What the climate bill does for the nuclear industry

The sweeping Inflation Reduction Act that President Joe Biden signed last week includes $369 billion in funding to help combat climate change. As part of that, the law includes significant help for the nuclear energy industry.

Overall, the provisions in the law could decrease greenhouse gas emissions by 37 to 41 percent under 2005 levels by the year 2030, according to an analysis by Energy Innovation, a policy modeling company. Some of the most widely touted provisions in the IRA include electric vehicle tax credits, and rebates for heat pump installation in homes and solar panel installation on home roofs.

It also includes significant benefits for the nuclear industry, as energy generated with nuclear reactors generates no greenhouse gases. Nuclear advocates are celebrating the law as a win.

“For years, the nuclear industry and advocates have been pushing for a more level playing field and equal treatment with other clean energy sources on a tax and federal subsidy basis,” Brett Rampal, a nuclear energy expert, told CNBC. “The IRA creates a new future for clean energy technologies, including nuclear energy, that is a more level playing field and allows for technologies to compete on a more even basis as well as on their unique characteristics. This is definitely a win for nuclear energy.”

Here’s an overview of how the climate bill will impact the nuclear sector.

Starting in 2024 and running through 2032, utilities will be able to get a credit of $15 per megawatt-hour for electricity produced by existing nuclear plants. If the price of power rises above $25 per megawatt-hour, then the credit will gradually decrease, but it doesn’t phase out completely until energy prices reach around $44 per megawatt-hour, explained Matthew Crozat, the executive director of strategy and policy at the Nuclear Energy Institute, a Washington D.C.-based trade group.

“Every plant is different and some plants have a different revenue model but we can say that this credit will offer a reprieve from the low revenues that had forced more than a dozen reactors to close,” Crozat told CNBC.

To be eligible for the full $15 per megawatt-hour base tax credit, a nuclear power plant operator has to pay workers operating and doing maintenance on the power plant “prevailing wage requirements,” according to the Nuclear Energy Institute.

For example, Bill Gates‘ nuclear…