The United State’s much-touted nuclear renaissance is in jeopardy, but it is not primarily from environmental and safety concerns. The industry is finding it increasingly difficult to make the economic case for building new nuclear plants.
The enormous capital cost of building reactors is just one factor holding back the long-promised nuclear revival. Just as critical is the risk that the already high costs will balloon as companies build new-generation plants that must be able to withstand the impact of a terrorist crashing an airliner into one. Companies are facing difficulties financing their plants due to the long lead times needed for permits and construction before they can begin to recoup capital expenditures. Then there’s the potential for cost overruns, so companies are looking for political and regulatory support to shift financial obligations onto customers and taxpayers to minimize risk in what Moody’s Investor Service Inc. has dubbed a “bet-the-farm” type of project.
That effort to offload financial risk to partners, customers and governments is the hallmark of the 21st-century nuclear industry. (more…)