Nuclear Energy

2002. The government, instead of allowing the company to close, intervened. The rescue is
estimated by the government to have cost the taxpayers a mindboggling ELEVEN BILLION
ccxv On top of it, the government has taken over all its liabilities, which means it has taken over all the decommissioning and waste
POUNDS!
management costs, which amount to nearly a hundred billion euros and will keep on rising as the waste keeps accumulating!ccxvi
Most subsidies given by governments to the nuclear electricity industry are common throughout the
world. We discuss below the most important of these subsidies, with examples mainly from the
United States. The only reason for discussing USA in greater detail is not because it gives more
subsidies, but because of greater availability of information.
1. Capital subsidies
Investing in nuclear power is considered to be a high risk investment. In most countries
around the world, the nuclear electricity sector is in the public sector, and therefore the high costs
and huge risks associated with nuclear energy are guaranteed by the government.
In the US, even though the electricity industry has been mostly in private hands, till the 1990s
distribution costs were regulated by the states, and regulators allowed electric utilities to pass on
their high costs to consumers – to the tune of half a trillion dollars, including:
More than $200 billion (in 2006 dollars) on account of cost overruns of completed nuclear
power plants. ccxvii
Most of the $50 billion (in 2006 dollars) in construction costs of the abandoned nuclear
plants. ccxviii
The high electricity generating costs from nuclear plants, which were on the average three
cents per kwh more than electricity from fossil fuel plants, for the period 1968 to 1990 –
this totalled more than $225 billion (in today’s dollars). ccxix
A second wave of subsidies was given to nuclear reactors when the electricity sector was
deregulated in the 1990s. Regulators allowed utilities to recover the difference between their
remaining investments in nuclear plants and the market value of those plants – called ‘stranded
costs’ – from consumers. These payments approached $100 billion in today’s dollars. ccxx
built! ccxxi
Without these subsidies, the present nuclear reactor fleet in the US would never have been
Post deregulation, that is, since the 1990s, Wall Street has been unwilling to provide capital to
nuclear plant developers, except at very high interest rates, as these plants are going to find it very
difficult to transfer their high construction costs to consumers. Therefore, over the past decade, the
American nuclear industry has mounted pressure on the US government for a fresh round of
subsidies – in the form of loan guarantees and other financial assistance – for building new nuclear
plants. The introduction of government loan guarantees reduces the cost of financing a new nuclear
power plant – and so the price of nuclear electricity – in two ways. First, now the lenders don’t care
about the risks and are willing to lend funds at low interest rates. Second, the guarantee enables
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