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ARTICLE ARCHIVE

Nuclear Costs

Estimates for new reactor construction costs continue to sky-rocket. Conservative estimates range between $6 and $12 billion per reactor but Standard & Poor's predicts a continued rise. The nuclear power industry is lobbying for heavy federal subsidization including unlimited loan guarantees but the Congressional Budget Office predicts the risk of default will be well over 50 percent, leaving taxpayers to foot the bill. Beyond Nuclear opposes taxpayer and ratepayer subsidies for the nuclear energy industry.

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Thursday
Nov032016

NIRS: NATIONAL BAILOUT OF U.S. NUCLEAR REACTORS BASED ON NEW YORK APPROACH WOULD COST $280 BILLION BY 2030

Not A Viable Climate Strategy: With More Than Half of US Reactors Expected to Be Uneconomical by 2020, $160 Billion Would Still Be Required for “Narrower” Subsidy Program; Huge Infusion of Support Would Crowd Out Renewables.

WASHINGTON, D.C.///November 3, 2016///Nuclear power started out in the United States with the promise it would be “too cheap to meter,” but may end up being “too big to bail out.”  A new report by the nonprofit Nuclear Information and Resource Service (NIRS) finds that a national bailout of nuclear energy patterned on the model advanced this year in New York State would cost ratepayers and taxpayers more than $280 billion by 2030.  Based on an independent analysis that over half of existing nuclear power in the U.S. will be unprofitable by 2020, a narrower bailout would still cost the U.S. $160 billion by 2030.  In addition to enormous expense, NIRS found that one major side-effect of bailing out nuclear power on a large-scale basis would be the starving of renewable energy of needed capital.

Available online at http://bit.ly/too-big-to-bail-out-nuclear, the “Too Big to Bail Out: The Economic Costs of a National Nuclear Power Subsidy” report notes that since 2014 nuclear power companies have lobbied aggressively for new subsidies to benefit existing nuclear power stations in the U.S. So far, such proposals have only been adopted in one state (New York), and legal and regulatory challenges have resulted today in only one nuclear reactor receiving temporary financial support to date: the R.E. Ginna Nuclear Power Plant in New York. A long-term, statewide subsidy policy recently adopted in New York, to be implemented beginning in April 2017, is now being touted as a model for other states and for national implementation. The total cost of the 12-year subsidy New York is offering to four reactors is substantial: an estimated $7.6 billion -- more than three times as much as the subsidies for new renewable energy sources ($2.44 billion by 2030) under the state’s new standard.

How good a yardstick is New York in terms of what the industry wants for a broader bailout?

A recent draft report by the U.S. Department of Energy (DOE) recommends providing new and increased subsidies and incentives to promote the longevity of existing reactors and also the deployment of new reactors; the DOE report recommends subsidies amounting to $27/MWh, very close to those under the New York model.  Relying upon the close symmetry between the New York State first-in-the-nation bailout scheme and the comparable DOE national subsidy recommendations, the NIRS report looks at both the cost of bailing out all reactors ($280 billion by 2030) and, more narrowly, the 56 percent of U.S. nuclear energy production that is expected to be uneconomical by 2020 ($160 billion by 2030).  For comparison purposes, the smaller of the two bailout totals projected by NIRS is significantly more than the $128 billion invested in all new wind generation in the U.S. over the last 10 years.

Report author Tim Judson, executive director, NIRS, said: “Investing in aging nuclear plants diverts scarce consumer energy dollars from investments in new, zero-carbon energy resources. It puts utilities and regulators in the posture of investing in legacy infrastructure, rather than modernizing the grid. Analysis of the bailout scheme in New York State looking at social cost factors such as climate change shows that conventional renewable energy subsidies are at least four times as effective at mitigating CO2 emissions in the medium-term as nuclear subsidies and twice as cost-effective in the short-term. The bottom line is that renewable energy could be developed to replace or phase-out nuclear generation at far lower cost than nuclear could be subsidized.”

Former Nuclear Regulatory Commission (NRC) Commissioner Peter Bradford, currently adjunct professor on Nuclear Power and Public Policy, Vermont Law School, and former chair of the New York and Maine state utility regulatory commissions, said: “This report illustrates that the subsidies now being sought for nuclear units that are already massively subsidized may pay far too much for relatively little climate benefit.  Worse still, they may slow the evolution of the electric industry to a less concentrated and more customer friendly form.”

Other key findings in the NIRS report include the following:

·        The U.S. would be bailing out a decidedly geriatric nuclear industry. Proposals to subsidize existing nuclear power plants are being driven by the declining economic viability of the nation’s aging nuclear fleet. From 2002-2012, average operating costs for nuclear power plants rose by 50 percent, or about 4.5 percent per year, on average.  The U.S. now has the oldest reactor fleet in the world, now averaging 35.6 years, with 37 percent older than their original licensed lifespan of 40 years; another 37 percent are between 31 and 40 years old.

·        High industry operating costs are a key factor in nuclear’s inability to compete. Since 2014, six more closures have been announced, and several more reactors have been named as potential closure candidates. The blame for nuclear’s economic problems has been misplaced on lower electricity prices resulting from declining demand and the growth of lower-cost energy sources. If nuclear operating costs had not increased so dramatically over the last 15 years, reactors would neither be unprofitable nor would their owners require such large subsidies to ensure their continued operation.

·        Nuclear is already heavily subsidized. The NIRS report points out that it is untrue for the industry to maintain that existing nuclear power stations are unsubsidized or even “under subsidized.”. Nearly all reactors were heavily subsidized by state and federal policies, from research and development, to favorable cost-recovery treatment by state utility commissions, to the $130 billion bailout (in 2016 dollars) for bad debts in the 1990s. The new proposed subsidies are for these same reactors, nearly half of which were sold or transferred effectively debt-free to merchant power generators between 1998 and 2004.  The industry also benefits from federal and state policies that reduce or eliminate reactor owners’ liability for environmental impacts, including nuclear accident insurance, nuclear waste management and disposal, reactor decommissioning and site cleanup, uranium mine and processing waste, and water consumption. A comprehensive study of nuclear power subsidies in 2011 concluded that the cost of financial supports to the nuclear industry has frequently exceeded the value of the electricity nuclear power plants produce.

·        A nuclear bailout is not a good climate strategy. Nuclear subsidy costs would be incurred without, on their own, reducing carbon emissions. Maintaining existing reactors’ operations does not, in and of itself, cut greenhouse gas emissions, as the Environmental Protection Agency (EPA) determined in framing the Clean Power Plan. It would only hedge against possible increases in emissions, if fossil fuel generation were to increase due to reactor closures. This is consistent with the EPA’s determination in issuing the Clean Power Plan regulation, which concluded that incentives for existing reactors were unwarranted to meet carbon dioxide (CO2) reduction goals.

·        Nuclear plant retirements can ... and should … be handled like non-nuclear generator retirements. The NIRS report recommends, among other things, creating “proactive plans to replace or phase out nuclear, in concert with emissions reduction and renewable energy goals, and grid modernization initiatives. In this way, reactor closures may be treated similarly to reliability impacts of generator retirements, which involve a similar process:  (1) independent evaluation of the likelihood and scale of grid impacts resulting from the plant closure; (2) evaluation of the availability, cost-effectiveness, and timeframe for alternatives, through resource planning, market-based processes, or procurement through open, competitive bidding; and (3) time-limited economic support for the incumbent generator only until more cost-effective alternatives can be identified and implemented.”

ABOUT NIRS

2018 will mark the 40th anniversary of Nuclear Information and Resource Service.  NIRS was founded to be the national information and networking center for citizens and environmental activists concerned about nuclear power, radioactive waste, radiation and sustainable energy issues. http://www.nirs.org

MEDIA CONTACT:  Max Karlin, (703) 276-3255 or mkarlin@hastingsgroup.com.

EDITOR’S NOTE: A streaming audio replay of the news event will be available as of 4 p.m. ET on November 3, 2016 at http://bit.ly/2ff9xTK

Monday
Oct312016

Look for it on a billboard near you in New York State: Stop the Cuomo nuclear bailout tax!

Thanks to Scott Stapf of the Hastings Group for the Tweet, pointing to this New York Daily News article:

"Critics of upstate nuclear bailout buy billboard space".

Monday
Oct242016

Yet another long overdue atomic reactor permanent shutdown: Fort Calhoun, NE switched off for good today!

As reported by Cole Epley in the Omaha World-Herald, the Omaha Public Power District's (OPPD) Fort Calhoun atomic reactor permanently shutdown today, four and a half months after the nuclear utility's management proposed it, and the utility's board of directors voted in agreement.

Although OPPD emphasized Fort Calhoun's inability to compete with less expensive sources of electricity (including Nebraska's abundant wind power) as the reason for its decision, Fort Calhoun has also suffered serious safety problems for the past several years.

This included a close call with catastrophe, during historic floods on the adjacent Missouri River in the spring and summer of 2011. (This earned the atomic reactor the nickname "Port" Calhoun, as flood waters lapped against safety related systems, structures, and components! See the photo, above left.) It also included a fire, that smoldered within the plant for days, remarkably without response, also in 2011. The consequent two and half year shutdown cost Nebraskans several hundred million dollars (Fort Calhoun is publicly owned).

As soon as the irradiated fuel is removed from the core, Fort Calhoun can no longer suffer a reactor meltdown, by definition. In addition, no more high-level radioactive waste will be generated. That is the good news. The bad news is that the irradiated nuclear fuel already generated there, since 1974 -- currently stored in the indoor "wet" storage pool, and outdoor dry casks -- must be isolated from the living environment for the next million years.

Thursday
Oct202016

Lawsuit seeks to halt $7.6 billion mega-bailout for failing NY nuclear plants

Thanks to Scott Stapf for the Tweet headline above, alerting us to the breaking news in the New York Times, that:

A collection of energy companies and trade associations have filed a lawsuit seeking to reverse a decision by the administration of Gov. Andrew M. Cuomo to subsidize several struggling upstate nuclear plants, arguing that the state overstepped federal authority to regulate energy prices.

The suit, filed Wednesday in Federal District Court in Manhattan, comes a little more than two months after Mr. Cuomo announced a deal to provide hundreds of millions of dollars per year in subsidies to buttress the bottom lines of four upstate plants. The subsidies were included in an order from the Public Service Commission, whose chairwoman, Audrey Zibelman, is named as the lead defendant...

This news comes just one week after Public Citizen filed a legal challenge at the Federal Energy Regulatory Commission (FERC), opposing the NY nuclear power subsidy, at ratepayer expense, as well as the related sale of the FitzPatrick atomic reactor by Entergy to Exelon. RTO Insider reported on the Public Citizen lawsuit.

Wednesday
Oct192016

NYPIRG: Take 30 seconds to save $7.6 billion [Stop the Cuomo Tax -- No Nuclear Bailout]

Here is the latest action alert for New Yorkers from NYPIRG (New York Public Interest Research Group) re: the Stop the Cuomo Tax/No Nuclear Bailout campaign:

New Yorkers know that Governor Cuomo’s plan to bail out old, unprofitable nuclear plants is a big mistake. If the governor gets his way, he’ll take $7.6 billion from hard working New Yorkers and hand it over to a highly profitable Chicago nuclear company. We should be investing in sustainable energy, not handing out giant subsidies for aging, unsafe nuclear plants.

You can help change the governor’s mind with a quick 30-second phone call to let his office know where you stand. It’s simple. Just follow these instructions:

  1. Call 866-772-3843

  2. Tell Governor Cuomo's office your name and where you live, then say:
    "As a constituent, I oppose the Cuomo tax on New Yorkers' utility bills and urge Governor Cuomo to stop his proposed $7.6 billion bailout of unprofitable nuclear plants. His mistaken plan would take billions of dollars out of New Yorkers’ pockets to subsidize aging, unsafe, nuclear plants owned by a highly profitable Chicago-based company. Instead, Governor Cuomo should invest in energy efficiency and truly clean renewable alternatives like solar and wind while saving consumers money."

  3. Click the [following link] so we can count the number of calls delivered! I MADE THE CALL

We know that when New Yorkers come together to make their voices heard, we can make real positive change for the people of this state. Making the call today is a good first step.

Thanks for joining us in this movement to Stop the Cuomo Tax.

Blair Horner
StopTheCuomoTax.org