WASHINGTON – Will a heaping spoonful of nuclear power help Congress swallow a climate bill?
The Obama administration and leading congressional Democrats are wooing wavering Democrats and Republicans to back a climate bill by dangling federal tax incentives and new loan guarantees for nuclear power plant construction, even though financial analysts warn that huge capital needs and a history of cost overruns would constrain what many lawmakers hope will be a “nuclear renaissance.”
The elements of a nuclear package under discussion include: investment tax credits; a doubling or more of the existing $18.5 billion in federal loan guarantees for new plants; giving nuclear plants access to a new clean energy development bank; federally financed training for nuclear plant workers; a new look at reprocessing nuclear fuel; and a streamlining of the regulatory approval process, according to corporate, congressional and administration sources.
Designed to put nuclear power on an even footing with wind and solar, the package comes on top of existing incentives, such as the production tax credit.
“It seems to me that when talking about ways to reduce emissions … that nuclear comes first,” said Sen. Lisa Murkowski, R-Alaska, ranking Republican on the Senate Energy and Natural Resources Committee. Some GOP leaders like Sen. Lamar Alexander, R-Tenn., want any climate bill to include plans for 100 new nuclear plants – doubling the current fleet – by 2030.
Even relatively liberal lawmakers such as Sen. Mark Udall, D-Colo. are talking about the need to insert nuclear power incentives into a climate bill. President Obama has said he is open to new nuclear plants. And Energy Secretary Steven Chu has said that the country should “not stop at three or four, but should get tens of (new) reactors.”
Asked how many Republicans could be won over to a climate bill with a substantial nuclear power provision, Sen. Lindsay Graham, R-S.C., said: “At least half a dozen, depending on how this issue comes out. Maybe more.” And, he added, “you’re not going to get a bill without meaningful Republican participation.”
Graham, who recently joined Sen. John Kerry, D-Mass., in issuing a list of common principles for a climate bill, including new nuclear incentives, said that “people who are involved in writing this bill need to grasp the fact that America’s turned the corner on nuclear power.”
But financial analysts and utility executives warn that while a package of federal tax and regulatory incentives might jump-start a few new nuclear plants, it will be nowhere near enough to lead to 100 facilities.
“That’s $1 trillion,” said Aneesh Prabhu, a credit analyst for nuclear utilities at Standard & Poor’s. “Some people say that by 2030 you could have quite a few going, but 100 is not feasible. … The most optimistic number I’ve read is 50 of them by 2035 – and that’s the most optimistic number. … That’s from the perspective of financing.”
The nuclear ambitions of GOP lawmakers exceed those of the nuclear power industry itself. “Industry’s expectations are colored perhaps by knowing too much,” said one utility executive. Building 100 plants “would be extremely difficult, extremely difficult,” he said.
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