During the height of the pandemic in 2020, Edward Kee took the time to write a book on the failure of the nuclear power market, how nuclear energy is the most sensible energy alternative, and what market failure means for this industry.
The biggest threat faced by nuclear power is from a market approach to the electricity industry. Electricity industry reforms have led to the early closure of existing nuclear power plants and stopped new nuclear power development.
In the US, 6,778 MWe of operating nuclear power plant capacity was closed early between 2013 and 2020, an additional 9,162 MWe of operating nuclear power plant capacity is scheduled to close early by the end of 2025, and more US merchant nuclear plants face financial issues that may lead them to close early.
In the market approach to electricity, short-term electricity market prices set the value of commodity electricity, electricity prices define power plant value, and private companies develop and own power plants based on financial returns. This market approach leads to less nuclear power, with the loss of the considerable public benefits that nuclear power provides.
Economists call this market failure.
This book includes information on the nuclear power and electricity industries, market failure in the nuclear power industry, and some ideas about resolving this market failure.
Key points covered in this book include:
- Why nuclear power matters
- Market failure
- Nuclear power in the real world
Find the book, Market Failure, Market-Based Electricity is Killing Nuclear Power, on Amazon.com.
Edward Kees provides the commentary from consultation on the Regulated Asset Base (RAB) model for new nuclear power plant investment in Great Britain.
The challenges of delivering new nuclear power plant (NPP) investment in the reformed electricity industry in Great Britain are significant and there is no simple or easy approach to resolve those challenges.
The RAB model may be a useful tool if properly developed and implemented, but:
-Is complex and may be difficult to implement;
-May not clearly reflect the objectives for the British nuclear power industry;
-May not be relevant without a broader review and/or re-opening of the overall approach to the electricity industry structure and electricity market approach in Great Britain; and
-May not deliver desired new NPP investment, or may only deliver new NPP investment with EdF and/or other State-Owned Enterprises (SOEs), such as CGN from China.
We provide a response to the Consultation questions, as context for later sections of this Commentary that describe some issues that must be addressed to attract new NPP investment.
Read the full article, #30 – UK RAB Model, on the Nuclear Economics website.