MinnPost: Monetary roadblocks lessen nuclear prospects

Over at MinnPost, Ron Way looks at the costs of creating new nuclear power plants in Monetary roadblocks lessen nuclear prospects. The lead paragraphs:

As Gov. Tim Pawlenty and a gaggle of DFL and Republican legislators press for nuclear-power development by initially removing Minnesota's ban on the controversial plants, a respected investment analyst has issued a sobering report on skyrocketing costs and sinking prospects of building nuclear generators.   

In fact, it appears to many observers that the only way to advance nuclear power in the United States is to sharply increase government subsidies to an industry that's already far ahead of other electric-generating forms in receiving direct and indirect taxpayer support. 

According to recent estimates, building a new nuclear plant is nearly four times more expensive than installing wind turbines and 2.5 times higher than coal-fired plants yielding equivalent electricity. And while uranium fuel for nuclear plants is inexpensive relative to coal and gas, wind has zero fuel costs.

The article concludes:

The U.S. Government Accounting Office (GAO) issued a report last October that summarized subsidies for major electrical-production sectors; it said (PDF):

• Of $11.5 billion in energy research support, nuclear power received $6.2 billion, fossil fuels (coal and natural gas) received $3.2 billion, and renewables (wind and solar) got $1.4 billion.

• For direct subsidies over the same period, fossil fuels (coal and gas) received the lion's share at $13.7 billion, renewables (wind and solar) got $2.8 billion, and nuclear received nothing because a production tax credit for new facilities did not take effect since no new plants were built. However, nuclear plants did benefit from the Price-Anderson liability limitation The Price-Anderson Nuclear Industries Indemnity Act in the event of an accident, something that analysts say is worth hundreds of millions of dollars per year in saved insurance costs. (In fact, without he liability protection that was enacted in 1957, the nuclear power industry likely would not exist in the U.S.)

As they push nuclear power, neither McCain nor Pawlenty — nor other advocates, for that matter — discuss whether they would favor increasing government subsidies for the energy source. But without subsidy support, observers say it's unlikely that Wall Street financing will be readily available.

In the First, Congressman Walz favors keeping nuclear power in the mix, as does Dick Day. GOP endorsed candidate Brian Davis favors promoting nuclear power, but cutting off subsidies for wind, asserting that renewable energy must live or die by the market. Somehow, Davis has managed to overlook the public inventment that would help underwrite new nuclear power plants.

Moreover, the industry has tried to get legislation passed that would remove congressional budget oversight from federal loan guarantee programs. According to the Hill, industry analysts have estimated that "nuclear utilities would need $50 billion in loan guarantees in the next two years."

In June, Frank Bowman, head of the Nuclear Energy Institute, called for additional government support in an op-ed piece published in the New York Post. Since investors are reluctant to support the industry without public subsidies (and Davis doesn't like subsidies), we're curious how an extreme free market kind of guy comes to advocate atomic power--while dissing wind, solar and biofuels for their slice of the public investment pie.

Bowman's column demonstrates how the fortunes of the nuclear power industry have been revived in part because it generates few greenhouse gases that contribute to global warming. Davis himself won't be making that case for atomic power, since he doesn't believe any energy policy should be based on the notion of human-create climate change. Other than as a nostalgic look back to his undergraduate years and  eight-month post-college career as a nuclear engineer, why is Davis touting a form of energy heavily dependent on government support?
 

Comments

[MinnesotaCentral]

Very informative post ... thanks for educating your readers.

I believe that you should also give credit to Senator Norm Coleman who likes to taunt that 78 percent of the electricity generated In France is from nuclear power. (This is a manipulation of wording used as the 78% is misleading ... more on that later.) And
Senator Coleman is fond of saying, “the French are not braver than we are”. Senator Coleman has proposed legislation that would implement a tax credit and loan guarantee system for nuclear production.

Not only should the taxpayers be concerned, but rateholders also. In a commentary last week, I pointed out that it is not uncommon for an electric utility to be able to collect an increased rate while the project is in process ... which could be for years.

The one question that every proponent of nuclear should tell Minnesotans is "Since John McCain wants 45 to 100 new nuclear plants, which communities in Minnesota do you envision getting those facilities?"
That cannot be serious about spending our money without being able to tell us who will be affected.