• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • The Economics of Nuclear Energy

    A few weeks back Heritage hosted a briefing on Capitol Hill to discuss the economics of building new nuclear power plants in the United States. The briefing featured Michael Metzner, senior vice president and treasurer for Exelon Corp., and Caren Byrd, executive director of Morgan Stanley’s investment banking division.

    Metzner asserted that the economics “have never been stronger” for nuclear power, but also commented that it would cost between $6 billion and $8 billion to build a new plant, quite a large investment for a firm to make. Byrd noted that, given the shaky history of nuclear in the U.S. (due in large part to the inflexibility that resulted from the nuclear industry becoming too dependent on government and the effective obstructionist tactics employed by anti-nuclear activists), investors are approaching nuclear with caution.

    There is much speculation that the nuclear industry will fail unless it is packaged with a substantial amount of government handouts, but more government funding is not the solution to kicking off a nuclear renaissance. Heritage’s nuclear expert, Jack Spencer, emphasizes a number of policy approaches that would allow the nuclear industry to become sustainable in the long run. Among these is limiting government support to that provided by EPACT 2005. Spencer says:

    EPACT 2005 provides loan guarantees, production tax credits, and risk insurance to the first few nuclear reactors built. Given that the greatest risk to the nuclear industry is government itself, the burden of proof remains with the federal government to demonstrate that it will allow the nuclear industry to mature. Its support through EPACT 2005 should be adequate to achieve this goal so long as it is combined with commitments by Congress and future Administrations to assure political and regulatory stability for the nuclear industry.

    Posted in Energy [slideshow_deploy]

    Comments are closed.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×