The imposition of caps on carbon dioxide emissions will impose substnatial costs on much of American industry. It will also create substantial winners. Alternative energy producers, such as solar and wind, will benefit, as will lower-carbon fuels sources, such as natural gas. the nuclear power industry is also expecting to profit handsomely from carbon dioxide controls, the WSJ reports.
Nuclear operators stand to gain from greenhouse-gas legislation in two ways. For starters, their plants don’t spew carbon dioxide, so they would not have to buy emissions allowances, giving them a competitive advantage over competitors that burn fossil fuels.
In addition, a cap-and-trade system would probably push up wholesale electricity prices in deregulated markets, as coal- and natural-gas-burning utilities jack up prices to recover the additional cost of allowance purchases. In deregulated markets, generators with the highest costs set the market price, so lower-cost nuclear operators could enjoy the higher prices charged by coal- and gas-burning utilities without the higher costs. In states that didn’t deregulate their electricity markets, nuclear plants mostly are part of regulated utilities and furnish electricity to utility customers at prices tied to their underlying costs, eliminating the opportunity for such profit.