By Michael Mariotte

Seven years later, the DOE's $18.5 Billion nuclear loan program has paid only for this (the Vogtle reactors as of March 2014). And according to Southern Co. execs, the taxpayer loan wasn't even needed.

Seven years later, the DOE’s $18.5 Billion nuclear loan program has paid only for this (the Vogtle reactors as of March 2014). And according to Southern Co. execs, the taxpayer loan wasn’t even needed.

Today, 35 clean energy organizations from across the country submitted formal comments to the Department of Energy (DOE) urging it to end its nuclear loan program. The comments are in response to a DOE solicitation seeking to revive the failed program which, after seven years, has succeeded only in providing one loan to a nuclear project (the Vogtle reactors in Georgia) whose executives publicly said they didn’t need it and offering a loan to another project (Calvert Cliffs-3 in Maryland) for which it would have been illegal for its principal to receive it.

Given that record, which the 35 groups termed an “abject failure,” DOE is now attempting to reframe its program–in direct conflict with its intent under the 2005 Energy Policy Act that created the program–to allow it to provide loans to “small modular reactors” that don’t yet exist and to bail out uneconomic reactors by providing low-interest loans to nuclear utilities to enable power uprates and to meet NRC-required safety upgrades.

In short, DOE still has $10.2 Billion available in this program that clearly has not worked as either its Congressional or DOE supporters had expected, or at least hoped. At this point, you’d think DOE would just want to cut its losses; instead, like a child with a dollar in a candy store, that money is burning a hole in DOE’s pocket.

The groups, however, were kind enough not to lay the blame on DOE for the program’s inability to spark the “nuclear renaissance” it was intended to do.

Instead, they wrote:

The DOE’s nuclear loan program has been an abject failure, even on its own terms. The reasons for that are many, and for the most part have been out of the control of DOE. They include increased competition in the electricity generation marketplace; the explosive growth in renewables as costs for renewable technology continue to plummet—a trend expected to continue for years if not decades; and, unfortunately, the rise in fracking-produced natural gas.

The groups added:

The nuclear loan program was established at a time when too many politicians believed nuclear industry hype that a nuclear power “renaissance” was just around the corner, and some government support would be extremely helpful in its launch. But the “renaissance” didn’t materialize and nuclear power is back to where it was 15 years or so ago, except in worse position. Then, it was simply a moribund industry. Now, it is not only moribund but obsolete—new technologies, from rooftop solar with battery storage to smart grids to the unexpected effectiveness of energy efficiency programs and mandates, to the growing concept of distributed generation, which provides not only safer and cheaper power, but also a more secure grid; have risen to take nuclear’s place.

Nuclear power is not only risky from a public health and safety perspective; it always has been financially risky as well. According to DOE’s own study, the first 75 reactors in the U.S. were built with an average cost overrun of 207%–or more than three times their original expected cost. Those reactors that came later had even higher cost overruns.

There is no longer any need, if indeed there ever was, to force taxpayers to take those kinds of risks.

Rather than attempt to resuscitate its failed nuclear loan program, the DOE should acknowledge the program’s failure and explain to policymakers that it failed not because of DOE’s policies, but because of much larger market forces, the effect of multiple nuclear meltdowns, and the rise of new technologies.

The full comments are available here.

Michael Mariotte

November 3, 2014


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Filed under: Nuclear Economics Tagged: Department of Energy, nuclear loan program, Vogtle

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