U.S. nuclear revival gathers pace; Federal loan guarantees aim to prod skeptical firms to build reactors The International Herald Tribune December 24, 2009 Thursday
MATTHEW L. WALD
ABSTRACT
Thirty years after the American nuclear industry abandoned scores of half-built plants because of soaring costs and operating problems, the pendulum may be swinging back as the country moves toward reining in carbon dioxide emissions linked to global warming.
FULL TEXT
When experts on the U.S. power grid asked themselves recently what a cleaner energy future might look like, seven of eight regional councils imagined how their systems would work with 10 percent wind power.
Only one, representing the southeastern United States, chose a radically different option: doubling nuclear power capacity.
Thirty years after the American nuclear industry abandoned scores of half-built plants because of soaring costs and operating problems like the Three Mile Island meltdown, skepticism persists that the technology is worth investing in.
Yet the pendulum may be swinging back. The 104 plants now running have sharply raised their capacity, emboldening utilities across the country to make a case for building new ones.
And the industry is about to get a big boost. In the next few days, the U.S. Department of Energy is to announce the first of $18.5 billion in loan guarantees for building new reactors.
The guarantees were authorized by a bill passed by Congress in 2005. It took four years for the Department of Energy to set up a system to evaluate applications.
The money will flow amid a credit crunch and intense jockeying among the nation's wind, solar, geothermal and nuclear sectors. Each is trying to cast itself as an ideal ''clean'' energy option as the United States moves toward reining in the carbon dioxide emissions linked to climate change.
All of these sources could potentially benefit under a cap-and-trade system that is being considered in Congress as part of climate change legislation. Such a system would set a ceiling on carbon dioxide emissions and allow trading of pollution permits, handicapping the carbon-intensive coal and natural gas sectors.
Historically, Republicans have been more enthusiastic about nuclear power than Democrats have. So as the climate bill winds its way through the Senate, some Democratic members are seeking to add new help for the nuclear industry, including more loan guarantees, to attract enough votes.
Some of the foremost congressional climate change campaigners are unenthusiastic.
Representative Edward Markey, a Massachusetts Democrat who has hounded the nuclear industry for decades over safety questions and cosponsored the House bill, does not favor direct aid to the nuclear industry. He argues that a cap-and-trade system would give the nuclear sector the only lift it deserves.
If that system comes into effect, he said, nuclear power ''will be able to compete more effectively in a new marketplace. How effectively they can compete is going to be the question.''
Others see combining a cap-and-trade system with a nuclear aid package as a sensible tactic to get Congress to address environmental problems.
''One can argue it certainly is bringing about an unusual marriage of interests here,'' said Philip R. Sharp, an Indiana Democrat who served in the House of Representatives from 1975 to 1995 and led a House committee overseeing the electric system.
''It is one of the potential paths for actually getting real action and real legislation, '' said Mr. Sharp, who now heads the nonpartisan group Resources for the Future.
Economic issues have helped scramble alliances on the state and local level, too. Because new reactors create so many jobs and big tax receipts, the Democratic governors of Maryland and Ohio are working hard to get them built in their states.
State legislatures from Louisiana to South Dakota and local governments from Port Gibson, Mississippi, to Oswego, New York, are also on record favoring new reactors.
Peter A. Bradford, a former member of the Nuclear Regulatory Commission who is now vice chairman of the Union of Concerned Scientists, questions the wisdom of direct aid to the industry.
Unlike cap and trade, in which industries buy and sell the right to emit in a market-oriented system, he said, the loan guarantees finance projects that the private sector deems too risky.
The government would be ''picking some winners and bestowing a lot of taxpayer support on them,'' he said.
By Mr. Bradford's count, of 28 reactors that the Nuclear Regulatory Commission now lists as planned, half have had major delays or major increases in estimated cost or have been canceled.
If new plants built with government guarantees prove a commercial success, the program costs taxpayers nothing; if they prove too expensive to finish or are completed but cannot earn enough to repay the loans, the taxpayer is on the hook.
Complicating the challenge, the forthcoming loan guarantees amount to only $18.5 billion, and the nuclear industry says it needs tens of billions more.
Steven Chu, the U.S. secretary of energy, acknowledged that the sum was small. He said it could finance at most perhaps one plant per each new reactor design, making it hard to determine which design is most viable.
''If I were a power company, maybe one of each would not be helpful,'' he said. He suggested that the nuclear industry would need to build two or three of each.
But Dr. Chu insists that nuclear power will be an important piece of any climate solution.
''We have a dormant nuclear industry,'' he said. ''We have to start it up in a way that gives the people who are going to make investments the confidence that this is economically viable.''
Mindful of the challenges posed by climate change, some environmentalists are cautiously evaluating their positions on nuclear power.
''There is an increasing number of people who have spent their lives as environmental advocates who believe that carbon is such an urgent problem that they have to rethink their skepticism about nuclear power,'' said Jonathan Lash, the president of the World Resources Institute, who puts himself in that category.
''But there are many people who are passionate environmentalists who are also passionate opponents of nuclear power, and remain so,'' he said.
LOAD-DATE: December 23, 2009
