Fukushima will not affect US nuclear loan guarantee program: DOE Washington (Platts)--31Mar2011/446 pm EDT/2046 GMT
The head of the US Department of Energy's loan guarantee program said Thursday that the Fukushima nuclear disaster in Japan will not derail the Obama administration's plan to help finance proposed reactors in Maryland, Texas and South Carolina.
Jonathan Silver told a House of Representatives' subcommittee that DOE still intends to support the three projects with loan guarantees, provided Congress gives DOE the additional $36 billion in loan guarantee authority that the Obama administration requested for fiscal 2012.
"From an investment perspective, [the Fukushima incident] does not affect our timeline," Silver told the Energy and Water Development Subcommittee of the House Appropriations Committee. "It is too early to tell what the actual implications on the timeline will be, but I have every expectation we will be able to put that capital to work in a meaningful timeframe."
House Republicans, while generally supportive of nuclear power, have cautioned that federal agencies may face budget cuts in coming years, as fiscal hawks are calling for slashing government spending.
Silver said DOE last year was very close to offering a conditional loan guarantee for the proposed Calvert Cliffs reactor in Maryland, but Constellation Energy pulled out of its partnership with French-owned EDF, saying DOE's credit subsidy fee for the project was too high. EDF still intends to build the reactor and is looking for another project partner.
"All other things being equal, we would expect to be able to move that project forward once the financing mechanisms are able to be met," Silver said.
NRG and Toshiba are also pursuing a loan guarantee for its South Texas Project, and South Carolina Electric & Gas has applied for a loan guarantee for its VC Summer plant.
DOE has said it needs $36 billion in additional nuclear loan guarantee authority, on top of the approximately $10.2 billion in existing authority it still has remaining, in order to fund all of those projects. Last year, DOE issued an $8.3 billion loan guarantee to Southern Co. to finance two reactors in Georgia.
Silver said DOE is aiming with the loan guarantee program to support funding for at least two examples of four different types of nuclear reactor technologies.
As for the Fukushima disaster, caused by a March 11 tsunami that knocked out cooling systems at the Daiichi nuclear power plant, Silver said while DOE is supportive of nuclear power, companies applying for nuclear loan guarantees will have to demonstrate their safety as a condition of their financing.
"The process for any applicant, including the nuclear applicants, to receive a loan first stops at the conditional commitment, which is an intent to make a loan that is dependent on the applicant completing whatever requirements are necessary," Silver said. "Among the many [requirements] is a permit to build the structure from the Nuclear Regulatory Commission. We rely on their work and experts to ensure the safety."
Nuclear energy experts say Illinois reactors are safe from natural disasters like the one that caused a crisis in Japan.
Officials from the nuclear industry addressed the Illinois Senate Energy Committee on Thursday. They testified that Illinois nuclear plants are continuously upgraded, while the plants in Japan may not have updated their safety precautions.
The head of the Emergency Management Agency points out that all Illinois nuclear plants are at least 250 miles away from the nearest fault line. Jonathon Monken says that will protect reactors from earthquakes.
One concern for senators is a plan to dismantle the Zion nuclear plant in 10 years. They worry about transporting spent fuel to new storage facilities.
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