The Trump administration’s plan to subsidise unprofitable coal and nuclear plants may cost as much as $35 billion a year, according to a study backed by trade groups opposed to the idea.
Giving power plants an out-of-market annual payment of $50 per kilowatt of capacity — roughly the average operating shortfall for plants running at a deficit — would cost $16.7 billion a year, according to a report from The Brattle Group. Another model that includes a return on invested capital, as the US Energy Department proposed last year, could cost $20 billion to $35 billion per year.
The report was commissioned by Advanced Energy Economy with funding from trade groups including the American Petroleum Institute and the American Wind Energy Association. It assumes the
government’s effort to keep unprofitable power plants running would apply to all operating US coal and nuclear plants. A third scenario that subsidises only power plants experiencing shortfalls would range from $9.7 billion to $17.2 billion per year, according to the report.