Nuclear cost increases warrant sober second thoughts
I acknowledge that nuclear power has to play a role in our battle against climate change, with the caveat that we exhaust all other reasonable, low-emission alternatives and maximize efficiency and conservation. The industry will have its hands full just trying to replace the megawatts lost as older plants are decommissioned or refurbished. This leaves open the question, in the current market environment, of how much *new* nuclear is likely to be built over the coming decade. My Clean Break column today looks at how the rising cost of building nuclear plants could affect its competitiveness with other alternatives, even excluding some of the environmental question marks like waste management uncertainty and plant safety.
In the Ontario context, the power planning agency has dramatically underestimated the cost of building new nukes, and while one could still argue that even at the higher price it’s still worth pursuing, that case needs to be made before we head down a path that at some point becomes irreversible.
Another point, which I didn’t mention in the column, has to do with loan guarantees. The U.S. Department of Energy, for example, has received 19 applications from 17 electric-power companies asking for loan guarantees totalling $122 billion (U.S.), which would backstop construction of 14 new nuclear plants (21 new reactors).
In this market, other forms of emission-free power generation should be given equal treatment. Why should the nuke builders get such massive loan guarantees while a wind, solar or geothermal developer trying to raise debt capital in a difficult market doesn’t?