By Jim Snyder - 06/21/09 12:25 PM EDT
The industry’s main trade group, the Nuclear Energy Institute, wants $20 billion more in loan-guarantees in addition to the $18.5 billion in financing currently available to kick-start the long-awaited industry revival.
These are loan guarantees not loans, but budget rules require appropriators fund 1 percent of the total to be guaranteed. In this case, that cost would be $200 million.
Nuclear power utilities should receive a boost from the climate bill now under discussion in the House because nuclear power doesn’t generate carbon dioxide, a leading greenhouse gas. Legislation that caps carbon emissions could make nuclear power more economical relative to other sources of electricity such as coal, which is a big emitter of CO2.
But the lobbying push underscores what remains perhaps the biggest hurdle new plants face: their estimated price tag.
Craig Nesbitt, a spokesman for Exelon, which operates a number of nuclear plants, said a two-unit generating facility that has a generating capacity of 3,000 megawatts could cost as much as $16 billion. That is about half of the company’s total market capitalization.
“Is any company going to risk half of its value on one project?” Nesbitt said.
Jim Miller, the president and CEO of PPL, a utility group based in the Northeast, said financing is the number one obstacle to building more nuclear power plants, not lingering questions about a permanent waste storage facility.
Seventeen utilities proposed projects worth a total of $122 billion in applications of the loan guarantee program. Miller said that demonstrates the demand within the industry for additional government assistance.
To critics, the fact that the industry wants more means that nuclear power should not be relied upon to cut carbon dioxide emissions.
Nuclear power is “abysmally expensive,” said Jim Riccio, nuclear policy analyst at Greenpeace.
Although nuclear plants don’t emit carbon dioxide when operating, they shouldn’t be seen as a solution to climate change because they can’t be built quickly enough to avert a climate catastrophe, Riccio said.
He also noted the industry’s long track record of cost overruns. “Basically, you would just be setting up the American taxpayer for the next major bailout,” Riccio said.
But providing the industry with more financial backing has support on Capitol Hill. Nuclear lobbyists came close to adding a $50 billion loan guarantee program to the economic stimulus package but the provision was stripped out in conference.
Meanwhile, an Energy Department source said the agency was nearing an announcement of the winners for the first $18.5 billion guarantee program. The Wall Street Journal reported that UniStar Nuclear Energy, NRG Energy, Southern Co., and Scana Corp. will share the award.