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Money, not Fukushima, is nuclear industry’s biggest hurdle

Nuclear industry’s other big hurdle: finance NRG put brakes on new plant; industry aims at loan guarantees By Steve Gelsi, MarketWatch, 1 April 11,

NEW YORK — While public outrage over radiation seeping from Japan’s damaged Fukushima Daiichi power plant is a huge setback for proponents of nuclear power, securing financing for new reactors poses perhaps an even bigger challenge in the United States…..

few of the forces that scuttled Constellation’s plans have gone away. Add to that the fact that the Fukushima Daiichi nuclear power station is still leaking radiation three weeks after Japan’s monster March 11 earthquake and tsunami, and the likelihood of finding financing for these billion-dollar projects grows even dimmer.

Just last week, New Jersey-based NRG Energy /quotes/comstock/13*!nrg/quotes/nls/nrg (NRG 21.65, +0.11, +0.51%)  said it would suspend near-term efforts to begin construction of its South Texas Project nuclear plant. NRG said it would continue efforts to secure an operating license for the project, however.

“Nuclear plants are too large to be financed in the capital markets,” NRG Energy CEO David Crane said in a prepared statement to MarketWatch. “Without the federal loan guaranty, our project is dead on arrival.”

Loan guarantees amount to a contractual pledge between the government, private creditors and a borrower that Uncle Sam will cover the borrower’s debt obligation in the event of a default…..
NRG’s decision was also shaped by events in Japan, since the South Texas Project included a $125 million equity investment commitment from Tokyo Electric Power Co…..But Tepco also owns the stricken Fukushima Daiichi plant north of Tokyo. Efforts to bring the plant under control and line up enough power to serve its millions of customers now cast doubt over its continued participation in the South Texas Project……

U.S. nuclear power plant construction list shortens……Nuclear industry’s other big hurdle: finance – MarketWatch

April 2, 2011 - Posted by Christina Macpherson | business and costs, USA