Nuclear Energy Loan Guarantee Secures Downpayment On Industry's Future

Now that the U.S. Department of Energy has officially committed to a multi-million nuclear loan guarantee, it seems like a re-run of an old movie. If it does, readers are reminded that the “balloons” were first released in 2010 when the agency said it would loan $8.3 billion to help build the first reactors in decades.

The nuclear loan guarantees are similar to those for other burgeoning technologies, albeit it takes a lot more dough to build a nuclear plant than it does to construct wind turbines or solar panels. In all cases, the idea behind them to give good ideas the footing that they need to get going on their own...

While loan guarantees are not subsidies, taxpayers can lose money if projects don’t reach fruition. That’s what happened when solar maker Solyndra failed and the citizenry lost $528 million. Southern’s new nuclear units are now expected to cost $15.5 billion, of which the federal loan will cover more than half...

Georgia Power, a subsidiary of Southern Company, is expanding its existing Vogtle nuclear site by two units that will add 1,100 megawatts each. Besides Southern Co ., the other partners are Oglethorpe Power Corp., the Municipal Electric Authority of Georgia and Dalton Utilities. Georgia Power’s share of the loan is $6.1 billion. If things go as planned, the new units will be producing power in 2018-2019, but that time frame could be delayed.

“Had you seen costs and time lines under control, you would have seen investors come on board,” says Doug Koplow, found of Earth Track. “If it was possible for them to get financing, it would have been on less favorable terms.” The cost of raw materials along with legal expenses have contributed to the cost of business and added at least 15 months to the construction process...