Bad Reactors

But this emerging bipartisan consensus did not extend to Wall Street, where the new package of giveaways did little to ease doubts about the viability of new nuclear power. Months after the 2005 bill passed, the rating agency Standard & Poor’s issued a report saying that the generous new subsidies "may not be enough to mitigate the risks associated with operating issues and high capital costs" of new nuclear plants, and that companies that built or financed them would see their credit ratings slide. This was a blow to the industry; at the time, the Nuclear Energy Institute was claiming that the overnight building costs (meaning inflation isn’t factored in) for next-generation reactors would be between $1,100 and $1,500 per kilowatt capacity—roughly on par with natural gas plants and cheaper than coal. In June 2007, the Keystone Center, a Colorado-based energy think tank, published another report, funded in part by the industry, which cast fresh doubt on NEI estimates. The study (which, unlike the NEI figures, used actual hard data from reactors built in Asia in the 1980s and ’90s) projected that the overnight costs for new nuclear plants would be about $3,000 per kilowatt, or up to $4,000 per kilowatt including inflation—at least double the NEI’s estimate.

Over the last decade, federal funding for renewable energy and efficiency research has essentially remained flat, even as concerns about global warming have mushroomed. Support for nuclear power, on the other hand, has soared from zero in the late 1990s to $438 million a year in 2008. The DOE’s fiscal year 2009 budget request (which has yet to be approved) includes $630 million for nuclear energy research, a 44 percent increase from the previous year, while the request for renewable energy and efficiency R&D programs has dipped slightly to around $535 million.