The advent of cheap natural gas in the U.S. has meant that nuclear as a source of power generation is becoming less important day by day. Nuclear plants including Kewaunee (Wisconsin), Crystal River (Florida) and San Onfre (California) have shut down this year. Vermont Yankee Nuclear Plant located in Vermont recently joined the ranks, with an announcement to completely cease generation by late 2014.

Vermont Yankee Nuclear

The 605 megawatt (MW) plant was owned by Entergy, a U.S.-based firm which currently runs nine out of its forty plants on nuclear energy. The plant was in operation since 1972 but Entergy quoted cheap natural gas and high operating costs as the primary reasons for shutdown.

Nuclear share in total power of U.S.

In June 2013, the contribution of nuclear to total power generation of the United States declined to 18.6 percent from 21.6 percent in March 2009, clearly indicating the shrinking role nuclear will play in the future economy.

Figure 1: Monthly Generation of electricity in the US (000 GWh) by source

Source: Energy Information Administration (EIA)
Source: Energy Information Administration (EIA)

The installed capacity in nuclear was however, increasing up till 2011 but the contribution to total power generation capacity was declining. In 2011, total nuclear capacity was 9.3 percent of the total power capacity, a sharp drop from 1990 when nuclear contributed 13.8 percent to the total power capacity of the country. On the other hand, natural gas was increasing its share in multiples and natural gas plants contributed 41.4 percent to total power generation in 2011 versus a mere 19.5 percent in 1990.

Figure 2: Annual Capacity of electricity in the US (000 MW) by source

Source: Energy Information Administration (EIA)
Source: Energy Information Administration (EIA)

Aging nuclear plants

Many of the U.S. electric generating capacity is more than thirty years old. This includes more than half the nuclear plants. The Energy Information Administration (EIA) reports that there was a wave of nuclear plant construction from the late 1960s to about 1990.

‘Most of these plants were built under a regulated market structure that facilitated financing by a utility industry with much higher average credit ratings. As old plants retire, replacement may favor smaller, more easily financed increments of capacity better aligned with today’s slower electricity demand growth,’ reports Bloomberg.

Figure 3: Age and capacity of electric generators by fuel type (as at end 2012)


Nuclear has been promoted as a green solution to our energy problems, but the high costs associated with nuclear plant construction has discouraged investment in this area. Currently, there are just five new reactors under construction while four plants have already been shut down this year. This means that we will see a sequential decline in nuclear capacity and its contribution to the overall U.S. energy portfolio. The EIA’s energy outlook projects hat nuclear power will decline 40 percent by 2040.