A report by Brattle economists finds that Ohio’s nuclear energy plants will contribute approximately $510 million to the state gross domestic product (GDP) over the next ten years (2018-2027), in addition to other economic and societal benefits.
The report was prepared for Nuclear Matters in the context of recent low wholesale power prices that have put some nuclear plants in financial jeopardy. This has led some states to develop policy support mechanisms for nuclear plants. The report evaluates the contributions of the Davis-Besse and Perry nuclear power plants to Ohio’s economy, considers how these plants affect electricity markets and prices as well as in-state productive activity, and studies the resulting ramifications of these factors throughout the state’s economy. This study does not consider any potential policy mechanism to support the plants, and so it determines the gross economic benefits of preserving these nuclear power plants, not the net benefit of such a policy.
The authors find that the Ohio nuclear plants account for nearly 4,300 in-state jobs (direct and secondary). In addition, energy generated from the nuclear plants will prevent nearly nine million metric tons of carbon dioxide (CO2) emissions annually over the next ten years, valued at $548 million annually using the U.S. government’s estimate for the social cost of carbon.
The Brattle report also finds that Ohio’s nuclear plants:
- Help keep electricity prices low – without nuclear power, Ohio’s residential, commercial and industrial customers would pay $177 million more for electricity annually, almost $1.3 billion more in present value over the next ten years.
- Are responsible for an estimated $23 million in state and local tax revenues annually.
- Avoid significant amounts of other air pollutants, such as nitrogen oxide (NOX), sulfur dioxide (SO2) and particulate matter, valued at $87 million per year.
The report estimates the economic value of the Davis-Besse and Perry plants using Regional Economic Models, Inc. (REMI), a widely-used regional economic model, which for this study was linked with a Brattle planning model of the electricity sector in order to better capture the dynamics of power markets and prices. By linking these models, the authors were able to measure the overall value of Ohio’s economy with and without the nuclear industry, providing the most accurate picture of the nuclear plants’ contribution to the state economy. This approach explicitly nets out the economic value of the alternative generation that would be necessary in the absence of nuclear power, to find the true incremental contribution of the nuclear industry.
“Ohio Nuclear Power Plants’ Contribution to the State Economy” is authored by Dr. Berkman and Brattle Principal Dean Murphy. The report can be accessed on Nuclear Matters’ website.