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USA’s bailout for coal and nuclear industries could cost over $34 billion


A previous estimate, from a pro-coal group, put the cost at $4 billion.

Analysis out this week from The Brattle Group estimates the Trump administration’s coal and nuclear support plan could cost between $9.7 billion and $17.2 billion annually.

Working off of the scant details presented in a draft memorandum released by Bloomberg in May, The Brattle Group analyzed several scenarios the administration might employ to support nuclear and coal-fired power plants.

One assumes the government would pay an average $50-per-kilowatt flat rate to all plants, costing $16.7 billion a year. In another scenario, facilities experiencing shortfalls would be compensated directly at a customized level between $43 to $58 per kilowatt, costing between $9.7 billion and $17.2 billion each year. The draft memo suggested facilities would receive payments for two years, putting high-end cost estimates north of $34 billion for the duration of the program.

If the administration moves forward with a plan that pays facilities back for capital already invested in power plants, in addition to operating shortfalls, it bumps the price to $20 billion to $35 billion per year.

Brattle’s cost estimates dwarf the $4 billion calculated by the American Coalition for Clean Coal Electricity, presented in a report earlier this month. Groups that have opposed the potential policy, including Advanced Energy Economy, the American Wind Energy Association and the Natural Gas Supply Association, funded the Brattle report.

The widely varying price tags echo diverging opinions on the bailout policy.

In a statement on the Brattle analysis, Amy Farrell, senior vice president for government and public affairs at the American Wind Energy Association, called the costs “a steep price to pay in an era of U.S. energy abundance, when independent regulators and grid operators agree that orderly power plant retirements do not constitute an emergency.”……

July 30, 2018 - Posted by | business and costs, politics, USA

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