Federal loan guarantees have been unleashed to support new nuclear plant construction. Will this be the watershed event that finally gets nuclear moving forward in the United States?
Five Nuclear Challenges
Building reactors requires new federal commitment.
A CBO Study (May 2008), p. 27.
5. CBO’s calculation analyzes the “leveled cost” of building, operating, and financing a power plant which is a cost greater than the plant’s production cost.
6. See: “Nuclear Power’s Role in Generating Electricity,” A CBO Study (May 2008), pp. 16-18.
7. The estimated cost of $10B and more is supported by Moody’s, FPL Group, and Progress Energy, in recent publications and filings before Florida’s Public Utility Commission.
8. The four utilities, in order of value, are DUK [$21.3B], SO [$13.8B], FPL [$10.6B], AEP [$10.6B]. This list does not include Warren Buffet’s companies, the National Grid - a UK-based company, or other foreign entities, as foreign companies are prohibited by law from owning U.S. nuclear power plants.
9. See: “Nuclear Power’s Role in Generating Electricity,” A CBO Study (May 2008), pp. 10-11.
10. See: “The Consolidated Appropriations Act of 2008.” Pursuant to this authority, DOE issued solicitations on June 30, 2008 for up to $18.5 billion for nuclear power facilities.
11. See: “DOE Announces Loan Guarantee Applications for Nuclear Power Plant Construction,” (Oct. 2, 2008).
12. See: “Nuclear Power’s Role in Generating Electricity,” A CBO Study (May 2008), pp. 9, 21–23, 30.
13. The $18 per MWh remains fixed and there is no provision to adjust the credit for inflation.
14 . See: “Nuclear Power’s Role in Generating Electricity,” A CBO Study (May 2008), p. 26. The data are also supported by independent studies performed by the Energy Information Administration (EIA) and MIT.
15. Some states impose significant fees on tariffs to pay for energy conservation, energy incentive, and social programs.
16. See: Christopher Palmeri and Adam Aston, “Power Surge,” Business Week (July 24, 2008).
17 . See: Bob Priddy, “Ameren says, "no new nuke plant" as long as CWIP exists,” Missouri News (June 29, 2008).
18. See: “Customers to Bear Financial Risks of New N-Plants under Duke Plan,” NC Warn (Oct. 11, 2006).
19. See: “Georgia Power Asks Regulators to Approve Nuclear Power Units,” Power Engineering (Aug. 1, 2008)
20. See: Eugene E. Dallaire, “Will Nuclear Power Survive in New England” Civil Engineering—ASCE , Vol. 51, No. 2, February 1981, pp. 61-63
21. See: “Nuclear Energy in California” website: www.energy.ca.gov/nuclear/california.html.
22. See: Christopher Palmeri and Adam Aston “Power Surge,” Business Week (July 24, 2008)
23. To provide context, 16 GW is the equivalent of operating approximately 50,000 wind plants of 1 MW each with an aggressive capacity factor of 33 percent designed to meet the 16 GW of demand and an additional 34 GW of capacity to provide the minimum storage requirements when the capacity factor falls below 100 percent (a huge amount of storage capacity that does not currently exist anywhere in the world). Even with a capacity of 34 GW, the energy storage capacity would not be sufficient if wind resources were inadequate for two or more days; a scenario with a 100-percent probability for any given month. It should be noted this is an