Jan 8, 2010
A combination of financing setbacks and waning of public demand is likely to put U.S. nuclear energy plans on hold, experts said Wednesday.
Mark Cooper, senior fellow for economic analysis at the Institute for Energy and the Environment at Vermont Law School; Stephen Thomas, professor of energy studies at University of Greenwich, London; and Dr. Arjun Makhijani, president, Institute for Energy and Environmental Research held a press conference last month discussing the challenges facing the nuclear sector.
They pointed to three recent developments that may have negative bearing on the advancement of the industry.
Rising Costs
The recent price hike for two proposed reactors in San Antonio, Texas that would cost $4 billion more than expected has prompted local lawmakers to backpedal on issuing bonds to further the project.
Part of the problem, said Makhijani, is that the projected costs were unrealistically low to begin with. “In March 2008, I estimated costs two to almost three times higher than those advertized by NRG, the project's developer; and my estimates are the projected costs today, even if there are no delays and other problems,” he said. “In the late 1970s and early 1980s, the industry consistently overstated likely demand and underestimated costs, which resulted in dozens of cancelled plants and huge debts.”
Project-crippling costs have been seen across the country, including in Gaffney, South Carolina; Waynesboro, Georgian; and Victoria, Texas.
Financing Pinch
A November report by Citi Investment Research & Analysis called "New Nuclear—The Economics Say No." claims that in order for nuclear to take off, the government must play a leading role. “Financing guarantees, minimum power prices, and / or government-backed power off-take agreements may all be needed if stations are to be built,” the report read.
The Department of Energy has slated $18.5 billion in loan guarantees are currently authorized and under discussion for new reactors and the American Clean Energy Leadership Act of 2009, which has been passed out of the Energy Committee, authorizes unlimited loan guarantees. However, taxpayer groups say that such loan guarantees could put citizens in financial danger.
“The DOE Loan Guarantee Program is fundamentally flawed,” said Allison Fisher, organizer with Public Citizen’s Energy Program. “The DOE’s lack of control over the prohibitive and uncontrolled cost of new reactors, excessive and unjustified secrecy, and its inability to properly secure the loan guarantees are the ingredients for another industry bailout by taxpayers.”
The U.S. Department of Energy received 19 applications from electric companies for loans to develop nuclear reactors in October.
Safety Concerns
Last month, European safety regulators raised health and safety concerns new U.S. reactors designs the AP1000 and the EPR. The UK’s Health and Safety Executive said in a report, "Among the criticisms raised, experts said there were significant concerns about EPR's proposed architecture, and that improvements were required for 'hazard barriers.' Other issues relating to the reactor's structural integrity were also addressed…”
NRC, the developer of the San Antonio plant, said that the AP1000 reactor might not be able to withstand natural disasters such as hurricanes and earthquakes.
Source: http://www.theepochtimes.com/n2/content/view/27668/
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