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Finance – Single Largest Snag in US N-Industry Growth: NEI

downloadThe Nuclear Energy Institute (NEI) of the United States, an industry body, has drawn up a package of policy initiatives to facilitate the expansion of the country’s nuclear energy industry. The group says that federal policy in a number of areas, particularly financing, is required for such an expansion.

The NEI says that independent analyses conclude that a major expansion in the USA’s use of nuclear energy is needed over the next 30-50 years in order to meet future electricity demand while reducing greenhouse gas emissions. The Waxman-Markey climate bill passed by the House of Representatives last June and the Senate climate legislation unveiled in recent weeks both call for an 83% cut in greenhouse gas emissions by 2050.

The US Environmental Protection Agency determined in its evaluation of the Waxman-Markey bill that under the core policy scenario to reduce emissions, nuclear power generation would increase 150 percent – the equivalent of 187 new reactors – by 2050. Meanwhile, the Electric Power Research Institute concluded this year that the potential exists for the electric sector to achieve a 41 percent reduction in carbon dioxide emissions from 2005 by 2030 using a full portfolio of technologies that include 46 new reactors. Similarly, the Department of Energy’s Energy Information Administration, in its analysis of Waxman-Markey, determined that the basic scenario projects that the USA would need nearly 70 new reactors (totalling 96,000 MW of new generating capacity) by 2030.

The NEI said, “A program to expand reliance on nuclear energy to meet US climate change goals, even if it only approaches this scale, will require a sustained partnership between federal and state governments and the private sector, including additional support from the federal government.”

Financing, the NEI says, is “the single largest challenge to accelerated deployment of new nuclear power plants. The financing challenge is structural.” It added that the cost of new nuclear power reactors – some $6 to $8 billion each – is very high, especially for the utilities proposing to build them, which are “relatively small companies.” The NEI said that these companies “do not have the size, financing capability or financial strength to finance power projects of this scale on their own, in the numbers required.”

The current loan guarantee program of $18.5 billion is “clearly inadequate”, the NEI said, adding that a program of at least $100 billion is required for clean energy technologies, including nuclear. It called new plant financing arrangements, principally through the creation of a Clean Energy Deployment Administration that would function as a permanent financing platform. It also called for tax incentives for nuclear energy manufacturing and production facilities, as well as a streamlined licensing process for new reactors. The NEI also called for legislation to support the development of voluntary used fuel interim storage facilities.

Marvin Fertel, NEI’s president and CEO, said: “If you want to address climate change and produce electricity, nuclear energy has got to be a significant part of the equation.” He added, “Inclusion of a meaningful nuclear energy title by itself doesn’t get you to an agreement in Congress on climate change legislation. But at the same time, you can’t get there without it.”

Responding to the NEI’s proposals, Energy Secretary Steven Chu was quoted as saying that the Obama administration is “looking at all the things that are within our control to actually restart the nuclear industry.” He said, “I would say that in order to really restart in a serious way you might want more than just three or four (new nuclear plants) in order to get it going.”