Nuclear renaissance will take more than loan guarantees

CIGI

Source: CIGI

When the Obama Administration unveiled its proposed $54bn in loan guarantees to encourage the construction of 10 new nuclear reactors and revive the US’ nuclear industry, it underlined the barrier high construction costs have been to the sector.  At a cost of about $5bn a reactor, there have been few companies willing to back such projects.

Particularly with the economic downturn reducing power demand, the credit crisis making it that much harder to get financial assistance, and the drop in competing fuel prices of natural gas.

But there is another barrier. And that is the public. Even as the zero carbon emissions of nuclear have gained a following, fears of accidents and what to do with the waste persist. These concerns were demonstrated this week when the Vermont Senate on Wednesday voted to close an Entergy Corp nuclear power plant when its licence expires in 2012, citing the almost 40-year age of the facility, which has suffered the collapse of a cooling toward, a burst pipe and three leaks.

Entergy had insisted the problems at the plant were minor, with no radioactive leaks outside the facility. It also noted that the 20-year extension it had sought to keep the plant open, once its original 40-year operating licence expired in two years, is routine, as the US fleet of 103 plants must continue operating without new reactors.

Yet those opposed to nuclear have taken the no-vote and run with it. Paul Burns, executive director of Vermont Public Interest Research Group, had this to say:

Vermont has effectively turned the page from the dirty, dangerous and expensive energy sources of the past toward a truly clean energy future. The Senate reminded us that leadership means standing up for what’s right…It’s time to seize this opportunity. That includes a new energy policy aimed at making the most of renewable, home-grown sources and stepped-up efficiency measures.

While that sounds good on the face of it, nuclear really should not be dismissed in pursuing a clean energy future. There have been no major incidents in the US since the country’s worst commercial nuclear accident at Pennsylvania’s Three Mile Island plant in 1979, which exposed those nearby to low levels of radiation but did not cause any proven health problems.

Yet nuclear provides 20 per cent of the US’ power. With talk of getting off of fossil fuels, which provide most of the rest of the US power, that leaves a whole lot of electricity to depend upon renewables that are still in early stages of development.

Environmentalists do not want the carbon emissions of oil, coal and natural gas. And they do not want to worry about a potential radioactive accident with nuclear. Indeed, the anti-nuclear movement starts television advertisements by Friends of the Earth this week against nuclear in pockets around the US. Here is what the group had to say about its ads:

Nuclear reactors and their radioactive waste are inherently dangerous. They also pose a huge bailout risk for taxpayers. The ads we’re launching today make this case. Most Americans don’t want these reactors in their backyards. The future lies in clean energy sources like wind and solar power and efficiency – not nuclear reactors.

While everyone would love to think of the future powered on ideal energy sources such as wind and solar, the reality is that these power sources require backup generation. As of now, they only account for a few percentage points of US power supply. They are a long way from reaching the scale and level of sophistication required to power the world. The advantages of nuclear will remain attractive for quite some time.

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

Read our farewell note

About the blog

Archive

« Jan Mar »February 2010
M T W T F S S
1234567
891011121314
15161718192021
22232425262728