How the tax payer funds the nuclear industry – to keep it alive

The many ways of counting subsidies

Among the goodies routinely given away, according to the Concerned Scientists, are:

Subsidies at inception, reducing capital costs and operating costs.
Accounting rules allowing companies to write down capital costs after cost overruns, cancellations and plant abandonments, reducing capital-recovery requirements,
Recovery of ‘stranded costs’ (costs to a utility’s assets because of new regulations or a deregulated market) passed on to rate payers.

Yes, you read that last item correctly. Even when the energy industry receives its wish to be rid of regulation, it is entitled to extra money because of the resulting rigors of market pressures.

After 60 years of nuclear power, the industry survives only on stupendous subsidies, Ecologist, Pete Dolack 4th January 2016 Almost 60 years since the world’s first commercial nuclear power station began to deliver power to the UK’s grid, the industry remains as far from being able to cover its costs as ever, writes Pete Dolack. But while unfunded liabilities increase year by year, governments are still willing to commit their taxpayers’ billions to new nuclear plants with no hope of ever being viable.

The ongoing environmental disaster at Fukushima is a grim enough reminder of the dangers of nuclear power. But nuclear does not make sense economically, either.

The entire industry would not exist without massive government subsidies. Quite an insult: Subsidies prop up an industry that points a dagger at the heart of the communities where ever it operates.

The building of nuclear power plants drastically slowed after the disasters at Three Mile Island and Chernobyl, so it is at a minimum reckless that the latest attempt to resuscitate nuclear power pushes forward heedless of Fukushima’s discharge of radioactive materials into the air, soil and ocean.

There are no definitive statistics on the amount of subsidies enjoyed by nuclear power providers – in part because there so many different types of subsidies – but it amounts to a figure, whether we calculate in dollars, euros or pounds, in the hundreds of billions.

Quite a result for an industry whose boosters, at its dawn a half-century ago, declared that it would provide energy “too cheap to meter“!

Then and now … little has changed

Taxpayers are not finished footing the bill for the industry, however. There is the matter of disposing radioactive waste (often borne by governments rather than energy companies) and fresh subsidies being granted for new nuclear power plants. None of this is unprecedented – government handouts have the been the industry’s rule from its inception.

A paper written by Mark Cooper, a senior economic analyst for the Vermont Law School Institute for Energy and the Environment, notes the lack of economic viability then: [page iv]

“In the late 1950s the vendors of nuclear reactors knew that their technology was untested and that nuclear safety issues had not been resolved, so they made it clear to policymakers in Washington that they would not build reactors if the Federal government did not shield them from the full liability of accidents.”

Nor have the economics of nuclear energy become rational today. A Union of Concerned Scientists paper, Nuclear Power: Still Not Viable Without Subsidies, states: [page 3]

“Despite the profoundly poor investment experience with taxpayer subsidies to nuclear plants over the past 50 years, the objectives of these new subsidies are precisely the same as the earlier subsidies: to reduce the private cost of capital for new nuclear reactors and to shift the long-term, often multi-generational risks of the nuclear fuel cycle away from investors. And once again, these subsidies to new reactors-whether publicly or privately owned-could end up exceeding the value of the power produced.”

The many ways of counting subsidies

Among the goodies routinely given away, according to the Concerned Scientists, are:

Subsidies at inception, reducing capital costs and operating costs.
Accounting rules allowing companies to write down capital costs after cost overruns, cancellations and plant abandonments, reducing capital-recovery requirements,
Recovery of ‘stranded costs’ (costs to a utility’s assets because of new regulations or a deregulated market) passed on to rate payers.

Yes, you read that last item correctly. Even when the energy industry receives its wish to be rid of regulation, it is entitled to extra money because of the resulting rigors of market pressures.

The amount of government subsidies for nuclear (and for oil and gas) is far greater than that for solar energy, despite Right-wing attempts to exploit the Obama administration’s generous loan guarantees to failed California solar-panel manufacturer Solyndra.

A primary source for right-wing disinformation campaigns against renewable energy appears to be a report by the US Energy Information Agency that lists direct federal government subsidies to renewables as significantly larger than for nuclear or for natural gas and petroleum liquids for fiscal years 2007 and 2010.

The report, prepared at the behest of three hard-line Republican members of the House of Representatives, was narrowly focused, and notes that it “do[es] exclude some subsidies.”

And, as a snapshot, the decades of previous handouts to nuclear, oil and gas companies are not accounted for. Nor does the Energy Information Agency report account for legacy costs – solar and wind power, for example, do not leave behind tons of radioactive waste as does nuclear energy.http://www.theecologist.org/News/news_analysis/2986749/after_60_years_of_nuclear_power_the_industry_survives_only_on_stupendous_subsidies.html