Antinuclear

Big financial risk for investors in Small Modular Nuclear Reactors (SMRs)

“SMRs are just the next chapter in a nuclear industry that can’t stand up on its own,” said Don Hancock, director for nuclear waste safety at the Southwest Research and Information Center, “so it always has to be funded by the government.”

Even if some risks are reduced, “pocket nukes” would still be more dangerous than wind, solar and other renewable energy, according to UCS. They’re also much more vulnerable to use by terrorists.

Perhaps even more sobering, though, is nuclear power’s true cost.

In February, Taxpayers for Common Sense handed out its “Golden Fleece Award” to the DoE for the dollars being spent on SMRs.

Nuclear Power, Part 2: Nukenomics, By Ned Madden, 14 June 13 TechNewsWorld Can the nuclear industry stand on its own two feet financially? It all depends on whom you ask. “There are plenty of cost estimates out there regarding what a new nuclear power plant will cost — unfortunately, those estimates are speculative. It has been decades since anyone has tried to build a nuclear plant in the United States,” said the Cato Institute’s Jerry Taylor.

There’s no denying that safety and effectiveness are both critical concerns when it comes to nuclear power, and that’s just as true for investors in the technology as it is for those who rely on the energy it generates.

Part 1 of this three-part series describes a new generation of small modular reactor designs whose promise is undeniably compelling. What’s less certain, however, is whether they are feasible as a free-market business proposition without current levels of government-backed investment.

That’s the question at the heart of what’s sometimes called “nukenomics,” and it’s a complicated one.

Even giant corporations in the nuclear energy industry are cautious about the fiscal viability of the nuke space. Construction cost estimates for new nuclear power plants are highly uncertain.

Risky Business

However, construction costs are just the beginning. Billions of dollars are spent in operating performance, fuel price, waste disposal and other factors.

Analysis of the economics of nuclear power must take into account who bears the risks of future uncertainties. To date, all operating nuclear power plants worldwide have been subsidized by governments and developed by state-owned or regulated utility monopolies.

Most of the risks associated with nuclear power plants have been borne by taxpayers and ratepayers rather than suppliers, in other words….. “In the U.S. South and Southeast, state legislatures and regulatory commissions provide the assurance of cost recovery necessary for capital-intensive projects,” Kerekes told TechNewsWorld. “They also allow companies to recover financing costs during construction, which eases stress on cash flow and reduces the rate increases necessary when the plant goes into service.”

Only Partial Coverage

Insurance protection is another enormous factor. In accordance with the Price-Anderson Nuclear Industries Indemnity Act of 1957, nuclear power in the U.S. has been granted indemnity from the burden of carrying full third-party insurance liabilities.

The limited insurance that is required does not cover the full multibillion-dollar costs of a major nuclear accident of the sort that occurred at Chernobyl or Fukushima, according to the Union of Concerned Scientists.

In fact, Price-Anderson significantly shifts accident and security risks from industry to taxpayers by limiting the primary insurance a nuclear plant owner is required to carry to $375 million, the UCS charges. In the event of an accident, each nuclear plant owner is assessed a prorated amount for a pool totaling $11.6 billion……

‘Golden Fleece Award’

In February, Taxpayers for Common Sense handed out its “Golden Fleece Award” to the DoE for the dollars being spent on SMRs.

Why the dubious honor?

The DoE has already provided nearly $100 million for SMRs, while their commercial viability remains in question, the group charged. In addition, DoE has committed up to $452 million over the next five years to fund up to two separate demonstration projects.

If DoE believes there is a “need and market” for SMRs, the mature and profitable nuclear industry should bear the full risk and cost of making SMRs a reality, Autumn Hanna, TCS’s senior program director, told TechNewsWorld.

“In these tight budget times, federal taxpayers cannot afford to provide additional subsidies to the nuclear power industry,” Hanna explained.

Can the Industry Stand on Its Own?

Other nuclear watchdogs remain cautious about embracing innovations such as SMRs.

“SMRs are just the next chapter in a nuclear industry that can’t stand up on its own,” said Don Hancock, director for nuclear waste safety at the Southwest Research and Information Center, “so it always has to be funded by the government.”

Even if some risks are reduced, “pocket nukes” would still be more dangerous than wind, solar and other renewable energy, according to UCS. They’re also much more vulnerable to use by terrorists.

Perhaps even more sobering, though, is nuclear power’s true cost.

“Subsidies to the nuclear fuel cycle have often exceeded the value of the power produced,” concludes a UCS report released in 2011, “Nuclear Power: Still Not Viable without Subsidies.” The report attempts to take into account all the costs and risks shifted from the nuclear industry to government and ratepayers over the past 50 years.

“This means that buying power on the open market and giving it away for free would have been less costly than subsidizing the construction and operation of nuclear power plants,” the report observes.

Wildly Unrealistic’

Indeed, the claim that nuclear power is “inexpensive and affordable” is meaningless, Jerry Taylor, senior fellow at the Cato Institute, told TechNewsWorld.

“Even with the plethora of federal tax breaks, loan guarantees and the like, no one in the United States is ordering any of these new facilities,” Taylor said.

“Inexpensive and affordable relative to what?” he asked. “There are plenty of cost estimates out there regarding what a new nuclear power plant will cost. Unfortunately, all are handicapped by the fact that those estimates are speculative. It has been decades since anyone has tried to build a nuclear power plant in the United States.”

“The few projects now going forward in Europe,” concluded Taylor, “notably in Finland and France, suggest that the industry’s cost estimates are wildly unrealistic.” http://www.technewsworld.com/story/78268.html

June 17, 2013 - Posted by Christina Macpherson | Uncategorized