Here's another interesting article on Nukes which contains information I wasn't aware of. It seems that building nukes relies very heavily on government loan guarantees, similar to the loans we just gave the Big 3, which everyone called a bailout. Whereas, the renewables industry got $56B in private capital investment in 2006. So it seems the free markets are indisputably showing a preference for renewables over nukes, which means they believe there's more and faster return on investment relative to the risks. Food for thought. What's your take on that?
sciam.com
The U.S. Department of Energy (DoE), for its part, puts the average cost of a new nuclear power plant at $7 billion—which is more than one quarter of the average stock market value of all public energy companies that currently own a nuclear power plant. "Twenty-five-billion-[dollar] average market capitalization companies cannot underwrite many nuclear plants," noted Dennis Spurgeon, assistant secretary for nuclear energy at the DoE in a speech this past July.
Hence the loan guarantees, which will allow utilities to obtain preferable rates on any loans because of the backing of the U.S. government, says Duke Energy's Bryan Dolan, vice president of nuclear development. "It lowers the cost of capital and therefore enables owners to deliver to ratepayers at a lower rate." Although, he adds, "they are not critical for us to move forward."
Nevertheless, utilities like Duke applied for $122 billion worth of them, according to the DoE. Under the current program, the department has only $18.5 billion to offer. In addition, the 2005 Energy Policy Act provides 1.8 cents per kWh of electric power derived from new nuclear reactors.
"It's the only way the plants can be financed, that is at the taxpayer's expense," says Amory Lovins, an energy expert at the Rocky Mountain Institute. "In 2006 distributed renewables alone got $56 billion of private risk capital. Nuclear got, as usual, zero. What part of this do people who take markets seriously not understand?"
"The only people in the world who buy nuclear power plants are central planners, whether they are in governments like China or Japan or TVA, which is an unaccountable public utility," Lovins adds. And, at this point, only one out of the 26 proposed new reactors are being built in areas with deregulated electricity markets; utilities prefer to build them in still regulated areas where they can be guaranteed to recover the cost of construction eventually from ratepayers—much as Progress Energy is doing in Florida right now.
"At this point, having had subsidies for 50 years, they ought to be able to stand on their own two feet," says David Doniger, policy director of the climate center at the Natural Resources Defense Council, an environmental group. But, he adds, "we don't have a rigid antinuke position." And a Congressional staffer who declined to be identified noted: "If nuclear can compete on an even playing field with all the other carbon-free energy out there like wind and solar, then that's what they should do. They keep on coming back with hat in hand asking for tens of billions in subsidies with no plants being built, mostly because Wall Street and private investors want nothing to do with it." |
