Subsidies

The nuclear industry has been heavily subsidized throughout its 50+-year history in the U.S. It continues to seek the lion's share of federal funding since it cannot otherwise afford to expand.

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Entries by admin (137)

Sunday
Mar032013

Nuclear Relapse? Canceled! Nuclear power? Game over!

Peter BradfordPeter Bradford explains in the Bulletin of Atomic Scientists why, without massive ratepayer and/or taxpayer subisidies, the so-called "Nuclear Renaissance" is going nowhere fast.

As reported by ScienceDaily in an article entitled "U.S. May Face Inevitable Nuclear Power Exit,"  the Bulletin of Atomic Scientists (BAS) has concluded its three part "Nuclear Exit" series with a look at the United States. The previous two installments examined the nuclear power phase-out in Germany, and the nuclear power status quo in France.

The BAS U.S. coverage features former U.S. Nuclear Regulatory Commission Commissioner, Union of Concerned Scientists board member, and Vermont Law School professor Peter Bradford's "How to close the U.S. nuclear industry: Do nothing," which concludes that, without massive taxpayer or ratepayer infusions, almost all proposed new reactors will not happen, and currently operating reactors will permanently shutdown by mid-century, unless the NRC rubber-stamps 80 years of operations (as opposed to the current, already risky 60).

In a section entitled "Picturing a U.S. phase-out," Bradford writes:

"The countries that have recently decided to phase out nuclear energy have done so by governmental fiat, complete with statutory deadlines both for individual reactors and for nuclear power in general. But no such sweeping action is really necessary in countries that have chosen to procure power generation through market mechanisms. The US experience demonstrates that absence of governmental intervention will create a glide path, determined in part by how long a country is prepared to allow its oldest reactors to operate, but in fact by the interplay between gas-driven electricity prices and the point in time at which older plants must make significant capital investments." (emphasis added)

Bradford points out that "By this standard, units at Crystal River and San Onofre--currently closed by major equipment failures--appear to be serious shutdown candidates, though they may survive, because they are located in Florida and California, respectively, states in which regulators can override market verdicts and impose their repair costs on customers."

In fact, Duke/Progress has thrown in the towel on Crystal River, announcing that it is now permanently shutdown. And Friends of the Earth, along with a groundswell of grassroots anti-nuclear activism in southern California, is doing all it can to keep San Onofre Units 2 and 3 shutdown for good, as well.

A spokesman for Dominion Nuclear admitted that the "purely economic reasons" which led to the utility's decison to close its Kewaunee atomic reactor on the Lake Michigan shoreline in Wisconsin -- the first atomic reactor shutdown announcement in 15 years in the U.S. -- was the inability to make needed, major safety repairs andturn a profit, given the competitive electricity market.

And Entergy Nuclear's brand new CEO, Leo Denault, admitted to Reuters that numerous of his "dirty dozen" atomic reactors -- especially the merchant plants (those in deregulated, competitive electricity markets) -- face tough economic challenges, due to costly upkeep (a.k.a., essential safety-significant repairs and component replacements).

Reuters reported: "[Denault] said some plants are in the more challenging economic situations for a variety of reasons, including 'the market for both energy and capacity, their size, their contracting positions and the investment required to maintain the safety and integrity of the plants.'" (emphasis added)

At its Palisades atomic reactor on the Lake Michigan shore in southwest Michigan, Entergy has chosen to foregonumerous major, needed repairs (such as replacing the badly corroded reactor lid; replacing the deteriorated steam generators, for the second time in the plant's history; dealing with the worst embrittled reactor pressure vessel in the U.S.; making needed fire protection upgrades, etc.) for six long years now, apparently in order to "balance the books" -- that is, to prioritize profits (and executive salaries, and shareholder returns) over public safety.

Thursday
Feb212013

Fermi 3 proposed new reactor price tag skyrockets to $20 billion

An artist's rendition of the $20 billion boondoggle ESBWR targeted to be built at Fermi 3 On Feb. 19, 2013, the environmental coalition intervening in opposition to the construction and operation of Detroit Edison's proposed new Fermi 3 atomic reactor filed new and amended contentions in response to the U.S. Nuclear Regulatory Commission's Final Environmental Impact Statement about the proposal. The coalition issued a news release. As environmental coalition attorney Terry Lodge says in the press release, Fermi 3's price tag has skyrocketed to $20 billion.

This, despite the large subsidies the ESBWR design and the Fermi 3 project have enjoyed, at federal taxpayer expense. Detroit Edison's COLA (combined Construction and Operating License Application) licensing expenses are elibible for subsidized "reimbursement," via federal funding provided under the Energy Policy Act of 2005, part of $35.5 billion in nuclear power subsidies provided by that law ($22.5 billion in federal nuclear power loan guarantees, and another $13 billion in various other subsidies).

In addition, the ESBWR was chosen as one of only two reactor designs to win subsidies towards its engineering research and development from the U.S. Department of Energy, as part of the unfortunately named Nuclear Power 2010 program, given the deployment delays the troubled design, and Fermi 3 project, have suffered. Ed Lyman at Union of Concerned Scientists reported at a press conference in June 2010 that the Nuclear Regulatory Commission had 6,000 Requests for Additional Information (RAIs) about the half-baked ESBWR design for reactor vendor General Electric-Hitachi. When testifying before congressional committees in the past several years about the progress of the Nuclear Power 2010 program, Obama administration Energy Secretary Steven Chu had little to nothing to say about the lackluster ESBWR design. In fact, several nuclear utility companies canceled their orders for ESBWRs in 2008-2009, leaving Fermi 3 as the last U.S. ESBWR proposal standing.

Documents related to environmental intervenors' filing of Feb. 19, 2013 in opposition to the General Electric-Hitachi so-called "Economic Simplified Boiling Water Reactor" (or ESBWR, see image, left) proposed to be constructed and operated at the Fermi nuclear power plant in Monroe County, Michigan, on the Lake Erie shoreline, as well as documents reveal the major schedule delays afflicting the project:

Intervenors' Feb. 19, 2013 "MOTION FOR RESUBMISSION OF CONTENTIONS 3 AND 13, FOR RESUBMISSION OF CONTENTION 23 OR ITS ADMISSION AS A NEW CONTENTION, AND FOR ADMISSION OF NEW CONTENTIONS 26 AND 27";

Current Fermi 3 COLA Review Schedule (Feb. 15, 2013), showing 2 years and 10 month of delay;

Original Fermi 3 Schedule (June 30, 2009).

Thursday
Jan172013

Forbes: "the nuclear renaissance may be largely over before it started" 

"Burning Money" image by Gene Case, Avenging AngelsPeter Kelly-Detwiler, Contributor to Forbes, has published an op-ed entitled "New Centralized Nuclear Plants: Still an Investment Worth Making?" He begins the piece:

"Just a few years ago, the US nuclear renaissance seemed at hand.  It probably shouldn’t have been.  Cost overruns from Finland to France to the US were already becoming manifest, government guarantees were in doubt, and shale gas drillers were beginning to punch holes into the ground with abandon." (emphasis added)

This, despite the massive public (ratepayer and taxpayer) subsidies which the nuclear power industry has enjoyed in the U.S. for well over half a century, as comprehensively reported by Doug Koplow for the Union of Concerned Scientists.

The Forbes contributor concludes that "the nuclear renaissance may be largely over before it started," with not only the vast majority of proposed new reactors in the U.S. being cancelled, but even paid-off old reactors like Kewaunee in Wisconsin being permanently shutdown due to crushing economics -- such as the expense of major, vitally needed safety repairs at the 40-year old reactor.

Kelly-Detwiler cites the "takes too long," "costs too much," and "bet-the-farm" nature of nuclear power for the "failure to launch" of the nuclear relapse.

Regarding that last point, Kelly-Detwiler writes:

'So it appears that the nuclear renaissance may be largely over before it started.  And yet, many projects have not yet been canceled, with utilities and ratepayers accepting ever more risk in order to rescue sunk costs. In many cases, these costs have soared or will soar into the billions. As risk management expert Russell Walker of the Kellogg School of Management is quoted as saying in the Tampa Bay Times “When the stakes get higher, it gets harder for organizations to walk away…this happens a lot.  It’s the same problem a gambler has: If I play a little longer, it’ll come around.” '

However, he points out that the only proposed new reactors that seem to be moving ahead are those privileged by Construction Work in Progress (CWIP) funding. He writes:

'In Georgia, Vogtle Units 3 and 4 (owned jointly by a number of utilities, including Georgia Power) appear in somewhat better shape, but issues have cropped up there as well.  Customers currently pay $10 per month in advance to cover financing associated with the two 1,117 MW units.  Georgia Power is allowed by legislation to recover $1.7 bn in financing costs of its estimated $6.1 bn portion of the $14 bn plant during the construction period.  However, there have already been some cost problems, and Georgia Power is disputing its responsibility to pay $425 million of overruns resulting from delays in licensing approvals.  Total cost excesses to all partners total $875 mn.  The two units were expected to come online in 2016 and 2017, but in a Georgia PSC meeting in December, an independent monitor noted that expected delays of fifteen months are largely as a result of poor paperwork related to stringent design rules and quality assurance.  Those delays will likely continue to cost more money...

With low natural gas prices, efficient combined cycled turbines, more efficient renewables and a host of more efficient end-use technologies, that’s a bet fewer and fewer seem wiling to take.  Unfortunately for ratepayers at some utilities, they are at the table whether they like it or not…' (emphasis added)

If the op-ed's title is meant to imply that so-called small modular reactors might still save the day for the retreating nuclear power industry, it must be pointed out that the supposed justification for giant-sized proposed new reactors (such as the AP1000, at 1,100 MWe; the ESBWR at 1,500 MWe; the EPR at 1,600 MWe; etc.) was "economies of scale." Since small modular reactors represent the opposite end of the spectrum, it stands to reason these would be even more expensive than their super-sized, failed siblings.

In a classic February 14, 1985 piece entitled “Nuclear Follies,” Forbes wrote: 

"The failure of the U.S. nuclear power program ranks as the largest managerial disaster in business history, a disaster on a monumental scale. The utility industry has already invested $125 billion in nuclear power, with an additional $140 billion to come before the decade is out, and only the blind, or the biased, can now think that the money has been well spent. It is a defeat for the U.S. consumer and for the competitiveness of U.S. industry, for the utilities that undertook the program and for the private enterprise system that made it possible.”

Saturday
Dec222012

25 years ago today, the "Screw Nevada Bill" was passed

Yucca Mountain, as viewed through the frame of a Western Shoshone ceremonial sweat lodge. Photo by Gabriela Bulisova.As reported by the Las Vegas Review Journal, in the wee hours of Dec. 22, 1987, 49 states ganged up on one, singling out Yucca Mountain in Nevada as the sole site in the country for further study as a potential national dump for high-level radioactive waste. Numerous targeted dumpsites in the East had been indefinitely postponed a year or two before, due to widespread public resistance. Deaf Smith County, TX and Hanford, WA were also being considered for the western dumpsite. But TX had 32 U.S. Representatives, WA had a dozen, and NV, just one. TX and WA Representatives also held the powerful House Speaker and Majority Leader slots. On the Senate side, NV had two rookie Senators, regarded at the time as easy to roll. The "raw, naked" political decision was made behind closed doors.

But the science -- Yucca's geological and hydrological unsuitability -- caught up to the proposal. So did Harry Reid's revenge, as he grew in power to become Senate Majority Leader. Led by Western Shoshone spiritual leader Corbin Harney, the Western Shoshone National Council maintained tireless opposition to the dump, joined, over time, by more than 1,000 environmental groups. Then, in 2009, President Obama and his Energy Secretary, Steven Chu, wisely cancelled the dangerous, controversial proposal.

Although $11 billion of ratepayer and taxpayer money had already been wasted, another $90 billion would have been wasted if the project had gone forward. If the dumpsite had opened, many thousands of high-level radioactive waste trucks, trains, and barges would have travelled through most states, past the homes of tens of millions of Americans, at risk of severe accidents or intentional attacks unleashing disastrous amounts of radioactivity into metro areas. And if wastes had been buried at Yucca, it would have eventually leaked into the environment (beginning within centuries or at most thousands of years), dooming the region downwind and downstream as a nuclear sacrifice area.

Dec. 21st marked the 30th anniversary of the passage of the Nuclear Waste Policy Act. Such laws, transferring title and liability from the nuclear utilities which generated the wastes -- in order to make a profit -- onto ratepayers and taxpayers, represent an unprecedented, large-scale, and open-ended subsidy.

Friday
Oct262012

"The Rust-Bucket Reactors Start to Fall"

Harvey WassermanHarvey Wasserman, editor of Nukefree.org and author of Solartopia, has written a blog inspired by the announced closure of the Kewaunee atomic reactor in Wisconsin. He begins by stating 'The US fleet of 104 deteriorating atomic reactors is starting to fall. The much-hyped "nuclear renaissance" is now definitively headed in reverse.'

He points out that Kewaunee may be but the first domino to fall, describing the impact of "low gas prices, declining performance, unsolved technical problems and escalating public resistance" at numerous other old, age-degraded, troubled reactors across the U.S., including San Onofre, CA; Crystal River, FL; Cooper and Fort Calhoun in NE; Vermont Yankee; Indian Point, NY; Oyster Creek, NJ; and Davis-Besse, OH.

Harvey writes "Many old US reactors are still profitable only because their capital costs were forced down the public throat during deregulation, through other manipulations of the public treasury, and because lax regulation lets them operate cheaply while threatening the public health."

Harvey recounts this abysmal history of nuclear power in the U.S., having much to do with doomed economics: "The announcement that Kewaunee will shut could send the US fleet into free fall. Richard Nixon promised the US a thousand reactors by the year 2000. But in fact there were 104. And with the needle now dropping, it's clear the "Peaceful Atom" is on its way out."

But Harvey also points out the momentum applies to new reactors as well, such as at Vogtle, GA and Summer, SC, as well as overseas, in the wake of Fukushima, not only in Japan, but also India, and even Europe, led by Germany's nuclear power phase out.

Harvey writes about the flagship new reactors proposed in the U.S.:

"The two reactors under construction in Georgia, along with two in South Carolina, are all threatened by severe delays, massive cost overruns and faulty construction scandals, including the use of substandard rebar steel and inferior concrete, both of which will be extremely costly to correct.

A high-priced PR campaign has long hyped a "nuclear renaissance." But in the wake of Fukushima, a dicey electricity market, cheap gas and the failure to secure federal loan guarantees in the face of intensifying public opposition, the bottom may soon drop out of both projects.

A proposed French-financed reactor for Maryland has been cancelled thanks to a powerful grassroots campaign. Any other new reactor projects will face public opposition and economic pitfalls at least as powerful."

Harvey, a senior advisor to Greenpeace USA and Nuclear Information and Resource Service (NIRS), will address "From Fukushima to Fermi-3: Getting to Solartopia Before It's Too Late" in Dearborn, MI on Dec. 7th at the official launch event for the new organization, the Alliance to Halt Fermi-3.