Loan guarantee expansion
02 February 2010
There will be a $56.5 billion pot of loan guarantees available to support nuclear power projects after a massive boost from the FY2011 US budget.
An extra $36 billion in guarantees has been proposed, on top of $18.5 billion that was announced with the Energy Policy Act of 2005 and $2 billion that was subsequently added for fuel cycle facilities. The financial support cannot come soon enough for the US nuclear industry, which is still waiting for allocation of the 2005 guarantees.
"Nuclear energy
currently provides
approximately 20% of
the nation's electricity
and 70% of the nation's
clean non-carbon
electricity. Over 100
nuclear power plants
[reactors] are offering
reliable and affordable
baseload electricity in
the USA, and they are
doing so without air
pollution and
greenhouse gas
emissions."
The Department of Energy's
summary of the nuclear sector
|
Loan guarantees are meant to help utilities that want new nuclear reactors obtain private finance, which is the most challenging and costly part of new nuclear build. Provided the US Department of Energy (DoE) has confidence in a project, it can guarantee up to 80% of the total debt. This security should entice more lenders and reduce the cost of the loan for the utility, while costing the DoE only for administration.
US prospects for new build have been hit hard by a combination of a temporary drop in power demand on the global recession and a related drop in gas prices. Several projects have been put on hold until power demand picks back up. Utility heads now say loan guarantees are vital for the economics of new build, but none have yet been announced despite rumours about DoE shortlists.
More welcome news for nuclear in yesterday's proposed US budget was a commitment to continue funding the Next Generation Nuclear Plant (NGNP), which is to be an advanced reactor with co-generation capability at Idaho National Lab. This was originally meant to actually operate in 2010, but its priority has fluctuated. NGNP is part of the 'Reactor Concepts RD&D' program, which will also begin working on small modular reactor concepts with a total budget of $195 million.
All funding for the former Yucca Mountain project has now been officially ended, with the Office of Civilian Radioactive Waste Management wound up and responsibility for meeting the goals of the Nuclear Waste Policy Act of 1982 now passed back to the main Office of Nuclear Energy. The license application submitted to regulators by the Office of Civilian Radioactive Waste Management has also been officially discontinued. The DoE noted: "The administration has determined that developing a repository at Yucca Mountain, Nevada is not a workable option... The nation needs a different solution for nuclear waste disposal." Yesterday a 'Blue Ribbon' commission was named to develop a new strategy and correspondingly the DoE today increased fuel cycle research by 47% to $201 million.
Overall, the DoE is to undergo management changes meant to make it more 'results-oriented'. Changes are to be made across all departments as well as the office of the secretary.
Researched and written
by World Nuclear News