Environmental Engineering Reference
In-Depth Information
These relative costs differ greatly from costs in gas- and coal-fi red plants,
where the fuel is the dominant expense. In a gas plant, the fuel is 94
percent of total cost; in a coal plant, the fuel is 78 percent.
2
Uranium
companies in the United States have a percentage depletion allowance of
22 percent (the highest rate of all depletion allowances for minerals),
which gives them a tax write-off for the market value of what they have
extracted—a signifi cant subsidy because the write-off is typically much
greater than their actual investment. The manufacture of the reactor fuel
from the mined mineral has also been heavily subsidized.
The base price for construction of a nuclear power plant in 2009 was
estimated to be $7 billion per kilowatt, sixty-fi ve percent higher than the
price per kilowatt of coal and nearly six times higher than natural gas
and more expensive than solar energy.
3
Moody's, a credit rating agency,
has stated that the costs associated with next-generation nuclear plants
could be signifi cantly higher than the estimates of $3,500 per kilowatt
cited by the industry.
4
It is noteworthy that two next-generation plants
under construction in Finland and France are billions of dollars over
budget. Moody's cautioned that nuclear investment could have a nega-
tive effect on a corporation's credit ratings, a concern that had a chilling
effect on corporate fi nancial offi cers. Bolstering this concern, new nuclear
plant cost estimates for plants designed by Westinghouse had more than
doubled to $12 billion to $18 billion by the end of 2007.
Banks are not willing to loan money for the construction of nuclear
power plants, considering them to be too risky, so the federal govern-
ment has stepped in to prop up the industry. An energy task force estab-
lished by Vice President Dick Cheney in 2001 endorsed the construction
of nuclear power plants, and the administration of President Bush did
what it could to stimulate new construction and licensing. The Energy
Policy Act enacted in 2005 contained large amounts of money for nuclear
tax breaks and loan guarantees. The U.S. government is now offering
incentives worth more than $13 billion as seed money for new nuclear
plant construction. According to an analysis by the nonprofi t group
Public Citizen, the Energy Policy Act includes $2.9 billion for R&D, at
least $3.5 billion in construction subsidies, more than $5.7 billion for
operating subsidies, and $1.3 billion for shutdown subsidies. The package
also includes $2 billion for risk insurance, which allows builders of the
fi rst six reactors to collect for any delays in construction or licensing,
including challenges by the public on grounds of safety. It includes pro-
duction tax credits of 1.8 cents per kilowatt-hour for eight years, an
estimated $5.7 billion to $7.0 billion that would otherwise go to the U.S.
