The Inflation Reduction Act (IRA) of 2022 will help to finance struggling nuclear reactors and could save dozens from being shut down early thanks to a 10-year production tax credit.
The $433 billion IRA, which was negotiated chiefly by U.S. Sen. Joe Manchin (D-W.Va.) with Senate Majority Leader Chuck Schumer (D-N.Y.), has been touted by Democrats as a way to fend off rising inflation, trim the federal deficit, and reduce carbon emissions while bolstering investments in domestic energy production and manufacturing.
It seeks to spend around $369 billion toward energy and climate programs over the next 10 years, and Democrats project that it will raise $739 billion in new revenue.
Included in the proposed legislation is a “zero-emission nuclear power production credit” that provides (pdf) up to 0.3 cents per kilowatt-hour (kWh) for energy produced from a zero-emission nuclear power facility, starting in 2024 and ending in 2032.
The proposed $15 per megawatt-hour credit for existing nuclear plants is estimated to cost $30 billion over a 10-year-period, Bloomberg reported, but will gradually decrease as power prices rise above $25 per megawatt-hour, according to the Nuclear Energy Institute, which told Bloomberg that the credit program is a “historic step forward in addressing the economic hurdles our carbon-free nuclear plants have been facing.”
Such a credit program could help President Joe Biden in meeting his ambitious climate goals, which include reaching net zero emissions economy-wide by no later than 2050.
The bill will be up for vote by the Senate in the next few weeks.
But, even though Democrats believe the IRA can bring relief to a struggling U.S. economic, some critics question whether the IRA is capable of achieving the stated goals.
” This bill should not pass and be made law. “It’s going to cause great pain for the American people,” Senator John Barrasso (Wyo.). The Hill reported that he spoke Tuesday. “I don’t care what it might cause members the Democratic Party
Nuclear Plants in Risk of Shutdown
Nuclear, a source of clean electricity that emits no emissions and is second to hydropower in terms of the amount of low-carbon electricity it produces. According to the U.S. Office of Nuclear Energy.
The United States has the largest nuclear power plant fleet in the world, with 93 reactors that can generate approximately 95,522 megawatts of electricity, and nuclear power accounts for roughly 20 percent of annual U.S. electricity generation.
However, in recent years the U.S. nuclear power industry has faced a string of economic and financial challenges, and around 22 percent and 38 percent of the nation’s 93 reactors are at risk of retiring in the 2030s, depending on natural gas prices, according to an analysis by Rhodium Group.
The provision in the most recent proposed legislation is made as global economies face an energy crisis. This has been triggered by Russia’s invasion and subsequent West sanctions against Moscow.
Russia responded by increasing its gas supply to Germany. Officials state that this was due to maintenance on its Nord Stream 1 pipeline.
As a result of this, the German Chancellor Olaf Scholz stated Tuesday that it was “rational” for him to delay closing Germany’s three last nuclear reactors. The Washington Post reported.
The nation’s transition to renewable energy saw the nuclear reactors shut down by December.
In announcing his support for the IRA on July 27, Manchin said, “Our persistent and increasing dependence on foreign energy and supply chains from countries who hate America represents a clear and present danger and it must end.”
Manchin stated that the new law will “investin the technologies required for all fuel types-‘from hydrogen, nuclear and fossil fuels and energy storage- to be produced and used the most clean .”
Katabella is currently a Turkish reporter. The Epoch Times covers business and news, with a focus on the United States.