Nuclear Energy

Opinion of Credit Ratings Agencies and IFIs
Cost of Electricity Generation Alternatives
MIT Study Update 2009: In Cents/kWh ($2007)
Nuclear Coal Gas
8.4 6.2 6.5
Credit rating agencies must have strong research capabilities. Moody's, one of the world's
leading credit agencies, in a report in October 2007 estimated “overnight” construction costs clxxxix
for a nuclear plant at US$5000-6000/kW. Standard and Poor's, another world renowned credit
agency, in its report of October 2008 says that these costs, after including interest during
construction and other inflation factors, can range from $5,000 per kW to $8,000 per kW. cxc These
estimates are much more than the overnight cost used by the MIT Update of 2009 for its
calculations, which was only $4000/kW. Which means that these credit agencies reckon that the
cost of nuclear electricity is going to even more than that estimated by the MIT team!
Credit rating agencies are out-and-out pro-corporate bodies; they will not make
recommendations based on environmental considerations. Even they conclude that the economics of
nuclear power is ruinous. Standard and Poor's stresses: “no utility will commit to a project as large
and risky as a new nuclear plant without assurance of cost recovery”. Similarly, Moody’s “believes
that many of the current expectations regarding new nuclear generation are overly ambitious.” cxci
The World Bank has been willing to finance the most environmentally destructive projects,
so long as corporations can make handsome profits. But even it is not willing to give loans for
nuclear plants! The economics of nuclear power is so deleterious that with the exception of a 1959
loan to Italy, it has never financed a nuclear power plant and there are no signs that it has changed
its financial risk analysis. cxcii In fact, the World Bank’s lending advice explicitly states: “Nuclear
plants are thus uneconomic because at present and projected costs they are unlikely to be the least-
cost alternative. There is also evidence that the cost figures usually cited by suppliers are
substantially underestimated and often fail to take adequately into account waste disposal,
decommissioning, and other environmental costs.” cxciii
A statement signed by six of Wall Street’s largest investment banks is even more revealing:
in 2007, Citigroup, Credit Suisse, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan
Stanley informed the US DOE that they were unwilling to extend loans for new nuclear power
plants unless taxpayers shouldered 100% of the risks! In justifying this demand, the banks stated:
“We believe these risks, combined with the higher capital costs and longer construction schedules
of nuclear plants as compared to other generation facilities, will make lenders unwilling at present
to extend long-term credit…” cxciv
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