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GAIA Host Collective
New Nuke held up by Financing, not Opposition
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/04/AR200709...
Nuclear power will take massive gov't support to build out. Given the decade long time to completion, is this the best use of limited gov't support ?
IMHO, yes, at a fast (but slow to supporters) rate of growth that the moribund restart of the industry can safely support. However, nuke should NOT be "first in line".
This should be, IMO, first in line with nukes about #8 in line.
http://www.trains.com/ctr/objects/images/railroad_electrification_1970s....
Alan
Hi Alan,
The Province of Ontario will reportedly spend $27 billion dollars to refurbish its nuclear reactors and to add additional nuclear capacity -- and given Ontario's last nuclear facility, Darlington, went SIX times over budget, you might want to take that number and double or triple it. It seems "old school" thinking is alive and well up north.
Source: http://www.thestar.com/article/251289
For more related coverage see:
http://www.thestar.com/comment/columnists/94629
On a more positive note, Tyler Hamilton's most recent column (http://www.thestar.com/article/252551) discusses a new technology that has the potential to dramatically reduce peak power demand.
Let's hope for more fresh ideas.
Cheers,
Paul
If refitting the trains to electric and the nuclear build up were to have occurred at the same time, the train would be done many many years before the power plant produced even a single watt of power.
Thus the two can be conducted in parallel.
(even using a 5-10 year time line for nuclear plant construction and a probable 5 year time line for new rail, the savings which the rail enjoys can finance the new nuclear plants)
Gilgamesh, 'refitting trains and nuclear build up' merely mean adding more fuel to the fire as long as the population keeps increasing.
http://en.wikipedia.org/wiki/Us_population
Hi Crystal,
Time to put in a word for an approach:
"Seeking a stable future: perspectives on population policy. The legal approach: women's rights as human rights." by RN Pine.
http://www.ncbi.nlm.nih.gov/sites/entrez?cmd=Retrieve&db=PubMed&list_uid...
A loan guarantee is not a subsidy. It serves more like a guarantee for the financiers that the government will not change its policy the next time somebody different takes the office - easily scrapping a multi-billion investments with a twist of the pen.
Personally I don't know even a single case when the government had to actually kick in and repay the loan for a nuclear plant. The companies that build them are usually stable companies and I don't know a case of any of them going out of business because of nuclear cost overruns. Of course there might be cases I'm not aware of but feel welcome to correct me...
A loan guarantee *IS* a subsidy !
It takes a sub-prime risk (a VERY bad risk BTW, see dozens of started but never finished nukes !) and with a promise of gov't $, makes it prime.
Personally I don't know even a single case when the government had to actually kick in and repay the loan for a nuclear plant
TVA is an arm of the government and they have paid the bonds for long delayed and never finished nuclear power plants ($6 billion of 1980s $ for Bellafonte (which, after 32 years, had it's construction permit canceled), Browns Ferry 1, Watts Bar I & II (those 30 year bonds are almost paid off), Yellow Creek I & II, Hartsville I, II, III & IV, Phipps Bend I & II.
That is eleven nuclear reactors and two of them have produced minimal amounts of power since they started construction in 1974 and 1979. The rest are like WHOOPS I, III, IV & V, writeoffs !
The gov't has not guaranteed commercially owned reactors before, so they were not stuck with River Bend #2, Ft. St. Vrain, Zimmer, et al.
The risk is *NOT* a "political" risk, the risk is the nuclear power building industry having massive cost over-runs and lengthy delays. My guess is that less than half of US nuclear reactors were within 25% of budget and within 1 year of scheduled completion.
I am willing to give this non-economic technology subsidies, but they are not my first priority for subsidies.
New nuclear reactors are simply NOT commercial today in the USA, and the fault lies with the industry building them and the technology. See the quote from the Constellation exec at top.
I have not followed Finland closely, but I understand that they are running into delays and cost overruns already, whilst they are still less than half complete.
Alan
Part of the problem is our absolutely mindless, knee-jerk adherence to hypercapitalist ideology. Had we settled on a national standardized set of siting, design & construction specifications, all of these facilities could have been built and put online on a reasonably fast track. That's how the French did it. But we are SO superior to those "cheese eating surrender monkeys", right? That's why they're only producing something like 70% of their power from operating nukes, while we've got all of these unbuilt and unpaid for ground disturbances as symbols of our mighty national technical prowess.
That's how the French did it.
Yea, so much faith that plants were cited along the German border
http://www.google.com/search?ie=UTF8&q=french+reactors+border+germany
No anti-German siting issues that I can see. Two plants, 6 reactors, next to Germany. Germany placed two experimental reactors next to France, and one two reactor plant. The Rhine River is a good source of cooling water.
The next reactor will be built at Flamanville.
Alan
You are right that the risk is high based on past experience. This does not change that there were no taxpayer money ever payed for that. True TVA probably covered the costs in their rates, but this is different - a bad management decision in bad time could result in losses. BTW TVA has a history of that not only in the nuclear sector, check out the Tellco Dam.
It is true that loan guarantees saves money to utilities by saving them the risk premium. But as far as it does not increase my tax bill I don't consider it a subsidy. Actually I consider it a positive and necessary step to help kick start a dormant or developing industry - including wind which is also provided loan guarantees. Which reminds me that loan guarantees are provided for renewable power projects. Why are the double standards?
Take a look here:
http://energy.gov/news/5045.htm
IMO what is outragious here is the 4bln.for biofuels but nobody is ranting about those.
The ratio of nuclear + clean coal vs renewables is 4 : 1. Compare that to the ration of energy produced by the two, which is something like 50 : 1.
"IMO what is outragious here is the 4bln.for biofuels but nobody is ranting about those."
Nobody is ranting about bio-fuels? Do you read anything not related to nuclear on this forum?
"You can never solve a problem on the level on which it was created."
Albert Einstein
Nobody is ranting specifically about the loan guarantees for biofuels. At least I haven't seen it, but I may be missing something.
Please don't misinterpret me.
I am NOT against loan guaranties for nukes, but I expect those guaranties to cost tax payers quite a few billion $ in the end for economically failed nukes (half of them ? fourth of them ?). And I do NOT want to see ethanol loans.
I did NOT see any loan guaranties for wind turbines (they do not need them and would provide very little benefit since WTs are so low risk), but sauce for the goose ...
Many other worthwhile programs (some more worthwhile than new nukes) could also benefit from federal loan guaranties.
Alan
Wind energy is present in the 2006 DOE loan guarantee program.
But I could not find any numbers of how much is applied for and how much is granted. Anyway it is pointless to continue arguing this since we largely agree.
TVA issues state income tax free bonds, so no state taxes are paid on the interest on $28.3 billion; much of which is a residue from the failed nuclear program.
Municipal electric utilities, rural electric cooperatives, the four PMAs, and the TVA are exempt from Federal income tax; this type of support is addressed, but only indirectly
from a GAO report.
So taxpayers have paid a heavy price for the failure of the TVA nuclear program. Figure lost taxes on the interest of $6 billion over the 30 year payout of those bonds just for Bellafonte.
Alan
Figure lost taxes on the interest of mortgage payments. Think we should be talking trillions. With "tr".
I think you are nitpicking here. This was money that was left to taxpayers, so effectively nobody "lost" them but the government coffers. TVA still payed it's bills it's just the govt that decided to yield part of them to taxpayers - which I can only applaud in principle.
Now after dicounting for 30 years etc. we should be talking maybe around hundred million... Hardly a lump change but obviously nothing of significance. The gov machine lost the chance to waste one more $100mln. in Iraq for a single day... I'm shocked, so shocked.
TVA decided to build those 23 nuclear plants based on the demand history it had at the time. Electricity use in its service area had grown steadily ever since TVA's inception and the board considered that this would continue just as many now assume that oil demand will continue to increase at the same rate in the future as it has for the past twenty or so years. They just didn't forecast the dislocations in the economy that happened due to oil peaking in the US and the oil embargo. The biggest factor in the cancellation of those plants was the sudden leveling off of electricity demand that occured then. True there were cost overruns and construction problems, but even without those TVA would have been in trouble because the demand for that much power just didn't materialize as expected.
TVA financed the debt incurred by this fiasco in the rates but also by issuing bonds. No 'taxpayer' bailout occured.
The Tellico dam is another matter since I grew up about ten miles from Fort Loudon and it is still a bitter topic in my home area. But to say that TVA is subject to lots of pressure from political entities is an understatement. One needs to look at TN politics, not TVA management, to determine how the Tellico Dam came to be.
I think this answer should be directed to Alan. He uses the failure of TVA plans as an argument that nuclear power is a risky investment and dismisses all political factors into play.
In fact both are equaly important factors that could fail any kind of investment, not only nuclear. You have to have both preconditions, only one will not work. With oil and NG obviously near peak and coal on the GHG crosshair I think the economics of nuclear power are covered. What is left is the political will to go for it and loan guarantees are... well guaranteeing for it.
IMO if we add to this electric rail, plug-in hybrids and some wind we will have PO and GW solved by the middle of the century. So... why is all this fuss about? :)
LevinK,
If it saves the financeir's money by keeping them from having to buy private insurance, it's a subsidy. And if its too risky to be affordable by the financeir because an insurance company won't take the risk for a reasonable amount, why should I do it? Insurance actuaries are a pretty saavy bunch with an excellent understanding of risks.
I am not opposed to nuclear power, I am opposed to dishonesty about it. It's the equivalent of free mortgage insurance. It would, I'm sure, reduce the cost of everyone's mortgage. But since it has risk,it has cost .
The real purpose is to manipulate future congresses by saying "you're going to pay for it any way" and that's B.S.
Bob Ebersole
Well, economically it functions like a subsidy, but it's unavoidable in the face of political risk. Political risk can't be quantified, can't be assigned a probability, can't be assigned a cost, can't be handled in any any manner known to actuaries. At best, the appropriate premium is a totally arbitrary random number. So no private company is likely to touch big political risk, or even capable of doing so.
Now, one way to manage - but not eliminate - political risk is to have stable, limited government. That may even be what the writers of the US Constitution had in mind, but it goes against the current politically-correct ideal of switching everything 180 degrees every time some corrupt politico or ivory-tower academic tells some tear-jerker of a tall tale to The Great Shiftless Moron Mass. Even wind power, which ought to be a no-brainer, has a tough time under that regime, never mind something complex and difficult like nuclear.
Up thread I'm arguing that if it saves money but does not cost taxpayer anything out of the pocket it should not be called subsidy. I'd rather call it good policy if it aims increasing the common good, which I think it does.
And PaulS is right - the biggest element remains the political risk. The financiers need to know that the government is commited to keep the regulatory framework intact, otherwise they will most likely refuse the loan. Best case the financing will be ridiculously expensive.
http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo...
The TVA Chairman at that time (when Bellefonte construction was halted) later stated that economic factors were the reason.
You are both simply wrong. The primary risk of building nuclear power plants is NOT "political" but economic. Massive cost over-runs and multi-years delays in construction are the major risk. "Politics" did not result in shutting down an 88% complete nuke !
The Shoreham Nuclear Plant on Long Island NY is the only plant where politics can be said to have resulted in a half built nuke (technically, the utility could not evacuate Long Island in time was the reason).
With Rancho Seco and another nuke, the owners became disgusted with the very poor operating performance and massive repair bills and voted to close it.
I found a list of every announced nuke in the US and we could have had almost twice as many MW operating today were it not for massive screw-ups BY THE INDUSTRY !
Best Hopes for Avoiding Scapegoats,
Alan
Alan, Bellefonte was cancelled under the pressure of NRC right after Chernobyl and when oil was trading ~$10 and interest rates were high. Using it to prove anything is simply meaningless. Wind or solar projects at this time would have been laughed at.
In theory such risks exist today too, but sustained $70/oil are bringing them virtually to nil. If I were you I would pray that similar economic risks no longer are real; if the economy goes down again, wind and solar will be the first to follow, and the cheapest energy source - coal becomes the king.
In summary - your point might have had some validity in the 80s, but now the biggest problem is most definately unfavorable public opinion and the related govt policy. Like someone else pointed out - a single judge and a single small group of people can delay a project indefinately. In the same time interest rates would be piling up - we have a bunch of examples showing how you can ruin everything like that. Even a gold mine would be ruined.
Checkout Nuntucket Sound and the fuss around Cape Cod. That should ring some bells...
Ok, "you" have spent $6 billion (over $10 billion today $) towards building two plants; one 88% complete and the other 58% complete. Massive cost overruns and delays, but you "are getting there".
Some gov't bureaucracy says "You know, we would like for you to abandon these plants". So you say, OK ??
This makes no sense (especially for Bellefonte I, a number of nukes were abandoned half completed so scrapping Bellefonte II would not be so abnormal, but 88% complete ?) UNLESS Bellefonte was another Zimmer (abandoned when 99% complete because it was not built to nuke standards). Better to abandon at 88% than at 99% due to quality problems.
I noted that Watts Bar II (60% complete) will be completed by TVA ~2012 after a two decade halt, but Bellefonte I (88% complete) will be formally scrapped (BUT the non-safety related components like the turbines and cooling towers will be preserved for a future nuke). This supports the POV that Bellefonte was poorly built and would not have gotten an operating license. I do not know the specifics.
The formal letter to abandon Bellefonte was made by TVA in 2006, during the pro-nuke Bush Administration. Again, not a sign of political pressure.
You have this myth that "political" pressure killed nukes. Cost over-runs and lengthy delays and quality problems killed the industry. The TVA Chairman at the time has confirmed this.
Had all announced nukes been built, and none decommissioned early (Rancho Seco, Zion I & II, Trojan, Ft. St. Vrain, etc.), we would be producing close to 40% of our power from nuclear power today, not 20%. That is an amazing, and very sad failure.
If we make a Rush to Nuke, might not the same thing happen again ? All the chips on nukes as "the answer" seems quite risky to me.
I am willing to put a few chips on nukes for diversity, but my hopes for the future are certainly not centered on a Rush to Nuke.
Alan
The Cape Wind Project has wasted several million on preliminary engineering and applications, but nothing physical has been built. Very little comparison since that is 100% political and the amount wasted is 1/1000th as much as at Bellefonte.
But that's a strawman in the current context, as levin is specifically saying we need both nuclear and rail and other projects.
I think it has been a common failure of various groups advocating change that they argue down other groups proposals in the interest of getting their pet project to the front of the line. You may believe that a rail project should have #1 priority, and wind #2 and nukes #8 (or whatever), but the fact is, any of them getting any priority at all would be an improvement, and we ought to be cheering all three on, not bashing them for past difficulties.
If our next attempt at nuclear is 50% effective, that's infinitely more effective than war in Iraq and Iran, which really is the other option. It's also more effective than ethanol.
But that's a strawman in the current context, as levin is specifically saying we need both nuclear and rail and other projects
I do not think that it is a strawman. There has been a multi-week debate between LevinK and I over the speed of a nuclear plant build-out; specifically the speed with which our moribund nuke building industry can ramp up safely and economically. There has been some "coming together" of our positions over time.
We cannot do "crash everything" IMHO, Earlier I listed the various grades of urgency for different mitigation strategies.
Crash (WW II effort to build munition plants as an example) - Electrify and expand a few key intercity freight RRs, make transportation bicycling easier (If someone bombs Iran, we will need these badly & quickly).
Maximum Commercial Urgency (Canadian Tar Sands are an example) - Urban Rail, Rest of Intercity RRs with regional pax service, Wind Turbines, Neighborhood electric vehicles
Urgent (post WW II changeover to civilian production, dot.com frenzy)- PHEVs, HV DC transmission lines, Pumped Storage, EVs, geothermal power production, solar hot water heaters
Secondary Urgency (Peak Interstate Highway building boom as an example) - New Nukes, sidewalks, ground loop (geothermal) heat pumps, solar power production
All good, all worth doing ! But, as I said earlier, we cannot "crash everything" IMHO.
Saying something is "better than the Iraq War" is true of 99.8% of reality. An in-grown toenail combined with a root canal is better than the Iraq War :-P
Geaux Saints !
Alan
Some gov't bureaucracy says "You know, we would like for you to abandon these plants". So you say, OK ??
You can decide to do it if it turns out that your expectations did not materialize and the demand for these nukes was simply not there. See post from TNGranny. Govt pressure was simply the last straw.
I'll make a similar scenario for wind. You decide to build a 1000MWt offshore wind farm at the cost of $2-3bln. Then in the middle of the building process the economy goes belly up and NG prices go to $1/MMBTU. At the same time the govt decides to withdraw its support for wind (because it kills birds or whatever) and drops the 1.8c subsidy. Your project obviously has no future - what do you do? Accept the smaller loss or finish it and make your bad situation disastrous?
In the case of TVA I would suggest that if they finished it they would be at smaller loss (the nukes were almost done), but they decided that keeping their positions in front of NRC was worthed taking the sour pill. TVA is a big company and they could swallow it.
You are spinning a tale with minimal basis in fact. And not supported by later statements (made a decade later) by the then TVA chairman when he had left TVA and had no "axe to grind" AFAIK. The former TVA chairman said that TVA halted nuke construction for purely economic reasons.
TVA halted construction of a 58% & 88% finished Bellefonte I & II nuke plants, but they kept their construction permits open till early last year (over 20 years of dust).
A few months ago, TVA announced plans ($2.5 billion, 5 years) to finish Watts Bar II (60% complete). This shortly after rebuilding the fire damaged Browns Ferry I after a 24 year shutdown (no doubt transferring many of the people between those two projects).
If they had not sent a letter to the NRC a year before, they could have chosen to finish the 88% complete Bellefonte I instead of the 60% complete Watts Bar II (on paper, the logical choice was Bellefonte I first (88% complete), Bellefonte II second (58% complete, but more efficient to build side by side) and then Watts Bar II (60% complete).
Today's NRC is very pro-new nuke. So there was likely zero pressure to abandon Bellefonte as TVA did in 2006.
TVA expressly requested to preserve the containment dome and all non-safety related functions at the site (cooling towers, water intake & discharge, turbines, switchyard, administration buildings, etc.) Other internet quotes indicate that they plan to scrap the existing reactor and controls and build two AP-1000s on the site and use all the leftover non-safety items (plus the containment dome).
My hypothesis is that Bellefonte was another Zimmer. Quality controls were so poor in that earlier "Rush to Nuke" that the NRC would have denied them an operating license had they finished construction. My hypothesis does fit the observed facts.
Alan
And your point regarding this mess of is exactly what?
The former TVA chairman said that TVA halted nuke construction for purely economic reasons.
Did you expect him to say that he was playing political games with the NRC? Give me a break. I agree that maybe economics was leading at that time, but you don't need to play naive with the no-political-interference point.
Today's NRC is very pro-new nuke. So there was likely zero pressure to abandon Bellefonte as TVA did in 2006
I have extensive observations of how such large beurocratic structures like TVA work. They basically don't care much about poor investments and how much resources are wasted. Economic considerations are always second to political considerations. What usually happens is that after a new manager takes the place of an old one, the new one is eager to start things all over in order to prove his policy brings to better results. Large corporations simply don't think and act like small resource constrained companies - they simply don't care. They have huge resources on their disposal and their mismanagement is a rule - not an exception.
If your point is to show that TVA has made poor management decisions I'll join you. If your point is that it is likely that it does it again - I'll join you again. But do you have any alternative suggestions to address the inefficiencies of large corps? Oh, maybe you think if they did wind it would have been different... how sweet.
What does one do with a half finished wind farm ?
One generates electricity with it ! :-)
Just half as much as planned.
Standard procedure (I was told) is to get the the transmission in first or very early for new wind farms. So as each individual wind turbine is erected, it starts generating $.
This is one of the inherent advantages of a Rush to Wind. Short lead times and incremental production during construction.
Alan
It were perhaps one of the largest failures ever?
You were on the road to handle your peak in oil production, significantly lowering your mercury poisoning and make solving the climate change problem significatly easier to solve before it were known and started to go runaway.
It it might have been your cultural leadership that took down several other countries nuclear industries as your reasonable economical and PR reaction to the US failure spread as the leaders ideas use to do.
Fay-lure, to loose the fishing net whose fish your families life depend on if I rember right.