The government is going to spend billions of dollars to keep nuclear power plants open in the United States because they’re losing too much money to stay open otherwise.

Nuclear power plants generate clean, greenhouse-gas free energy, which could help the Biden administration meet its own ambitious climate goal of reducing net greenhouse gas pollution by 50% from 2005 levels by 2030.

The Bipartisan Infrastructure Law President Joe Biden signed in November includes a $6 billion program intended to preserve the existing U.S. fleet of nuclear power reactors. On Feb. 10, the Department of Energy’s Office Nuclear Energy took first steps to begin the process of distributing that money.

That money is needed because multiple nuclear plants are “at risk for early closure” and several others “have already closed prematurely due to economic circumstances,” according to government documents.

Why?

“This really traces back to deregulation in the industry,” said George Bilicic, vice chairman and global head of power energy and infrastructure at the financial advisory and asset management firm Lazard.

In the United States, 17 states with nuclear power plants are regulated, and 10 states with nuclear power plants are deregulated, according to the Nuclear Energy Institute.

In deregulated markets, nuclear power generators have to sell their energy on an open market, where distribution companies will chose the most inexpensive energy option that can do the same job. Today, that’s often natural gas.

“One of the key factors that drives the economics of nuclear is just how cheap natural gas is,” Ben King, a senior analyst with the energy and climate division at Rhodium Group, a market research firm, told CNBC in a phone call.

“When natural gas is cheap, it is extremely difficult for nuclear to make the revenue that it needs to remain operational and economic,” King said.

Given current natural gas prices and projections, King and his colleagues have projected that as much as a third of current nuclear energy fleet capacity in the U.S. may retire. The nuclear fleet will decline from about 96 gigawatts at about 60 nuclear facilities in the U.S down to as low as 60 gigawatts by 2030, the firm predicts.

While the $6 billion in the Infrastructure law is helpful to stem a potential flood of closures, it is still not enough, King said. In their modeling, the Rhodium Group pairs the $6 billion with the proposed existing nuclear production tax credit that’s part of the Build Back Better Act, which the Joint Committee on Taxation score estimates to be $23 billion.

“Taken together, they are much more effective at retaining nuclear and keeping the U.S. on track” for its emissions reductions goal, King told CNBC.

Deregulating energy markets was supposed to drive innovation and competition. But now that fighting climate change has become more urgent, it’s tempting to question that move.

“There’s a debate to be had about whether deregulation worked or not, or whether the industry should have stayed regulated,” Bilicic said. The fact that the federal government is now stepping in to prop up nuclear energy suggests it was a mistake.

“On the other hand, there are a lot of experts that would point to reduced costs, and innovation, and the creation of some spectacular companies that are that are thriving in a deregulated environment.”

Another factor in the viability of a nuclear power plant is whether it is part of a larger utility company. In those instances, nuclear power plants “tend to be a little more insulated to the day to day, month to month machinations of the market,” King said.

The other big sources of zero-emissions energy include wind, solar, and hydropower, and prices for those energy sources are often the lowest available in the market.

Nuclear has to compete against those lower prices, too, although not to the extent of natural gas.

“The impact that the renewables are having at the level that they’re installed pales in comparison to the impact that gas has,” King said.

More problematically, wind and solar are intermittent sources of energy — the sun isn’t always shining and the wind isn’t always blowing. They can’t replace nuclear (or gas or coal) as baseload sources until utility-scale battery technology is developed and built out. That’s still years away.

“This is what folks would refer to as the holy grail of the energy transition,” Bilicic said. “To have a storage solution that was practical, that you could bundle with renewables, so that people can have reliable 24×7 power. And there’s just nothing like that in the marketplace. And nothing on the horizon that we see that that could be scaled to serve what mankind needs.”

A slew of innovators such as ESS and Form Energy are getting money from prominent investors to build out battery technology, and established companies like Tesla are also working on the problem, but utility-scale battery storage is not at scale yet.

“To hit these decarbonization goals, you need a lot of things to be put together, to be stitched together. And one of those is his nuclear power,” Bilicic said.

One way to look at the problem is that in deregulated energy markets, there’s no accounting for greenhouse gas emissions in deregulated energy markets. Price alone wins.

Putting a price on carbon emissions might help sustain an otherwise deregulated energy market while still achieving climate goals.

“If we did have a carbon pricing environment, those those nuclear power plants would be more valuable,” Bilicic said. “And implicit in this public policy debate is some recognition that that value is not being acknowledged in the marketplace, and we need these plants to produce that value.”

That’s one reason why Bilicic supports the government subsidy for nuclear power plants.

“In my view, it’s not like the money is being just given for no purpose,” Bilicic told CNBC. The money “is being given because of a recognition that these nuclear power plants produce a benefit that they’re not being paid for in the marketplace.”