The saying ‘one swallow doesn’t make a summer’ warns us against getting too excited about something simply because the early signs look good. And so it is with President Obama’s announcement this week that his government is to give loan guarantees worth $8 billion to the nuclear industry so it can build two new nuclear reactors. One loan guarantee doesn’t make a nuclear ‘renaissance’.
People forget that the US nuclear industry is in complete disarray. As Time magazine points out…
Despite the prospect of new taxpayer guarantees — and the cradle-to-grave subsidies that already promote this 50-year-old industry at the federal and state level — utilities keep scrapping or delaying plans for new reactors… Peter Bradford, a former member of the Nuclear Regulatory Commission, has calculated that of the 26 new applications submitted to the NRC since 2007, nine have been cancelled or suspended indefinitely, and ten more have been delayed by one to five years. Utilities like Exelon, Duke Energy and FPL have ditched or scaled back their nuclear ambitions.
Many people who support nuclear energy are able to see past the serious issues of nuclear safety (or lack of it), the waste we don’t have a clue what to do with, the inherent unreliability of such complex machines as nuclear reactors, and the fact that nuclear power can at best make only a small dent in greenhouse gas emissions. President Obama himself could certainly have been wearing blinkers with AREVA corporate logos on them this week. He talks of ‘safe’ nuclear power like it exists. If he talked of unicorns in the same tone of voice they’d impeach him.
But even if you can accommodate those huge failings into your pro-nuclear argument, the terrible economics of nuclear energy remain a deal-breaker. Back to Time…
[N]uclear costs keep spiraling out of control; last year, the estimates for several reactors doubled, and for one Pennsylvania reactor more than tripled. This is why credit rating agencies keep downgrading utilities with nuclear ambitions, which increases their borrowing costs and makes their projects even more expensive. Even with the federal guarantees, the new reactors at Vogtle are expected to boost local electricity bills by 9% — and like most nuke-friendly states, Georgia has enacted a law ensuring that ratepayers won't get their money back if the utility fails to complete the plant.
This isn’t a just a feature of the nuclear industry in the US. It is a story repeated all over the world where plans to build new reactors are drawn up. Ask Canada, ask Turkey, ask Bulgaria, ask Finland.
So President Obama can throw huge amounts of cash at the nuclear industry, some of it might even work and a few reactors might get built. But it’s too little, too late. By the time his money is helping the nuclear industry (if it does), the vital opportunity to fully embrace renewable energy and energy efficiency will have been missed.