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December 05, 2011

Carnival of Nuclear Energy 81

Carnival of Nuclear Energy 81 is up at Idaho Samizdat

ANS Nuclear cafe compares renewable energy loan guarantees with nuclear loan guarantees.

For nuclear project loan guarantees, the government requires that the utility pay a large sum of cash, up front, to the government. This cash payment (the “credit subsidy fee”) is essentially an insurance premium, which compensates the government for the risk of loan default. It is somewhat analogous to mortgage insurance that some homeowners pay. The amount of the cash payment is determined, on a project-specific basis, by the federal Office of Management and Budget (OMB). The required amount can vary significantly for different projects, based on various market factors like whether they are in a merchant or regulated market, if they have a long term power purchase agreement, etc.





The amount of the insurance payment is significant. It can be as much as $1 billion, i.e., a significant fraction of overall project cost; enough to significantly impact the project’s overall economics.

In fact, the cash payments that the OMB has requested have been enough to make a loan guarantee not worthwhile in some cases. Constellation Energy rejected the federal loan guarantee for the Calvert Cliffs-3 project. The government wanted a cash payment of $880 million, equal to 11.6 percent of the total loan amount. Constellation said that not only would those terms render the project non-viable, but that it could probably get better terms on the open market, with no government help. (Some “subsidy”, eh?) In other cases, such as for Vogtle, the calculated fee is much less, and the loan guarantee remains worthwhile.

As part of the stimulus package, the federal government has been paying the credit subsidy fees for renewable projects. The fee was determined by the OMB, but then the government appropriated funds to pay that cost. (At least the subsidy is quantified and documented.)

Not only does this difference in terms have a huge impact on project economics, but it also probably has a significant impact on project risk. A nuclear project has to pay the (huge) credit subsidy fee, along with ~$100 million in licensing costs, before it can even start construction.

From Nextbigfuture :

Explosions, deadly computer viruses and other sorts of 'accidents' suggest that there is a shadow war targeting Iran's nuclear project: either the Western intelligence agencies, internal opposition groups, or both.

Wholesale power generation costs are compared in China where most of the new power generation in the world is being built.

Thermal power is coal. Nuclear power is competitive with some coal power. Hydro is the cheapest

Thorium Energy Pty. Limited is a Czech and Australian partnership with around 50 scientists working on the development of commercial thorium-fueled molten salt reactors. For the past five years, a group of Czechs and Australians have been working on the beginnings of a partnership to develop an energy source they say could be the answer to Europe's growing energy needs and lower emissions goals.

There are more than a few global efforts developing MSRs, with China potentially leading the way after the government agreed to fund a private company with goals of producing a small MSR within five years.

There was a Thorium Base Load Project Symposium held at Parliament house, Canberra, Austrlia November 24 and 25th, 2011 The opening address was by Martin Ferguson AM, MP Austrlian Minister for Resources, Energy and Tourism. Peter Stepanek Director Thorium Energy Pty Ltd. spoke at the Symposium as did other scientists and officials

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