Why conservatives should join the left’s campaign against nuclear power.
Even without the new legislation there’s plenty of federal money being doled out. In September NRG Energy, an energy wholesaler in Princeton, N.J., applied to the Nuclear Regulatory Commission for a license to build and operate a two‐reactor nuclear plant near Bay City, Tex. The NRC is expecting 19 similar applications in the next 18 months. If approved, they will be eligible for loan guarantees under the Energy Policy Act of 2005.
Pro‐nuclear groups herald the coming flood of applications as proof that nuclear energy makes economic sense. Nonsense. The only reason investors are interested: government handouts. Absent those subsidies, investor interest would be zero.
A cold‐blooded examination of the industry’s numbers bears this out. Tufts economist Gilbert Metcalf concludes that the total cost of juice from a new nuclear plant today is 4.31 cents per kilowatt‐hour. That’s far more than electricity from a conventional coal‐fired plant (3.53 cents) or “clean coal” plant (3.55 cents). When he takes away everyone’s tax subsidies, however, Metcalf finds that nuclear power is even less competitive (5.94 cents per kwh versus 3.79 cents and 4.37 cents, respectively).
Nuclear energy investments are riskier than investments in coal‐ or gas‐fired electricity. High upfront costs and long construction times mean investors have to wait years to get their money back. The problem here is not just the cost per watt, several times that of a gas plant, but the fact that nuclear plants are big. Result: The upfront capital investment can be 10 to 15 times as great as for a small gas‐fired turbine.