Since 2007, there have been applications to license 26 new nuclear reactors in the US. Nine have been canceled or suspended indefinitely in the last 10 months, and 10 have been delayed 1-5 years.
Why? Because, as almost always happens with nuclear plants, they end up being much more expensive than original plans project. In these cases, costs over-runs were triple that of estimates, while the price for natural gas declined, making them even less attractive.
And, importantly, energy efficiency programs combined with reduced energy demand because of the recession dramatically reduced the need for new power supplies.
Nuclear looks good to lots of people - and Republicans are demanding strong incentives for it in the Senate Climate Bill - but the history of nuclear is frought with significant cost over-runs, multiple delays and cancellations. It's a fact that energy efficiency combined with renewable energy sources such as solar and wind are much faster to ramp up and much cheaper.
It makes absolutely no sense to burden taxpayers with huge subsidies for an industry with such a poor track record, which also presents perfect targets for terrorist attacks.
Read the article we wrote awhile back that summarizes the issues surrounding nuclear energy.
Can We Afford More Nukes?
Expanding nuclear power capacity in the US beyond the current fleet of 104 reactors - which don't emit greenhouse gases once they're operating - has the potential to help combat climate change. Nuclear power currently generates about 20% of U.S. electricity, and building more reactors could reduce the 50% market share held by coal-fired power plants, the nation's primary source of global warming emissions.
But is nuclear power a climate solution we can afford? The short answer, according to the Union of Concerned Scientists (UCS), is no. As UCS Nuclear Energy and Climate Change Project Manager Ellen Vancko notes, "Even if you discount nuclear power's current security and safety problems, the skyrocketing cost of construction could be the industry's Achilles' heel."
Wall Street has made it clear that it will not finance the nuclear industry's expansion without federal loan guarantees because of the high risks and uncertain costs associated with such investments. A recent Moody's report characterized investments new nuclear plants as a "bet the farm" risk, stating that companies that build new reactors will take on a higher business and operating risk profile, which will threaten their credit ratings.
To circumvent these financing challenges, the nuclear industry is supporting legislation that was passed by the Senate Committee on Energy and Natural Resources in June. That bill, S. 1462, would underwrite the industry's expansion by creating a new Clean Energy Deployment Administration (CEDA). Although CEDA's provisions are poorly understood, the implications of this pending legislation are enormous, according to UCS.
A recent Congressional Budget Office (CBO) report concluded that S. 1462 would exempt the Department of Energy's (DOE) Loan Guarantee Program, which was established under the Energy Policy Act of 2005, from Federal Credit Reform Act provisions requiring such programs to be funded each year by congressional appropriation. "The effect of this exemption," the CBO stated, "would be to give DOE permanent authority to guarantee such loans without further legislative action or limitations." That means DOE could give virtually unlimited loan guarantees to expensive and risky new technologies, all underwritten by taxpayers without congressional oversight. (The CBO report is available online.)
"The Congressional Budget Office estimates that the Energy Department could hand out more than $130 billion to nuclear and fossil fuel energy projects," Vancko said. "That's a lot of money. But what is even more alarming is that CBO's calculation is based solely on pending Energy Department loan guarantee applications. It does not include an estimation of the hundreds of billions of dollars in additional loan guarantees that could be approved by a new energy bank if this program becomes law."
Vancko recently co-authored a briefing paper, "Nuclear Power: A Resurgence We Can't Afford," which is available at the link below. In it she provides a clear-eyed look at the nuclear industry's history of cost overruns, projections of current reactor construction costs, comparisons with cleaner, more cost-effective low-carbon energy options, and the potential risks to taxpayers from overly generous federal subsidies and loan guarantees.
The UCS published a separate briefing paper earlier this year, called "Nuclear Loan Guarantees: Another Taxpayer Bailout Ahead?"
