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  • Demand for Nuclear Rises

    Everyone wants a piece of the nuclear action. The people want nuclear power; a poll a few months back reported that 2 out of 3 Americans favor building new nuclear plants in the U.S. Recognizing the long-term benefits nuclear can provide, many companies are chomping at the bit to provide nuclear for them.

    For instance, Electricite de France (EDF) bid to purchase Constellation Energy, a major player in the nuclear market, which was nearly $10 more a share than the next highest bidder, Warren Buffet’s MidAmerican Energy.

    Yes, the upfront costs of getting into (or expanding) the nuclear business is significant, but that isn’t stopping major international investors from recognizing nuclear’s benefits. Whether it is building new plants or snapping up nuclear companies that hit the market, the fact is that nuclear power can produce clean, affordable energy for decades and that is attractive to investors.

    Bidding wars over nuclear companies is nothing new. In 2005, Westinghouse, a major player in the nuclear business, was put up for sale. While the initial price tag was around $1.5 billion, in January of 2006 Toshiba announced it purchased the company for $5.4 billion. In the end, buyers had high hopes for the deployment of its AP1000 pressurized water reactor and were betting on the general push for nuclear in the future. Constellation’s nuclear play is likely a reason for the attractiveness of that company as well.

    As these purchases and mergers move ahead, it is important that the private sector be allowed to assess the real risk associated with their moves. Either way, it shouldn’t be up to us or the government to decide, it should be up to these companies to take the risk or if they feel the reward is worth it.

    If we take away anything from this financial crisis, it’s that the government shouldn’t be involved in the financial decisions made by private firms. This means getting rid of the subsidies for all energy sources. When the government becomes a sponsor, the profits are privatized while the losses are socialized, meaning the burden falls on the taxpayer. The policies our government should focus on are: 1.) Fixing the issue of nuclear waste 2.) Creating a stable regulatory environment.

    Fast-tracking the permitting process would be a useful first step in creating a stable regulatory regime. Heritage Research Fellow Jack Spencer outlines steps Congress can take here.

    Posted in Energy [slideshow_deploy]

    3 Responses to Demand for Nuclear Rises

    1. Steven Dolley says:

      All potential "first movers" to build new US nuclear units have stated that they will REQUIRE federal DOE loan guarantees to insure their investment. Or they will not build them. Where does this leave the free market approach?

    2. JMD says:

      In response to Steven Dolley, if I were an industry that had been screwed by the government as many times as the nuclear industry has, I'd want my investment guaranteed as well.

      Furthermore, those loan guarantees are part of The Energy Policy Act of 2005 (EPAct05) and all the nuclear industry "demanding" was to get the same consideration as other "clean" energies in the bill. (EPAct05 provides assistance for: Biomass, Hydrogen, Solar, Wind and Hydropower, and other "clean" technologies).

      However, I agree with the author. Best to not have an EPAct05 at all; best not to subsidize boondoggles such as wind and solar or any other scam; best to let the free market deliver WITHOUT the idiot government interfering.

    3. Thomas Gray, South C says:

      Mr Steven Dolley,

      I note your fraise ,,, first movers ,,, and take as a given you are against the advancement of atom power and instead support wind and solor that cannot replace our current electric supply system any time soon,

      the cost of building and installing the system you support and the energy needed to build it is not currently acceptable to me. However the current system must add atom power since fossil fuel use is what is driving up the cost of electricity,,

      if we can advance atom power the cost of electricity at the least would stabilize, if we don't here's the news, fossil fuel use is a 'dead end' for long term energy supply use.

      Factors in atom technology. advanced research,

      So the prototype reactor did what it was always intended to do, proved the technologies for if and when a commercial reactor was needed.

      Since as well as processing waste the point of the reactor was to produce more fuel, when the uranium costs next to nothing then it could not be justified, but it remains ready for when and if predictions of shortages come true.

      By this artical,, I see atom as going to be here for a while longer. Tom.

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