President Obama to Announce Over $8B in Loan Guarantees for Nuclear

Nuclear energy dominated Bill Gate’s TED talk last week, and this morning it’ll lead the clean power headlines. According to the Associated Press, President Obama today will announce $8.3 billion in federal loan guarantees to build the first nuclear plants in the U.S. in almost three decades. Southern Company will reportedly use the loan guarantees to build two nuclear plants in Burke County, Ga.

Update: Here’s the official press release from Southern Company. Energy Secretary Steven Chu said on a conference call that the this won’t be the last loan guarantee for a nuclear project.

The news comes on the heels of an aggressive stance by the Obama administration to deliver nuclear as part of the “green economy.” Southern Company says its two nuclear reactors will create 3,000 construction jobs and provide 850 permanent jobs. Last month in Obama’s state of the union address Obama said:

[T]o create more of these clean-energy jobs, we need more production, more efficiency, more incentives, and that means building a new generation of safe, clean nuclear power plants in this country.

Obama’s recently announced budget proposal for the DOE included significant support for nuclear power plants and research: a whopping $36 billion in new loan guarantee authority for two new nuclear power facilities (tripling the amount currently available for these guarantees) and $793 million for “a new cross-cutting research program to address technology needs for all aspects of nuclear energy production.”

Last month Obama also created a 15-person commission that will deliver a report that will look at a path forward for nuclear energy in the U.S. power supply. The group is charged with tackling the controversial question of how to deal with nuclear fuel and waste in a safe and environmentally responsible way — delivering an interim report with recommendations within 18 months and a final report six months later.

Growing support for nuclear energy in the U.S. has hinged on three key arguments in recent years: It offers a carbon-free alternative to coal; a domestic alternative to petroleum; and a supposedly cheaper, more reliable alternative to renewable sources like wind and solar. But while nuclear power plants have relatively low operating costs once they’re paid off, new facilities are hugely expensive. According to an analysis from Climate Progress last year, existing nuclear power plant technology can generate electricity at no less than 25- 30 cents per kilowatt-hour for the first year of operation.

The high price tag is why the loan guarantees for Southern Company’s new two reactors is over $8 billion — as opposed to the $535 million loan guarantee for thin film solar maker Solyndra, or even $80 million for biofuel maker Range Fuels.

Expect the news of the first nuclear plants in the U.S. to help spur innovation and add a much needed jolt to the country’s nuclear power industry. Companies like TerraPower have been innovating in this field for years, but have been stalled in an environment where nuclear projects can’t get past the permitting and financing stage. Southern Company’s nuclear projects still need to be approved by the Nuclear Regulatory Commission, which won’t happen before late 2011 or early 2012, reports the Associated Press.

Image courtesy of exquisitur’s photostream Flickr Creative Commons.

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