Economists say nuclear power might lower Ohio energy costs
Electricity prices are rising in Ohio with increasing demand from data centers powering artificial intelligence. Adding power from nuclear plants would lower prices, a panel of economists said, but some also had doubts.
Gov. Mike DeWine and JobsOhio have been pushing tax incentives for data centers even though they create relatively few jobs. By one estimate, taxpayers are foregoing at least $1 million in revenue for each job created.
The centers have, however, dramatically increased energy demand in a state whose leaders have shown an inclination to gut efficiency programs. The state’s Republican leadership also has demonstrated a hostility to most renewable sources of energy.
They were not, however, hostile to nuclear energy in 2019, when some took $61 million in bribes from Akron-based FirstEnergy and passed a $1.3 billion bailout. The lion’s share of the money was meant to prop up two money-losing reactors in northern Ohio. Then-House Speaker Larry Householder, R-Glenford, is serving a 20-year federal prison sentence in connection with the scandal.
But with smaller, hopefully less-dangerous reactors under development, does it make sense to build some in Ohio?
As part of a regular survey by Scioto Analysis, a panel of 18 economists was asked whether it agreed that “Encouraging development of new nuclear power generation facilities will lead to lower energy prices in Ohio.” Thirteen said they did and five were uncertain.
Among those who agreed, the law of supply and demand applied — put more power on the grid and it becomes cheaper.
“Perhaps not immediately, but over the long run increased supply should put downward pressure on prices,” Will Georgic of Ohio Wesleyan University said in the comments section of the survey.
But Faria Huq of Lake Erie College said there are many uncertainties.
“Basic laws of demand and supply would suggest that in the face of increasing demand, supply needs to be increased in order to keep prices low,” she wrote. “However, given the very large fixed costs associated with developing nuclear power generation facilities, there would need to be reliable projections of the specific energy needs of the data centers prior to investing in them. There should also be some form of commitment by the data centers to use the additional energy produced.”
Given that nuclear generation by definition involves radioactivity, there can also be a question of possible health hazards. However, some of the economists said, those have to be weighed against those associated with burning fossil fuels.
For example, Ohio is home to the Gavin coal plant, whose smokestacks pump out a toxic plume that a Sierra Club analysis estimated kills 244 Americans a year. Even old-school nuclear plants in the Western world are far safer, said Jonathan Andreas of Bluffton University.
“Nuclear power has a long track record and Western plant designs have produced much, much lower rates of health problems for area residents than coal-fired plants, which have killed hundreds of thousands of Americans due to pollution,” he wrote. “Even the worst nuclear disasters in the West, Three-Mile Island and Fukushima, killed very few people directly although there were many indirect deaths caused by the evacuations. Those are the worst disasters in the entire global history of capitalist nuclear reactors, and the technology has been improving.”
When asked whether the economic benefits of adding nuclear generation in Ohio would outweigh the costs, the economists were split more closely. Eleven said they would, while seven were uncertain.
“The demand for electricity is projected to increase substantially year after year,” wrote Iryna Topolyan of the University of Cincinnati. “It is imperative to find ways to increase supply with low climate impact. Nuclear energy looks like a good candidate. My reservation is that, within the long time frame it takes to build and bring online a new nuclear plant, (far safer nuclear) fusion may become a viable and much more attractive option.”
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