Avoid subsidies as incentive
The promise of nuclear energy is like the horizon, it recedes as it is approached. Proposals to move rapidly from fossil energy for electric power generation to low and no carbon power are predicated on a resurgence of the nuclear option and renewables becoming commercially competitive. It is hard to see either happening any time soon.
EIA projects 10 new nuclear facilities between now and 2030; others pushing cap-and-trade legislation are even more optimistic. Achieving even the most moderate goal seems out of reach. Since early in this decade, it has been clear that the demand for electric power was going to be significant and that meeting that demand while reducing carbon dioxide emissions would require additional emphasis on nuclear. Success in moving in that direction has been slow at best.
Today, nuclear energy is somewhere between 25 and 50 percent more expensive than conventional electric power. With demand currently falling and the prospects for robust economic recovery slight, there are no incentives for private firms to step up investments in nuclear power. The nuclear power industry is calling for very large subsidies ($100 billion) to make the contributions assumed in the House climate bill and the proposed Kerry-Boxer legislation. This call for is on top of the large subsidies already provided by Congress.
If the private sector can not provide or obtain from capital markets the funds needed to expand nuclear power, market forces are sending a strong signal about its prospects. And, it is not a positive one. Loan guarantees are a slippery slope as recent history demonstrates.
The current state of play is unfortunate because we should be aggressively pursuing nuclear power to meet a larger proportion of our electric power needs which are expected to increase between 26 and 36 percent by 2030. Cost is just one barrier; permitting delays. Public resistance remains high as does the risk of litigation. And, even if these obstacles went away, what would happen to nuclear waste? Waste disposal has been studied to death and yet the government dithers instead of acting.
The French provide most of their electricity from nuclear power. They pursue nuclear power as national policy and use standardized designs. We lack both. Congress and the Administration could change this situation but it would take political courage and leadership, qualities that are not in large supply in Washington. While I support actions that would spur greater investment in nuclear, I do not support extensive subsidization. A few years ago, draft energy legislation would have provided limited loan guarantees to jump start investment in new nuclear facilities. That led to a lobbying frenzy that expanded loan guarantees unreasonably. Climate legislation is already too infected by rent seekers. Enough is enough.
Posted by: opusdpenguin | October 31, 2009 8:08 PM
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Posted by: Mugwamp | October 31, 2009 10:55 AM
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