Experience has shown that the construction of nuclear reactors takes longer and costs more than initial estimates. For these reasons, private investors have not been interested in backing new nuclear construction without federal loan guarantees, placing most of the financial risk and burden of default on U.S. taxpayers. Furthermore, nuclear energy today relies on technologies and a system of national governance of the nuclear fuel cycle that carry substantial risks of nuclear weapons proliferation. Policymakers are faced with weighing the challenges of ensuring responsible use of taxpayer dollars and preventing nuclear weapons proliferation when considering new nuclear reactors as a climate solution.
On May 20, 2010, the Environmental and Energy Study Institute (EESI) held a briefing to examine what the economic and proliferation risks of new nuclear reactors mean for nuclear power’s role in addressing climate change. Many U.S. policymakers believe nuclear energy will play a critical role in future power generation, especially if legislation is passed that places a price on carbon. In fact, the Senate climate legislation released on May 12 includes $54 billion in loan guarantees and other subsidies for the new construction of nuclear reactors. Additionally, the U.S. Department of Energy recently offered an $8.3 billion loan guarantee for the two reactors to be built in Georgia (the utility has yet to accept the guarantee). President Obama’s FY 2011 budget requests an additional $36 billion in loan guarantee authority for new reactors. Yet new reactors entail serious financial and proliferation risks. This briefing addressed what ramping up nuclear power production to address climate change would mean for U.S. taxpayers and national security.
- Cost estimates for nuclear construction in both the 1970s and today exhibit a pattern of low initial cost projections that are later replaced by much higher costs as hurdles to construction arise. Early estimates are often projected by vendors that are inclined to underestimate costs.
- By investing in energy efficiency and renewable energy, the United States can get to 2040 without building a new central station for electricity. When compared to nations in continental western Europe, the United States consumes 50 percent more electricity per capita while enjoying the same standard of living.
- Many people argue to "use everything" when it comes to low-carbon energy sources (e.g. energy efficiency, renewable energy, nuclear), but choosing nuclear often means there are few resources available for other technologies. Not only are nuclear reactors more expensive to construct, but when utilities decide to invest in them, it creates a disincentive to reduce electricity demand.
- In May 2009, there were 18 licensing applications for U.S. nuclear reactors under review, with four more expected by the end of 2010. One year later, there remain 17 applications listed "on file," and nearly all have combined cancellation or suspension or prolonged delay with major cost overruns.
- Loan guarantees do not make nuclear reactors cheaper, but allow cheaper borrowing by shifting risk from investors to taxpayers. Thus, the $8.3 billion conditional loan guarantee recently offered to two new reactors in Georgia represents an exposure to new risk of about $100 for every U.S. family.
- The proposed American Power Act by Sens. John Kerry (D-MA) and Joe Lieberman (I-CT) would allow safety hearings, environmental protections, Nuclear Regulatory Commission inspections to be cut back in order to expedite the nuclear reactor licensing process.
- When looking at proliferation risks associated with nuclear reactors, the domestic nuclear supply is often given little consideration.
- The United States has not reprocessed spent nuclear fuel since the 1970s, but provisions in the American Power Act would support building this up. France, India, Japan and Russia (and potentially China) are also pursuing reprocessing fuel. As nuclear weapon stockpiles are disarmed, the supply of separated plutonium is now increasingly in under civilian control.
- Characteristics of centrifuge technology allow for rapid breakout and make it easy to hide. Dr. Alex Glaser from Princeton University suggested that the once-through fuel cycle become the norm again and advocated for a new multilateral framework for the nuclear life cycle.