Posted on 10/12/2010 8:02:30 AM PDT by BigBobber
Constellation Energy has pulled out of negotiations on a $7.5 billion federal loan guarantee to build a nuclear reactor in Maryland with its French partner Electricite de France (EDF).
In an Oct. 8 letter to Dan Poneman, deputy secretary of the U.S. Department of Energy, Constellation Energy said the “significant and ongoing uncertainty created by the Office of Management and Budget’s inability to address significant problems with its methodology for determining the projects credit subsidy cost and the unreasonable burdensome conditions a loan guarantee would require” is why Constellation Energy does not see a “timely path” to reach a set of working terms and conditions to build Calvert Cliff #3 in an economically reasonable and statutorily justifiable manner.
The statement also said that the high estimate of the credit subsidy would force Constellation and its partners to pay the U.S. Treasury 11.6 percent, or $880 million, in order to obtain the loan guarantee.
“Such a sum would clearly destroy the project’s economics (or the economics for any nuclear project for that matter) and was dramatically out of line with both our own and independent assessments of what the figure should reasonably be,” the statement read.
...
With Constellation now backing out of the project, EDF’s ambitions to help lead a nuclear renaissance in the U.S. have all but stopped completely. Constellation did say that the next steps in the loan guarantee process are for EDF to determine.
“This issue of the loan guarantees has to get solved soon. We have to understand what the government’s role is going to be in that,” said Danny Roderick, GE Hitachi Nuclear Energy's senior vice president for new plant projects, whom I also interviewed for the Nuclear Power roundtable.
(Excerpt) Read more at powergenworldwide.com ...
I am all for nuclear power, but it is a highly government subsidized industry according to some information I have read:
No Corporate Welfare for Nuclear Power
http://www.cato.org/pub_display.php?pub_id=3134
I have had a lot of experience on the projects to dispose of nuclear waste, such as the Yucca project, but I am no expert on the economics of nuclear power. I am really concerned that 0dumbo and Reid have killed the Yucca Mountain project which I consider to be safe.
Ministry of Plenty bookmark.
I worked for Ston&Webster Eng. for a number of years, working on balance of plant designs for reactors that were never built.
I see this as a common liberal government tactic: make a show of favoring nuclear power, oil drilling, mining, etc. but then allow the regulating agencies to kill any actual project. It’s win-win for those politicians. At least until the people become better informed.
Your link (see text below) lists three items as show stoppers for the nuclear industry. #1 is the insurance. That has not cost the taxpayers a single penney. In fact, utilities have poured millions into the fund which is held by the government. #2 is the federal disposal of waste. That has not cost the taxpayers a single penney. In fact, utilities have poured millions into the fund which is held by the government. #3 is ‘greasing the skids’. This is NOT funding and the use of the term ‘greasing the skids’ is indicative that the author has a gripe with the nuclear industry and his emotions are clouding the facts.
In fact, a recent report by Scully Capital Services, an investment banking and financial services firm, commissioned by the Department of Energy (DOE), highlighted three federal subsidies and regulations — termed “show stoppers” — without which the industry would grind to a halt. These “show stoppers” include the Price Anderson Act, which limits the liability of the nuclear industry in case of a serious nuclear accident — leaving taxpayers on the hook for potentially hundreds of billions in compensation costs; federal disposal of nuclear waste in a permanent repository, which will save the industry billions at taxpayer expense; and licensing regulations, wherein the report recommends that the Nuclear Regulatory Commission further grease the skids of its quasi-judicial licensing process to preclude successful interventions from opponents.
Yes, the industry is hamstrung by all the laws put in place by envirowackos. I have never been involved in the licensing process, but I worked on a project near a new nuke plant in the 80’s that was being licensed and I used a lot of the data they compiled for my work. It is incredible the amount of money the plant had to spend on the studies to satisfy the NRC.
One thing I have read about nuke economics was very interesting to me. In the book “Gusher of Lies”, Robert Bryce, 2008, he has a chapter that discusses a nuke plant outside of Austin, TX that was plagued by cost overuns and was deemed economically bad. UNTIL, the price of natural gas spiked and it suddenly became the cheapest source of power in the region. This will happen all over the USA eventually, so we need to start building nukes now. If you are interested, Google books has “Gusher of Lies” on the web, but I am not sure the chapter on nukes is allowed in the preview.
“#2 is the federal disposal of waste. That has not cost the taxpayers a single penney. “
Correct me if I am wrong, but $10 billion in tax dollars has been spent on the characterization of Yucca Mountain, before that idiot Reid killed it.
I am all for nukes and say build, build build. But, I would like to see the industry stand on its own economically. I believe there will come a time when the economics will look very good for nukes. I spent many years in the oil exploration business and I do believe in peak oil.
Your statement is wrong. The Nuclear Waste Policy Act established a fund which was paid for by a tax on every kwhr of nuclear-generated electricity. It was paid for by consumers, not taxpayer dollars.
Thanks for the correction. Same difference as I see it. It may not have been a “tax”, but the consumer still took it in the pocket book. I am wondering if the consumer is going to get a refund now that Yucca Mountain has been killed? I keep waiting to see where they are planning on storing the waste now. I assume the consumer is still being required to pay for waste storage even though the process is stalled? When that moron Reid and Odumbo killed Yucca, they should have rescinded the required funding for it.
There is a larger Constitutional issue in play with YM. The law is on the books (the NWPA) that there will be one national repository, and YM is it. That has not been changed or rescinded. DOE decided on their own that they would abrogate that law. In my layman's opinion, that is unconstitutional. The Executive Branch cannot assume authority that allows it to override the will of Congress. The Executive's function is to carry out the mandate from Congress. It cannot assume a legislative function, as that violates the Separation clause.
We need to start reprocessing the waste rather than just storing it.
You stand corrected.
Possibly, if the economics warrant it. I say this because there is still plenty of uranium left in the ground since the uranium mining industry folded in the USA. I assume at some point in time when mines become depleted or uneconomic we will need to reprocess.
Regarding reprocessing, while you may store the waste in a repository you can still pull it out again to reprocess it. The advantage, presumably, of having it in a centralized repository is to protect it from terrorists as well as the environment. It would take many years to fill a repository and the disposal would not be finalized by sealing it, I assume, until a decision was made to reprocess or not. But, if the government and envirowackos are in the loop, I have small hope it will be a decision based on science.
"SAME DIFFERENCE"? Not at all. First you were complaining about taxpayers subsidizing the nuclear industry. Now you are pointing out how the nuclear industry is subsidizing the government! Exact polar opposite.
“the nuclear industry is subsidizing the government”
With consumer/taxpayer dollars. The nuclear industry is just the middle man in the transaction.
What was it Obama said about anyone who wanted to start an energy plant other than nuclear?.
Me: “the nuclear industry is subsidizing the government”
You: With consumer/taxpayer dollars. The nuclear industry is just the middle man in the transaction.
The consumer always pays. That is capitalism.
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