Tax-payers’ $billions prop up the nuclear industry

*Subsidies at inception, reducing capital costs and operating costs.

*Accounting rules allowing companies to write down capital costs after cost overruns, cancellations and plant abandonments, reducing capital-recovery requirements,

*Recovery of “stranded costs” (costs to a utility’s assets because of new regulations or a deregulated market) passed on to rate payers.

Nuclear Energy Dangerous to Your Wallet, Not Only the Environment, CounterPunch, by PETE DOLACK , 1 JAN 16 The ongoing environmental disaster at Fukushima is a grim enough reminder of the dangers of nuclear power, but nuclear does not make sense economically, either. The entire industry would not exist without massive government subsidies.

Quite an insult: Subsidies prop up an industry that points a dagger at the heart of the communities where ever it operates. The building of nuclear power plants drastically slowed after the disasters at Three Mile Island and Chernobyl, so it is at a minimum reckless that the latest attempt to resuscitate nuclear power pushes forward heedless of Fukushima’s discharge of radioactive materials into the air, soil and ocean.

There are no definitive statistics on the amount of subsidies enjoyed by nuclear power providers — in part because there so many different types of subsidies — but it amounts to a figure, whether we calculate in dollars, euros or pounds, in the hundreds of billions. Quite a result for an industry whose boosters, at its dawn a half-century ago, declared that it would provide energy “too cheap to meter.”

Taxpayers are not finished footing the bill for the industry, however. There is the matter of disposing radioactive waste (often borne by governments rather than energy companies) and fresh subsidies being granted for new nuclear power plants. None of this is unprecedented — government handouts have the been the industry’s rule from its inception.A paper written by Mark Cooper, a senior economic analyst for the Vermont Law School Institute for Energy and the Environment, notes the lack of economic viability then:

“In the late 1950s the vendors of nuclear reactors knew that their technology was untested and that nuclear safety issues had not been resolved, so they made it clear to policymakers in Washington that they would not build reactors if the Federal government did not shield them from the full liability of accidents.” [page iv]

Nor have the economics of nuclear energy become rational today. A Union of Concerned Scientists paper, Nuclear Power: Still Not Viable Without Subsidies, states:

“Despite the profoundly poor investment experience with taxpayer subsidies to nuclear plants over the past 50 years, the objectives of these new subsidies are precisely the same as the earlier subsidies: to reduce the private cost of capital for new nuclear reactors and to shift the long-term, often multi-generational risks of the nuclear fuel cycle away from investors. And once again, these subsidies to new reactors—whether publicly or privately owned—could end up exceeding the value of the power produced.” [page 3]

The many ways of counting subsidies

Among the goodies routinely given away, according to the Concerned Scientists, are:

*Subsidies at inception, reducing capital costs and operating costs.

*Accounting rules allowing companies to write down capital costs after cost overruns, cancellations and plant abandonments, reducing capital-recovery requirements,

*Recovery of “stranded costs” (costs to a utility’s assets because of new regulations or a deregulated market) passed on to rate payers.

Yes, you read that last item correctly. Even when the energy industry receives its wish to be rid of regulation, it is entitled to extra money because of the resulting rigors of market pressures.

The amount of government subsidies for nuclear (and for oil and gas) is far greater than that for solar energy, despite Right-wing attempts to exploit the Obama administration’s generous loan guarantees to failed California solar-panel manufacturer Solyndra. A primary source for Right-wing disinformation campaigns against renewable energy appears to be a report by the U.S. Energy Information Agency that lists direct federal government subsidies to renewables as significantly larger than for nuclear or for natural gas and petroleum liquids for fiscal years 2007 and 2010.

The report, prepared at the behest of three hard-line Republican members of the House of Representatives, was narrowly focused, and notes that it “do[es] exclude some subsidies.” And, as a snapshot, the decades of previous handouts to nuclear, oil and gas companies are not accounted for. Nor does the Energy Information Agency report account for legacy costs — solar and wind power, for example, do not leave behind tons of radioactive waste as does nuclear energy.

Numerous research papers paint a fuller picture. A Congressional Research Service report found that nuclear power had received $74 billion for research and developmentby the U.S. government for the period 1948 to 1998, more than all such money given for fossil fuels, renewables and energy efficiency combined.

A report by the venture-capital firm DBL Investors, Ask Saint Onofrio, reports that nuclear energy cumulatively has received four times more subsidies than solar energy in California, and that nuclear subsidies were higher than solar in 2011 and all previous years. Nuclear has received $8.2 billion in subsidies in California, while providing the state with three percent of its power in 2012.

The uneconomical state of nuclear power is a global phenomenon, not limited to any one place. A comprehensive study prepared for the Green Party of Germany’s Heinrich Böll Stiftung, The Economics of Nuclear Power: An Updatereports:

“Up to now, nuclear power plants have been funded by massive public subsidies. For Germany the calculations roughly add up to over 100 billion Euros and this preferential treatment is still going on today. As a result the billions set aside for the disposal of nuclear waste and the dismantling of nuclear power plants represent a tax-free manoeuvre for the companies. In addition the liability of the operators is limited to 2.5 billion Euros — a tiny proportion of the costs that would result from a medium-sized nuclear accident.”

The paper later says: “Successive studies by the British government in 1989, 1995, and 2002 came to the conclusion that in a liberalised electricity market, electric utilities would not build nuclear power plants without government subsidies and government guarantees that cap costs. In most countries where the monopoly status of the generating companies has been removed, similar considerations would apply.”

New plants are being built, with new subsidies………


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: