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Nuclear projects face financial obstacles (emphasis added):
Hopes for a nuclear revival, fanned by fears of global warming and a changing political climate in Washington, are running into new obstacles over a key element — money.
A new approach for easing the cost of new multibillion-dollar reactors, which can take years to complete, has provoked a backlash from big-business customers unwilling to go along.
Financing has always been one of the biggest obstacles to a renaissance of nuclear power. The plants are expensive, and construction tends to run late and over budget. The projected cost for a pair of proposed Georgia plants would be $14 billion; the Obama administration last month pledged to provide them with $8.3 billion in federal loan guarantees.
So utilities have turned to state legislators and regulators to help contain capital costs. In states such as Georgia, Florida and South Carolina, utilities have won permission to charge customers for some of the cost of new reactors while construction is still in progress — a financing technique that would save utilities a couple of billion dollars for each reactor. Previously, utilities had to wait until power plants were in operation before raising rates, as they still do in most states.
“We tell people it’s like paying off the interest on your credit card as you go along, rather than letting it compound,” said Suzanne Grant, a spokeswoman for Progress Energy.
But businesses and other electricity users in those states aren’t buying that argument. Instead, they are saying utilities are pawning off much of the projects’ liabilities on customers because bank lenders and investors will not take the risks.
“It’s a terrible idea,” said Jim Clarkson, a consultant with Resource Supply Management, a Georgia firm that advises companies on how to reduce electricity use. “We’ve had decades of subsidies for nuclear plants and all sorts of preferential treatment. They still require loan guarantees because the smart money won’t touch them.”
“Nuclear power is very important,” says John W. McWhirter, who represents the Florida Industrial Power Users Group. “We just wish consumers could be protected.”
The reaction of big businesses, as well as other consumers, has turned states that were bastions of support for nuclear power into hazardous territory. And it could thwart the Obama administration’s efforts to jump-start nuclear reactor construction by handing out chunks of the $18.5 billion in federal loan guarantees Congress authorized in 2005.
By all means (including government backed loans, if necessary), go read the whole thing.
As I’ve said before, nuclear power in the US will get every reasonable and unreasonable chance to succeed. We’ll keep throwing money at it, trying new reactor designs, finding new angles around the brutal economics of the technology (like asking electricity customers to start paying for it before the reactors are built), and looking the other way when leaks are detected (i.e. 25 Percent of U.S. Nuclear Power Plants Are Leaking Radioactive Chemicals. I’m not sure what it will take before this ends, but I see only two realistic possibilities:
We finally figure out how to make nuclear power work safely and economically, and it can either stand on its own financially or requires minimal government help. (And no, I don’t consider the track record of old nuclear power plants to be proof we can make the economics work. That’s proof that we did make it work decades ago, even if the reactors are still online. The question is how we should be spending scarce resources on new generating capacity, and there’s plenty of evidence that nuclear power has gone from being “too cheap to meter to too expensive to matter”, as Joe Romm and no doubt others have said.)
Once again, I’m not a nuclear power hater. Make it work, taking into account all costs and risks, and I’ll be the most vocal supporter of the technology you can find.
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