State and federal nuclear support schemes in dynamic electricity market conditions: Insights from NYISO and PJM

Muhammad Bah

Working papers from Faculty of Business and Economics - University of Basel

Abstract: Since 2017, several U.S. states have put in place out-of-market financial support schemes for nuclear power plants operating in deregulated electricity markets. In late 2021, the federal government announced the introduction of two new support schemes to secure the continued operation of nuclear power plants. This policy paper evaluates the profitability of state subsidized nuclear plants in the NYISO and PJM markets over a five-year period between 2017 and 2021. Results indicate that apart from 2019, nuclear power plants were financially robust, relying solely on market revenues without the need for state support schemes. More importantly, the recent upswing in competitive electricity market prices suggests that additional federal-level support schemes are not economically justified in the current market conditions. I provide several suggestions to reconfigure the support schemes to reflect dynamic market conditions and ensure only vulnerable plants are granted out-of-market support.

Keywords: nuclear support schemes; electricity market; excess profit; NYISO; PJM (search for similar items in EconPapers)
JEL-codes: H71 Q41 Q48 (search for similar items in EconPapers)
Date: 2023-02-28
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: State and federal nuclear support schemes in dynamic electricity market conditions: Insights from NYISO and PJM (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2023/05

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