U.S. Backs Loans for Nuclear Plants
President Obama announced $8.3 billion in federal loan guarantees Tuesday to help finance the first new nuclear reactors in the U.S. in nearly three decades, stoking hopes in the industry that a nuclear renaissance will take hold.
The guarantees will help fund two reactors in eastern Georgia which, if licensed and built, could begin running in 2016 and 2017, supplying electricity to 1.4 million people.
More money is coming. The Department of Energy has $18 billion to dole out, and Obama, in his 2011 budget, asked that the number be tripled to $54.5 billion, enough to help fund six to 10 reactors. Obama says more nuclear power, which doesn't emit greenhouse gases and produces 20 percent of the nation's electricity, is needed for the U.S. to meet greenhouse gas emission goals and keep pace with others, such as China, Japan and France, which are investing heavily in nuclear.
New construction in the U.S. nuclear industry stopped after the Three Mile Island accident in 1979. But Energy Secretary Steven Chu said that the U.S. pioneered nuclear energy and has sat on the sidelines for too long.
"It's time to take the lead once again," he said.
The government's financial support makes a nuclear revival "absolutely more real," says Mujid Kazimi, professor of nuclear engineering at the Massachusetts Institute of Technology. If Congress approves more money, "many more will go ahead," he says.
Nuclear opponents say new nuclear plants cost too much - the two in Georgia will run about $14 billion - are a risky bet. "This is a huge bailout for a dirty industry," says Benjamin Schreiber of Friends of the Earth.
Opponents also say that federal subsidies should be reserved for new industries. Nuclear "should be able to stand on its own feet," says Arjun Makhijani, president of the Institute for Energy and Environmental Research. He fears a repeat of the 1970s and early 1980s, when the industry overstated power demands and underestimated costs, resulting in dozens of canceled plants.
Of 26 new nuclear reactor license applications submitted to the Nuclear Regulatory Commission since 2007, 19 have been delayed or canceled , says Mark Cooper, senior fellow at the Institute for Energy and the Environment at Vermont Law School. "The technologies aren't ready for prime time, and the economics aren't there," he says.
The Georgia reactors need approval from federal regulators. David Ratcliffe, CEO of Southern Company, one of the plant's owners, says the loan guarantees will "pave the way for the industry" to expand.