[NYTr] And it's back to Nuke Power (More Plutonium for More Nuke War?)

[All the News That Doesn't Fit]

The Christian Science Monitor - Sep 28, 2007
http://www.csmonitor.com/2007/0928/p01s05-usgn.html

Nuclear power surge coming

In the next 15 months, US regulators expect 
applications for up to 28 new plants.

By Mark Clayton

With this week's application to build a new nuclear plant  the first
such filing in nearly 30 years  the industry says the US is on the
verge of a nuclear power renaissance.

With virtually no greenhouse-gas emissions, reactors are touted as part
of the solution to global warming. Over the next 15 months, the Nuclear
Regulatory Commission expects a tidal wave of similar permit
applications for up to 28 new reactors, costing up to $90 billion to
build.

But the renaissance may be less robust than it looks. Even if the
projects are successful and building proceeds at breakneck speed, the
lead times are so long and costs so high that it's unclear that the US
can build enough nuclear plants to make a dent in greenhouse-gas
emissions by 2050. They're so financially risky, experts say, that the
only reason building plans are under way is that the federal government
has stepped in to guarantee investors against loan defaults.

"Clearly, [nuclear power companies] are not so confident or they
wouldn't want the federal government and taxpayer to be guaranteeing
the loans," says David Schlissel a longtime nuclear industry analyst
with consulting firm Synapse Energy Economics in Cambridge, Mass.

The industry says it needs the aid to get nuclear power rolling again.

"Yes, we need some help and assistance getting these large projects off
the ground," says Paul Genoa of the Nuclear Energy Institute (NEI) in
Washington. "This will always be labeled as subsidies. But one person's
subsidy is another person's incentive. These are the first nuclear power
plants to be built in years and there's a role for government here."

Also, loan guarantees don't affect taxpayers unless those loans are
defaulted on, he points out.

Under the Energy Policy Act of 2005, the industry already is getting an
estimated $12 billion in tax breaks and other largess. The
Price-Anderson Act, a law dating from the 1950s, caps the industry's
liability at about $10 billion in the event of an accident, even though
studies show that a major nuclear meltdown could easily run 50 times
that.

Now, the Senate version of a new energy bill includes a provision that
could provide tens of billions of dollars more in federal-loan
guarantees. On Tuesday, the Energy Department announced it would
provide up to $2 billion in federal risk insurance for the first six
new nuclear-plant projects, protecting them against losses from
regulatory or legal delays.

"In my view, these kinds of taxpayer subsidies are vital to the
industry, and they wouldn't be building any of these new nuclear plants
without them," says Doug Koplow, president of Earth Track, a Cambridge,
Mass., consulting firm that analyzes subsidies for all forms of energy,
including biofuels.

The nuclear industry gets about $9 billion a year in federal subsidies,
he calculates, trailing only oil and coal in federal energy aid. That
amount could go far higher if companies were to begin defaulting on
guaranteed loans, he adds.

The nuclear industry has already put Congress on notice that it could
require loan guarantees of at least $20 billion for planned projects
and more later, NEI officials told The New York Times in July.

The reason is that nuclear power plants are far more expensive to build
than coal- or gas-fired facilities. For example: On Monday, New
Jersey-based NRG Energy Corp. filed its application with the Nuclear
Regulatory Commission to build two reactors in Texas at a cost between
$5.4 and $6.7 billion.

That huge startup cost might make financial sense, given a reactor's low
operating expenses, especially if government begins to charge utilities
for the greenhouse gases they produce. Nuclear power is virtually
emission-free.

But the last time that the nuclear industry was on a building spree  in
the 1980s  roughly half of the power plants proposed were never
finished, in part because of fears caused by the accident at Three Mile
Island. Those that were finished were delayed for years and cost far
more than estimated. A number of power companies went bankrupt. In late
2003, NRG the company that filed Monday's permit application  emerged
from bankruptcy caused by overexpansion in the 1990s.

If defaults occur in the new round, critics worry federal costs will be
huge.

"This is the second or third 'nuclear renaissance' I've seen," says
Tyson Slocum, director of energy program at Public Citizen, Ralph
Nader's consumer-protection group. "When you look at the cost of these
plants and the massive financial subsidies by US taxpayers, I think
that money would be better invested in cheaper sources of
emissions-free power that don't have the fatal flaws nuclear power
does."

In 2003, a Congressional Budget Office analysis warned of potential
default rates of 50 percent or more on new plants.

Wall Street is also skeptical. In a July letter to the Department of
Energy, six investment banks, including Citigroup and Goldman Sachs,
made it clear that federal guarantees were required. "We believe many
new nuclear construction projects will have difficulty accessing the
capital markets during construction and initial operation without the
support of a federal government loan guarantee," they wrote.

The risks might be worth the cost if nuclear power can have a
substantial impact in slowing global warming. But even some industry
experts doubt that's possible. To reduce carbon dioxide emissions by 1
billion tons annually, the level set by some scientists as a goal for
nuclear power, the world would need to build 21 new 1,000-megawatt
nuclear plants per year  about five of those annually in the US  for
the next 50 years, says a Keystone Center report endorsed by the NEI.
The US industry reached that level in the 1980s. But even under its
most optimistic assessment, the Energy Information Administration
recently projected that only about 53 nuclear power plants would be
built by 2056. At that rate, this would not even replace the existing
nuclear capacity expected to be retired during that time, the Keystone
report said.

While such a conclusion would seem to blunt nuclear power's appeal,
industry experts predict that climate legislation is likely to boost the
cost of carbon-dioxide emissions. When it does, nuclear power
construction will be suddenly very competitive with coal power  and
that will accelerate growth faster and farther than predicted, they add.

Nuclear power "clearly can't do it all, but will do its share" to
mitigate greenhouse-gas emissions, says Mr. Genoa.