In recent years, wholesale electricity prices and CO2 emissions from generation have both declined, primarily due to lower natural gas prices (which has led to significant coal-to-gas switching), along with negligible demand growth and substantial amounts of new renewable generation coming online. Lower wholesale power prices and reduced CO2 emissions are generally positive developments for consumers and the environment; however, there is a tension between these effects. Persistently low power prices can threaten the economic viability of existing nuclear generators, which currently provide the majority of carbon-free power in the United States.

The potential vulnerability of some nuclear power plants to premature retirement creates a major threat to the attainment of CO2 reduction goals. Although the Environmental Protection Agency’s (EPA) Clean Power Plan has been stayed pending legal challenges, and may be rescinded by the new administration, any carbon abatement program will be made more difficult by a loss of nuclear generation. This analysis examines the aggregate and regional carbon emission impacts that premature nuclear retirements might cause, and evaluates the implications of such retirements for the ability to achieve carbon reductions in the power sector.

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