The Real Story: Nuclear Reactors Are Sub-Prime Energy
Prepared by Michelle Boyd, Director of the Safe Energy Program, with Physicians for Social Responsibility
The push for new nuclear reactors that's at the core of the energy debate - and the enormous loan guarantees industry demands to build them - will expose taxpayers to hundreds of billions of dollars to risk. With the market in meltdown because of bad loans, the idea of taxpayers taking on more bad debt should be radioactive. Any story about the nuclear power debate needs to include key points about the economics: nuclear reactors are the ultimate sub-prime energy.
New Reactors = More Taxpayer Bailouts
- Nuclear reactors are extremely expensive. The cost of building a reactor has risen at least as high as $6,000 per kW according to industry figures, and $7,000 per kW according to the credit rating agency Moody's. That means a 1,600 megawatt reactor would cost more than $9.6 billion.
- The nuclear industry says that it won't build without taxpayers promising to bail them out when they fail. Just to cover 21 proposed reactors, the nuclear industry is demanding $122 billion in federal loan guarantees. Loan guarantees are promises that US taxpayers will pay back the loans when the project fails.
- The risk of loan defaults is extraordinarily high. The Congressional Budget Office estimates that 50 percent of all new reactor projects are likely to default - that's worse than anything AIG ever insured, or Lehman Brothers on its worst day. For the 21 current applications for loan guarantees, U.S. taxpayers would be forced to bail out the nuclear industry for at least $61 billion.
Nuclear Power is Not a Jobs Program
- Some have claimed that building 45 new nuclear reactors by 2030 would create 700,000 new jobs in the U.S. That wildly exceeds the industry's own figures. According to sworn testimony by UniStar Nuclear executives before the Maryland Public Service Commission, a 1,600 MW reactor (the largest size being proposed in the US) would create a maximum of 4,000 short-lived construction jobs and 360 permanent jobs. For 45 new reactors, that would mean 180,000 temporary jobs and 16,200 permanent jobs - four times fewer jobs than claimed.
- Nuclear jobs are extremely expensive to create. Based on the estimated costs for new reactors, this works out to an investment cost of $2.2 million per job.
- Renewable energy and energy efficiency creates far more jobs and far cheaper than nuclear power. In 2006 alone, 8.5 million new jobs were created, according to the American Solar Energy Society.
Nuclear Is No Solution to Climate Change
• Climate change requires that we act in the most cost-effective manner, and quickly. Nuclear power is not only expensive, it is slow to deploy. According to physicist Amory Lovins, every dollar put into efficiency is up to seven times more effective at reducing carbon emissions than a dollar put into nuclear power. A single new nuclear reactor will take at least 10 years to license and construct, while energy efficient products can start saving energy immediately. Wind farms and solar panels can be operational in several months to a couple of years.
• Reactors rely on huge volumes of water for cooling. During droughts, which are expected to become more frequent and intense due to global warming, insufficient water supplies mean reactors to have to be shut down. During the heat wave of 2003, 17 French reactors were forced to power down or shut down completely as river water temperatures rose. During the 2006 heat wave in the US, reactors in Michigan, Pennsylvania, Illinois, and Minnesota had to either reduce output or be shut down.
• During heat waves, reactors may need to discharge hotter water. This can be harmful to river ecosystems, which cannot maintain healthy aquatic life above a certain temperature. During the 2003 heat wave in France, air temperatures at nuclear reactors came within two degrees of requiring emergency shutdown. In an attempt to cool the reactor, employees used garden hoses to spray cold water on the outside walls of the reactors.
France Is No Model
• The French prototype reactor has been plagued with cost overruns and delays - yet it is being proposed at 6 sites in theU.S. One reactor currently under construction in Finland was budgeted for $4 billion, but it is over two years behind schedule and costs have already increased to $6 billion . The same design under construction in France has also experienced technical errors and safety flaws and is already 9 months behind schedule.
• France, like the U.S., has not solved its nuclear waste problem with "reprocessing" (the separation of plutonium from a spent fuel rod). It hasn't eliminated or even reduced the amount of waste that must go into a geologic repository, which itself faces public opposition just like Yucca Mountain in Nevada. In addition, reprocessing has polluted the environment, including the ocean - and has created a stockpile of more than 80 metric tons of separated plutonium, a serious proliferation threat because separated plutonium is much easier to steal than plutonium in a spent fuel rod.
• Reprocessing is also dangerous for the taxpayer pocketbook. The National Academy of Sciences has estimated that reprocessing in the U.S. could cost as much as the recent bailout - more than $700 billion. The U.S. nuclear industry has made it clear that it has no intention of paying for reprocessing itself.
Prepared by Michele Boyd, director of the Safe Energy Program with Physicians for Social Responsibility
The push for new nuclear reactors that's at the core of the energy debate - and the enormous loan guarantees industry demands to build them - will expose taxpayers to hundreds of billions of dollars to risk. With the market in meltdown because of bad loans, the idea of taxpayers taking on more bad debt should be radioactive. Any story about the nuclear power debate needs to include key points about the economics: nuclear reactors are the ultimate sub-prime energy.
New Reactors = More Taxpayer Bailouts
- Nuclear reactors are extremely expensive. The cost of building a reactor has risen at least as high as $6,000 per kW according to industry figures, and $7,000 per kW according to the credit rating agency Moody's. That means a 1,600 megawatt reactor would cost more than $9.6 billion.
- The nuclear industry says that it won't build without taxpayers promising to bail them out when they fail. Just to cover 21 proposed reactors, the nuclear industry is demanding $122 billion in federal loan guarantees. Loan guarantees are promises that US taxpayers will pay back the loans when the project fails.
- The risk of loan defaults is extraordinarily high. The Congressional Budget Office estimates that 50 percent of all new reactor projects are likely to default - that's worse than anything AIG ever insured, or Lehman Brothers on its worst day. For the 21 current applications for loan guarantees, U.S. taxpayers would be forced to bail out the nuclear industry for at least $61 billion.
Nuclear Power is Not a Jobs Program
- Some have claimed that building 45 new nuclear reactors by 2030 would create 700,000 new jobs in the U.S. That wildly exceeds the industry's own figures. According to sworn testimony by UniStar Nuclear executives before the Maryland Public Service Commission, a 1,600 MW reactor (the largest size being proposed in the US) would create a maximum of 4,000 short-lived construction jobs and 360 permanent jobs. For 45 new reactors, that would mean 180,000 temporary jobs and 16,200 permanent jobs - four times fewer jobs than claimed.
- Nuclear jobs are extremely expensive to create. Based on the estimated costs for new reactors, this works out to an investment cost of $2.2 million per job.
- Renewable energy and energy efficiency creates far more jobs and far cheaper than nuclear power. In 2006 alone, 8.5 million new jobs were created, according to the American Solar Energy Society.
Nuclear Is No Solution to Climate Change
• Climate change requires that we act in the most cost-effective manner, and quickly. Nuclear power is not only expensive, it is slow to deploy. According to physicist Amory Lovins, every dollar put into efficiency is up to seven times more effective at reducing carbon emissions than a dollar put into nuclear power. A single new nuclear reactor will take at least 10 years to license and construct, while energy efficient products can start saving energy immediately. Wind farms and solar panels can be operational in several months to a couple of years.
• Reactors rely on huge volumes of water for cooling. During droughts, which are expected to become more frequent and intense due to global warming, insufficient water supplies mean reactors to have to be shut down. During the heat wave of 2003, 17 French reactors were forced to power down or shut down completely as river water temperatures rose. During the 2006 heat wave in the US, reactors in Michigan, Pennsylvania, Illinois, and Minnesota had to either reduce output or be shut down.
• During heat waves, reactors may need to discharge hotter water. This can be harmful to river ecosystems, which cannot maintain healthy aquatic life above a certain temperature. During the 2003 heat wave in France, air temperatures at nuclear reactors came within two degrees of requiring emergency shutdown. In an attempt to cool the reactor, employees used garden hoses to spray cold water on the outside walls of the reactors.
France Is No Model
• The French prototype reactor has been plagued with cost overruns and delays - yet it is being proposed at 6 sites in theU.S. One reactor currently under construction in Finland was budgeted for $4 billion, but it is over two years behind schedule and costs have already increased to $6 billion . The same design under construction in France has also experienced technical errors and safety flaws and is already 9 months behind schedule.
• France, like the U.S., has not solved its nuclear waste problem with "reprocessing" (the separation of plutonium from a spent fuel rod). It hasn't eliminated or even reduced the amount of waste that must go into a geologic repository, which itself faces public opposition just like Yucca Mountain in Nevada. In addition, reprocessing has polluted the environment, including the ocean - and has created a stockpile of more than 80 metric tons of separated plutonium, a serious proliferation threat because separated plutonium is much easier to steal than plutonium in a spent fuel rod.
• Reprocessing is also dangerous for the taxpayer pocketbook. The National Academy of Sciences has estimated that reprocessing in the U.S. could cost as much as the recent bailout - more than $700 billion. The U.S. nuclear industry has made it clear that it has no intention of paying for reprocessing itself.
Prepared by Michele Boyd, director of the Safe Energy Program with Physicians for Social Responsibility