these  areas, the climate change attributes of this source will have to be taken into account from a valuation perspective similar to what New York has done. The economic outlook for dealing with climate change and future energy needs awaits the next steps to be taken on a national basis.

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