DOE Backs 2nd Nuclear Project with Loan Guarantee

Looks like the Department of Energy is making good on its plan to dole out $54.5 billion in loan guarantees to build nuclear power in the U.S. On Thursday afternoon the DOE said it has offered a $2 billion loan guarantee to French nuclear giant AREVA to help it build its uranium enrichment facility in Idaho that will provide uranium services to the nuclear power industry. Loan guarantees serve essentially as promises by the government to back a loan if the company can’t make good on it.

This is the second nuclear loan guarantee that the DOE has allocated for nuclear and in February the DOE announced $8.3 billion in loan guarantees to Southern Company to build two nuclear plants in Burke County, Ga., which will be the first nuclear plants in the U.S. in almost three decades. The President budget requested to boost the loan guarantee program for nuclear by $36 billion from the previous budget.

Energy Secretary Steven Chu said today that the AREVA facility — called the Eagle Rock Enrichment Facility near Idaho Falls, Idaho — will provide uranium enrichment services to U.S. nuclear plants that will com online as early as 2016. The U.S. currently gets a whopping half of its enriched uranium from Russia through a program that turns former nuclear weapons grade uranium into usable uranium for power, and which will end in 2013. So clearly the U.S. will soon need other sources of enriched uranium.

The Eagle Rock plant will use centrifuge technology for enrichment, which the DOE says uses 95 percent less electricity than the more standard gaseous diffusion process. While this will only be the second facility in the U.S. to use this technology, it’s been used in Europe for decades. The plant will cost $3.3 billion to build, will create 1,000 jobs, and will need to get a license from the Nuclear Regulatory Commission to proceed with the project.

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