The Energy Information Administration forecasts a 28 percent increase in our nation’s power demand through 2040 (Perry, 2014). The Obama Administration’s goal is to generate 80 percent of our nation’s energy needs through clean energy sources by 2035. Nuclear energy, natural gas, wind, solar and clean coal are part of the Administration’s plan to move our country to a cleaner energy future. I’ll admit, I spent a lot of time on this assignment (way more than the 10 hour allotment for the week) because I know very little about energy subsidies and I have a curiosity that is hard to manage at times. I was questioning whether or not it was true that greater attention and support from investors and the government was being paid to nuclear than renewable energy production. Then I ran across an article that referenced a comprehensive study from the venture capital firm DBL Investors that found that the “federal commitment to [oil and gas] was five times greater than the federal commitment to renewables during the first 15 years of each subsidy’s life, and it was more than 10 times greater for nuclear.”(ACORE, 2014) Even though that was in the past, I think there are valid reasons for why that was — and perhaps still should be — the case. First, our nation’s system for delivering electricity to the end user is, for the most part, reliant on central-station generation concept, which combines constant or base load generation with generation designed for periods of high consumer demand. Both are critical in maintaining a safe, reliable electric system that meets the demand electric consumers place on it every hour of every day. Once developed, base load resources such as coal, natural gas, hydroelectric and nuclear are generally the most economical plants to operate. They have very little variability in output, unlike other renewable energy generation that is dependent on the wind or sun. Currently, nuclear represents 12 percent of the country’s generating capacity and operates at around 90 percent capacity. In comparison, wind generation represents 4 percent of the country’s generating capacity and the capacity value — how much of the wind plant’s capacity can be counted on for meeting electric demand — is only 15 to 20 percent of the nameplate rating (AWEA, 2013). Second, nuclear plants have higher fixed costs and require more lead time for development, so the amount of investment from private industry or the government is higher than what is required for renewable projects. For example, the only nuclear project currently under development is a $14 billion project of which $8 billion has been funded by the federal government through loan guarantees. Finally, many of our nation’s nuclear facilities are located near major urban areas, so it seems reasonable that our government support projects designed to upgrade these older facilities to allow them to continue to provide a reliable supply of energy for the future. Nuclear currently supplies 20 percent of the energy in the United States and 64 percent of all zero-carbon emissions sources (Perry, 2014), making it already an important part of the base load and clean energy resource mix. Given nuclear energy’s current role in our nation’s energy mix, the demonstrated efficiency and reliability factors of the resource and the goals of the Obama Administration, it seems government and investors should lend more support to nuclear in the future.

With regard to niche opportunities, I believe if society truly has a desire to transition from the traditional central-station concept to more distributed generation, we need to develop large-scale battery storage systems that can effectively manage the intermittent nature of renewable energy generation that relies on weather, wind or sun. Because I work for an electric utility, I think there are also niche opportunities for entrepreneurs who can figure out how to transition our traditional integrated utility structure that was designed around the central-station concept into one that embraces more distributed generation without placing a huge financial burden on electric consumers who foot the bill.

1. American Council on Renewable Energy. Energy Fact Check. 2014. Retrieved from http://www.energyfactcheck.org/slideshow/even-with-massive-subsidies-renewable-energy-technology-cannot-survive-renewables-have-been-getting-subsidies-for-years-now-they-should-be-able-to-stand-on-their-own/

2. American Wind Energy Association. 2013. Retrieved from http://www.awea.org/Issues/Contect.aspx?ItemNumber=5453

3. Perry, Mark. American Enterprise Institute. September 2014. Retrieved from http://www.aei-ideas.org/2014/06/alternative-energy-sources-like-wind-and-solar-are-no-substitute-for-low-cost-zero-emissions-nuclear-power/

4.PBS News Hour Video. ENGR312 Lesson 2 Content.