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Administration plans loan ‘kick-start’ for nuclear plants
Georgia project would be first new U.S. reactors in decades
Clearing a key hurdle to the construction of the nation’s first new nuclear power plants in some three decades. Energy Secretary Ernest Moniz confirmed Wednesday the Obama administration will make available billions of dollars in federal loan guarantees to support private construction efforts.
Southern Co. will build two new nuclear reactors at Vogtle Electric Generating Plant near Waynesboro, Ga. Mr. Moniz, who is expected to travel to Georgia Thursday to mark the occasion, said private companies such as Southern were critical to reviving the nation’s nuclear sector.
“This was again in the spirit of the ‘first-mover’ challenge of getting some new nuclear plants built,” he said.
By granting companies the loan guarantees, the DOE hopes to spark increased private investment to take energy to a commercial level, Mr. Moniz said.
“That’s again the nature of the program that we are trying to do: Kick-start, get those first movers out there and then have the private sector come in,” Mr. Moniz said.
In 2010, the Energy Department extended conditional commitments for $8.3 billion in three different loan guarantees to Atlanta-base Southern Co. The guarantees will lower borrowing costs for the company, saving Georgia electric customers about $200 million, Southern Chief Executive Officer Tom Fanning told analysts in an earnings call late last month. The two loans will be given to Southern’s Georgia Power and project partner Oglethorpe Power Co. The third $1.8 billion loan is still being negotiated with another partner, Municipal Electric Authority of Georgia.
The revival of the U.S. nuclear energy sector is not without controversy, given the difficult economics of the energy sector and a string of safety incidents from Three Mile Island and Chernobyl to the fallout from Japan’s Fukushima Daiichi nuclear disaster in 2011.
While critics say the Obama administration’s energy policy has been hostile to fossil fuels and especially coal, Mr. Moniz said the loan guarantees and the “first-mover” approach fit with Mr. Obama’s “all-of-the-above” energy policy designed to lessen U.S. dependence on foreign energy sources and increasing the use of “clean energy” technologies.
“Note that ‘all of the above’ is not a slogan, it’s a policy and a pathway to creating jobs, and at the same time, reducing carbon emissions,” Mr. Moniz said.
According to the Associated Press, Southern Co. is building the plant with several partners about 30 miles southeast of Augusta, Ga. The project is widely considered a major test of whether the industry can build nuclear plants without the endemic delays and cost overruns that plagued earlier rounds of building in the 1970s. Vogtle was originally estimated to cost around $14 billion, but government auditors warn the final tab could be much higher.
More than two dozen nuclear reactors have been proposed in recent years, but experts now say it is likely that only five or six new reactors will be completed by the end of the decade.
• This article was based in part on wire service reports.
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