Nuclear option

20 May 2010 By Christopher Swann

The latest efforts to get people building nuclear power plants involve a hodgepodge of subsidies. But these won’t overcome the cost advantages of fossil fuels especially with gas prices so low. Unless, that is, America adopts an unexpectedly beefy levy on greenhouse gases.

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John Rowe, chairman and chief executive of U.S. energy group Exelon, said on May 12 that carbon dioxide emissions from traditional fossil fuel power plants would need to be priced at around $100 per metric ton to enable new nuclear plants to break even.

In a speech in Washington on May 12, Rowe said Exelon, the largest nuclear power provider in the United States, had no plans to build more nuclear plants. "Cheap natural gas and low power demand dramatically increase the cost differential between economically efficient options and the inefficient ones," he said.

A bill proposed by Senators John Kerry and Joe Lieberman on May 12 would levy a tax on carbon dioxide starting at $12 a ton and up to a ceiling of $25. After 2013 the ceiling would rise at 5 percent above the rate of inflation each year.

The bill would also boost the loan guarantees available to build new nuclear plants to $54 billion, up from $18.5 billion. Nuclear facilities are characterized by massive upfront capital costs, though operating costs are low.

Construction on the last nuclear reactor to be completed in the United States began in 1973, and it started generating electricity in 1996.

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