Analysts Ask Congress to Expand Clean Energy Tax Cuts to Nuclear Energy
WASHINGTON — Senior analysts from the Breakthrough Institute circulated a letter on Thursday compelling Congressional leaders to extend federal clean-energy tax credits to advanced nuclear energy.
Breakthrough Institute’s Jameson McBride, senior climate and energy analyst, and Adam Stein, senior nuclear analyst, jointly authored the letter in which they call for nuclear energy to be considered among the job-creating and emission-reducing forms of energy included in President Joe Biden’s energy policy. The letter was sent to Speaker of the House Nancy Pelosi, D-Calif., Rep. Eddie Bernice Johnson, D-Texas, Senate Majority Leader Chuck Schumer, D-N.Y., Sen. Joe Manchin, D-W.Va., as well as Reps. Kevin McCarthy, R-Calif., Frank Lucas, R-Okla., and Sens. Mitch McConnell, R-Ky., and John Barrasso, R-Wyo.
“The energy policy framework promoted by President Biden has focused on reducing emissions and supporting high-quality American jobs,” McBride and Stein said in the letter. “The bedrock principle of proposed policies like the Clean Electricity Performance Program is technological neutrality: any technology that reduces emissions and creates jobs is rewarded. The tax credit reform proposal is misaligned with this technologically neutral focus on emissions reductions and job creation. Advanced nuclear developers should be given a chance to compete on an equal footing with developers of other clean energy sources.”
The analysts contend that since advanced nuclear energy is at an earlier development stage than wind, solar and hydropower energy, the support of a federal tax credit would have a significant impact on its growth. The letter requests lawmakers to include incentives for advanced nuclear energy in the tax credit package among other clean and emerging energy sources.
The analysts note in the letter that a nuclear production tax credit of 1.8 cents per kilowatt-hour is already in place in the internal revenue code, but it is capped at six gigawatts of capacity and is only available for the first eight years of operation. Because 2.2 gigawatts of the capacity is already under construction at a plant in Waynesboro, Georgia, the current nuclear production tax credit only covers the remaining 3.8 gigawatts of advanced nuclear capacity — equivalent to a 4% increase in the country’s installed nuclear capacity.
“In contrast, leading studies have indicated that as much as 200-300% increase in nuclear capacity may be necessary to reach a net-zero U.S. energy system rapidly at low cost,” McBride and Stein said in the letter. “This illustrates the large gap between the status quo tax credits for advanced nuclear and ambitious decarbonization goals.”
The experts maintain in their letter to Congress that advanced nuclear energy should be given the same incentives for domestic energy production and employment because of its value to the national energy grid already dominated by renewables like wind and solar. Advanced nuclear energy could provide emission-reducing, dispatchable power to “balance out the variability and unpredictability from other sources,” McBride and Stein wrote.
Previously, Stein expressed support for the introduction of the bipartisan “Energy Sector Innovation Credit Act,” which would establish targeted support across a range of clean energy technologies, such as generation, storage, carbon capture and hydrogen production. The ESIC Act would allow up to a 40% investment tax credit or a 60% production tax credit for low market penetration technologies across a swath of energy sources.
Further, a group of Democratic senators introduced legislation in June that would make existing merchant nuclear power owners and operators eligible for the same $15 per megawatt-hour tax credit proposed for wind operators. The bill to extend the production tax credit to existing nuclear plants, entitled the “Zero-Emission Nuclear Power Production Credit Act of 2021,” was sponsored by Sens. Manchin, Tom Carper, D-Del., Ben Cardin, D-Md., Sheldon Whitehouse, D-R.I., and Cory Booker, D-N.J.
“As the Breakthrough Institute noted in a recent report, federal tax resources are limited, it is critical that incentives are directed at early-stage technologies that contribute to a clean energy system including offshore wind, enhanced geothermal, advanced nuclear, and carbon removal,” Stein said in a written statement.
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