Michael Levi: In the near future, renewable is cost-competitive in niches, but it is still not broadly competitive in the US economy. It has a potential to be.
Renewables have cost and intermittency challenges. There is important progress that is being made in renewable energy. I think a lot of that story has been buried in the oil and gas discussion in the last couple of years, but we are seeing record-low prices across the board, and we are seeing record-high deployments. It is important to remember that we still need government support in all these areas if you actually want to see costs come down meaningfully.
James Stafford: How do you define the ‘near future'?
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Michael Levi: I do not see a radical change in the relative price of renewable energy and fossil fuels in the next 5 years. Ten years is more difficult to predict, but I would be skeptical. When you start to look ahead one or two decades, particularly when you add in policy uncertainty, it is very difficult to predict what will happen.
James Stafford: Can the US afford to turn its back on nuclear energy?
Michael Levi: If you mean by turning its back, you mean a phasing-out of nuclear energy, I do not think that is sensible to do. Nuclear energy provides 20% of our electricity, and the marginal cost of production is extremely low for existing power plants. The real question is can the US afford to turn its back on nuclear in the future as a source of zero-carbon energy growth? The answer is: we do not know, because we do not know what the alternatives will be, or if there will be significant alternatives. So you want to keep nuclear alive as an option; that means trying to figure out ways to bring down costs, particularly financing costs. It means looking for ways to resolve, or at least partly resolve the waste questions, and it means looking for ways to potentially innovate on small modular reactors to provide a different economic model and a different construction model for nuclear power.
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