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Taxpayers and the Obama nuclear agenda
The Obama administration, yesterday, pledged $8.3 billion, taxpayer backed loan guarantee to support the construction of two nuclear reactors in Georgia. This would represent activity on the first new U.S. nuclear plants in more than three decades at a time we do not have any money to loan.
The monies are being loaned with a condition - the amount of credit subsidy that nuclear developers must pay to the government to cover the risk that a project is not completed and the government has to repay the project's lenders. Industry officials have said an upfront credit subsidy payment of 1 to 2 percent of the loan amount would be manageable, but a significantly higher number would kill the proposed new reactor projects.
Simply stated this, condition to be worked out, removes the free-market investor from the risk side of the equation and transfers it to the taxpayer if the nuclear projects were to default.
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This excerpted and edited from The New York Times -
DOE Delivers Its First, Long-Awaited Nuclear Loan Guarantee
By PETER BEHR of ClimateWire - Published: February 17, 2010
Administration climate adviser Carol Browner said yesterday that the Energy Department's preliminary commitment to Southern Co. and its partners in the $14 billion Plant Vogtle development was hopefully "the first of many new nuclear projects."
Yesterday's anticipated announcement produced the political anomaly of a Democratic president being cheered by the nuclear power industry for supporting nuclear's long hoped-for revival, while being condemned by nuclear power opponents on the left for putting billions of taxpayer money at risk. The program stalled during the Bush administration, and Southern Co. CEO David Ratcliffe said yesterday that there were times he lost hope for it.
The guarantee "is a dirty and dangerous distraction from the clean-energy future the president promised America," said Jim Riccio, nuclear policy analyst at Greenpeace.
The administration's unreserved backing of a group of advanced design reactor projects reflects the conviction of President Obama and key aides that the nation cannot reach its goals for reducing carbon emissions from power plants without a bigger contribution from nuclear power, officials say.
Southern and its partners, Oglethorpe Power Corp., the Municipal Electric Authority of Georgia, and Dalton Utilities, have 90 days to conclude the agreement announced yesterday. The guarantees would not take effect until the NRC approves operating licenses for the reactors.
Doug Koplow of Earth Track Inc., in a paper published last year by the Nonproliferation Policy Education Center, said loan guarantees could reduce nuclear plant financing costs by $500 million a year. "These savings are not 'free' money, as the industry likes to portray them," he said. "Quite the contrary: the savings to a specific industrial facility arise because their business risk is being moved from the investors who will profit from the new reactor to ... taxpayers. It is clearly a good deal for the nuclear industry; far less clear is how the taxpayer is benefiting."
Nuclear power critics assert that there is a substantial risk that the new projects will default, citing a Congressional Budget Office study that estimated a 50 percent likely failure rate. The CBO study, however, was made in 2003, before the loan guarantee program was created. The failure rate calculation assumes that nuclear power from new plants could not complete economically against generating plants fired by coal or natural gas. It did not consider whether future climate policies would make coal or natural gas generation more expensive, or whether environmental regulations would force the closure of coal plants.
The biggest risk for the investor and the taxpayer is not if a nuclear power plant goes into default ... however large this may become. The biggest risk comes as to where does one would put the nuclear waste now that the Obama Administration has shut down the only site where the nuclear waste could be deposited - Yucca Mountain, Nevada.
So, the Obama Administration fronts our money to promote nuclear development and prime the pump but PLUGS the valve on the waste this completed development would create thereby insuring a default of process!
And as the last sentence of the article reference states --- "It [the taxpayer loan commitment] did not consider whether future climate policies [of Carol Browner and the Obama Administration's EPA] would make coal or natural gas generation more expensive, or whether environmental regulations would force the closure of coal plants.
This nuclear agenda all adds up to a chaos being created in our country's energy sector by the Obama Administration to pair up with the chaos they have already created in our economic sector. Even Carter could not envision this kind of subversive control and command of chaos on behalf of the progressive/liberal political agenda!