Nuclear power industry is profitable only because Government picks up so much of the costs.

JohnWxy

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Wed Dec-27-06 04:07 PM
Original message

Nuclear power industry is profitable only because Government picks up so much of the costs.

Edited on Wed Dec-27-06 04:22 PM by JohnWxy

The nuclear power industry has still to build a successful commercial demonstration nuclear power plant because this power source would not be profitable without generous government subsidies.

This is supposed to be a mature industry (they've been trying to make it work for 40 yrs) yet they still need billions of dollars of public funds to prop them up. Without the supportof public moneys the cost of nuclear energy would be beyond what anybody would be willing to pay. Even WITH public support it is still more expensive than other sources of electric power.

Here are a few notes on the latest energy bill which included liberal public help for nuclear power industry.
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Nuclear Giveaways in the Energy Bill Conference Report

For a PDF version of this document, click here:
http://www.citizen.org/cmep/energy_enviro_nuclear/electricity/energybill/2005/articles.cfm?ID=13779

The energy bill conference report (H.R.6, �The Energy Policy Act of 2005�) negotiated between House and Senate conferees contains more than $13 billion in cradle-to-grave subsidies and tax breaks, as well as unlimited taxpayer-backed loan guarantees, limited liability in the case of an accident, and other incentives to the mature nuclear industry to build new nuclear reactors.
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Construction subsidies = $3.25 billion +

Authorization of $2 billion in �risk insurance� to pay the industry for any delays in construction and operation licensing for 6 new reactors, including delays due to the Nuclear Regulatory Commission or litigation. The payments would include interest on loans and the difference between the market price and the contractual price of power

Authorization of more than $1.25 billion from FY2006 to FY2015 and �such sums as are necessary� from FY2016 to FY2021 for a nuclear plant in Idaho to generate hydrogen fuel, a boondoggle that would make a mockery of clean energy goals

Exemption of construction and operation license applications for new nuclear reactors from an NRC antitrust review

Unlimited taxpayer-backed loan guarantees for up to 80% of the cost of a project, including building new nuclear power plants. Authorizes �such sums as are necessary,� but if Congress were to appropriate funding for loan guarantees covering six nuclear reactors, this subsidy could potentially cost taxpayers approximately $6 billion (assuming a 50% default rate and construction cost per plant of $2.5 billion, as Congressional Budget Office has estimated)
Operating subsidies = $5.7 billion +

Reauthorization of the Price-Anderson Act, extending the industry�s liability cap to cover new nuclear power plants built in the next 20 years

Incentives for �modular� reactor designs (such as the pebble bed reactor, which has never been built anywhere in the world) by allowing a combination of smaller reactors to be considered one unit, thus lowering the amount that the nuclear operator is responsible to pay under Price-Anderson

Weakens constraints on U.S. exports of bomb-grade uranium

Production tax credits of 1.8-cent for each kilowatt-hour of nuclear-generated electricity from new reactors during the first 8 years of operation for the nuclear industry, costing $5.7 billion in revenue losses to the U.S. Treasury through 2025. Considered one of the most important subsidies by the nuclear industry

Shut-down subsidies = $1.3 billion

Changes the rules for nuclear decommissioning funds that are to be used to clean up closed nuclear plant sites by repealing the cost of service requirement for contributions to a fund and allowing the transfer of pre-1984 decommissioning costs to a qualified fund, costing taxpayers $1.3 billion
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This of course is only looking at cost issues. This does not even address the serious question of whether it's possible to store nuclear waste for tens of thusands of years and can we actually find places to store all the waste generated by hundreds or thousands of new nukes.

As I said they still haven't had a commercial demonstration nuclear power plant. What the nuclear industry does is transfer much of the costs to the Government (you and me) and then say it's profitable (by excluding millions of dollars of costs from the calculation).

For a realistic evaluation of nuclear power costs we need to consider ALL the costs involved including the costs picked up by the Government.

from Diane Faistein's statement opposing subsidies to nuclear power:
http://feinstein.senate.gov/03Releases/r-nuclear.htm

"In the past 50 years, California has licensed five nuclear power plants and one experimental reactor. Today, just two of these nuclear power plants are still operating in the State. The plant at San Onofre (operating at diminished capacity) and Diablo Canyon nuclear power plants provide 4,400 megawatts of power in California - close to a fifth of California's energy supply.

Impressive as these numbers may be in terms of the power-generating capacity of nuclear energy, they tell only part of the story of California's experiment with nuclear power. Of six nuclear power plants built in California, four have been decommissioned due to high operating costs and excessive risk:

In the late 1950s, an experimental reactor at the Rocketdyne site in Ventura County was shut down after a severe meltdown.

In 1967, the Vallecitos plant closed its doors after 10 years of operating because its owner, General Electric, was unable to obtain accident insurance due to the high risk of operating a nuclear power plant.

In 1976, the plant at Humboldt Bay shut its doors after 13 years of operation as a result of the discovery of a fault line near the plant that would have required millions of dollars in seismic retrofits.

And in 1989, the Rancho Seco plant near Sacramento was closed by public referendum after 14 years of operation plagued by mismanagement that resulted in cost overruns.

Nuclear power is expensive and risky, yet I believe that if private investors are not willing to put their own money on the line to support new nuclear plants, then the Federal government should not put taxpayers' money at risk either. However, under the nuclear subsidy provision in this Energy Bill, taxpayers would be required to subsidize up to 50 percent of construction costs of new nuclear plants - costs that the Congressional Research Service (CRS) estimates to be in the range of $14-16 billion dollars. CRS also estimates that the risk of default on these loan guarantees to be "very high - well above 50 percent."

I strongly believe it is NOT in the public interest for our nation to subsidize costly nuclear plants. Instead we should devote more resources to the development of renewable energy.

Mr. President, I strongly believe that we should be doing more to encourage the development of renewable power like solar, wind, geothermal, and biomass, instead of providing subsidies to an industry that has not built a new power plant since the 1970s. Unfortunately this energy bill currently has an over-reliance on promoting traditional energy resources, such as nuclear power.
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