Obama advances nuclear resurgence with US loan guarantees
In announcing $8.3 billion in loan guarantees for the first new nuclear reactors in the US in 30 years, Obama is setting the stage for a nuclear power comeback. But many challenges lie ahead.
President Obama announced Tuesday that his administration has agreed to provide an $8.3 billion loan guarantee for an Atlanta-based utility and its partners to build two new nuclear reactors at its Vogtle generating station near Augusta, Ga.Skip to next paragraph
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The announcement comes at a time when the administration is seeking to reduce America's dependence on fossil fuels – a critical step in combating global warming – and in an economic climate hungering for job creation.
The loan guarantee is conditional. It hinges on the utility, the Southern Co., receiving a license from the US Nuclear Regulatory Agency to build and operate the new reactors. Based on the current timeline, the utility expects to receive its license during the second half of 2011, says David Ratcliffe, its chairman and chief executive officer.
With an estimated construction cost of $14 billion, the new reactors would add a combined 2,200 megawatts of generating capacity to augment the two reactors that have been operating at the Vogtle nuclear plant since 1987 and 1989. These two reactors are rated at 1,100 megawatts apiece.
In announcing the effort during a visit to a union job-training facility in Lahnam, Md., Mr. Obama acknowledged lingering concerns over the safety and reliability of nuclear energy as well as the need to solve the longstanding problem of disposing of highly radioactive waste from nuclear plants.
Still, he said, "investing in nuclear energy remains a necessary step" in weaning the United States from its dependence on fossil fuels for energy.
Nuclear reactors generate roughly 20 percent of the nation's electricity but represent 70 percent of the carbon-free energy it produces, the Obama administration said Tuesday. Thus, nuclear power represents one important approach to reducing reliance on fossil fuels, the main contributor to global warming, supporters say.
Moreover, the White House estimates this project will lead to 3,500 construction jobs and 800 long-term jobs once the reactors begin operation.
Nuclear industry representatives hailed the administration's move.
Marvin Fertel, president and chief executive officer of Washington’s Nuclear Energy Institute, called it "a major milestone" in providing loan guarantees under a program established in the Energy Policy Act of 2005.
Beyond the $8.3 billion for the new reactors, the White House is asking for an additional $36 billion for the nuclear loan-guarantee program in its fiscal 2011 budget proposal, according to US Secretary of Energy Steven Chu.
Others are less enthusiastic. Preparing to boost loan guarantees by $36 billion could end up pouring good money after bad, skeptics argue.
The guarantees represent money for "a limited set of reactors from a small number of first-movers," says Ellen Vankco, a specialist on energy issues with the Union of Concerned Scientists in Washington.