Construction Costs: A History of Failure
- Proponents of nuclear power in the 1940s and 50s said that it would be a source of energy “too cheap to meter,” but this is an industry historically pock-marked with cost overruns and failed deadlines, loan defaults and managerial disasters. The history of nuclear power is a history of economic collapse and convulsion.
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Government Subsidies and Loan Guarantees: On the Dole from the Get-Go
- Nuclear power has been on the government dole since its inception. Heavily subsidized in the early years (to the tune of billions!) and with substantial continued subsidies up to today, this is a mature, but chronically uncompetitive industry that can’t seem to find its feet.
- The Energy Policy Act of 2005 (EPACT 2005) established a loan guarantee program (Title XVII) nuclear reactors to get 100% taxpayer-backed loans for up to 80% of the cost of their reactor construction.
- Current budget authorizations (FY09) have set aside $18.5 billion in loan guarantees specifically for nuclear projects, which could build an estimated two to three reactors.
- According to the Congressional Budget Office, the default rate on loans for new reactors is “very high well above 50 percent”.
- In states with regulation of the energy sector, the nuclear industry wants access to ratepayer funds before new reactors are even licensed, through Construction Work In Progress laws (CWIP).
- Utilities want to build new nuclear reactors and pass on the expected construction costs directly to the ratepayer whether or not they actually build a new reactor.
New Nuclear Projects: Still Hungry for More Taxpayer and Ratepayer Dollars
- Wall Street has made it plain that it is not interested in investing in the risky business of nuclear energy.
- The nuclear industry will not build new reactors unless taxpayers and ratepayers shoulder the entire financial risk (through loan guarantees, CWIP, and other subsidies).
- With the current global recession, the industry is frantic to find other ways for ratepayers and taxpayers to front the costs of nuclear: whether it is stealing from renewable energy, creating new subsidies, or radically loosening the small protections for taxpayers in the Title XVII program.
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