Comments on: Less Is More for Energy In Bush’s Budget http://blog.heritage.org/2008/02/04/less-is-more-for-energy-in-bushs-budget/ Tue, 14 Feb 2012 19:53:39 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Cash, California http://blog.heritage.org/2008/02/04/less-is-more-for-energy-in-bushs-budget/#comment-10270 Cash, California Thu, 04 Dec 2008 05:27:14 +0000 http://www.foundry.org/2008/02/04/less-is-more-for-energy-in-bushs-budget/#comment-10270 Conn, Interesting article and a good point about DOE´s shortcomings as a research institution. I had one thought on your last sentence which suggests the federal govt should lessen its role in nuclear. In April I was at MIT´s Energy Conference and they had a panel from various aspects of the nuclear industry (utility, regulatory, finance). One of their key messages was that the lack of financing was a major, if not largest, hurdle to development. Keep in mind this was prior to the cost of capital having shot up worldwide in the past few months. And they also pointed out that compared to the EU, American utilities are much smaller and cannot reasonably be expected to fully fund a nuclear projects because a single plant would make up such a significant part of their balance sheet. They also pointed to the 2005 Energy Act which has a $500M loan guarantee from the Federal government for nuclear projects, and although they acknowledged this as the right direction, it didn´t move the needle much on a $8-9B project. Video link is here: <a href="http://techtv.mit.edu/collections/mitenergyconference/videos/56-nuclear-power-will-there-be-6-or-60-new-plants-in-the-us" rel="nofollow">http://techtv.mit.edu/collections/mitenergyconfer...</a> So my question is, if indeed the private sector is expected to fully fund these enormous projects, especially now when the cost of capital is so high, how do you see them accomplishing this? Conn,

Interesting article and a good point about DOE´s shortcomings as a research institution.

I had one thought on your last sentence which suggests the federal govt should lessen its role in nuclear. In April I was at MIT´s Energy Conference and they had a panel from various aspects of the nuclear industry (utility, regulatory, finance). One of their key messages was that the lack of financing was a major, if not largest, hurdle to development. Keep in mind this was prior to the cost of capital having shot up worldwide in the past few months.

And they also pointed out that compared to the EU, American utilities are much smaller and cannot reasonably be expected to fully fund a nuclear projects because a single plant would make up such a significant part of their balance sheet. They also pointed to the 2005 Energy Act which has a $500M loan guarantee from the Federal government for nuclear projects, and although they acknowledged this as the right direction, it didn´t move the needle much on a $8-9B project.

Video link is here:
http://techtv.mit.edu/collections/mitenergyconfer…

So my question is, if indeed the private sector is expected to fully fund these enormous projects, especially now when the cost of capital is so high, how do you see them accomplishing this?

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