HOUSTON (Reuters) - The U.S. Energy Department is working quickly to finalize $18.5 billion in loan guarantees that the government hopes will spur the first wave of new nuclear plants in the United States in three decades, Energy Secretary Steven Chu said on Monday.
Agency staff is working “closely” on due diligence with four nuclear developers, but none of the 10 active nuclear loan applicants has been eliminated, Chu told the Reuters Global Energy Summit in Washington.
Chu said the current $18.5 billion budget for nuclear project guarantees “probably would not go beyond four projects.”
If Congress puts more money in the program, Chu said additional projects could be funded.
Part of the nuclear due diligence process is determining whether the projects can obtain additional financing, including foreign guarantee programs, Chu said.
About 20 percent of U.S. electricity comes from nuclear reactors and proponents say nuclear energy is attractive because it emits none of the heat-trapping carbon dioxide and other gases released by fossil fuels, as in coal-fired power plants.
Utilities have filed 18 applications to build as many as 28 new reactors, but the U.S. Nuclear Regulatory Commission is not expected to issue a construction license until 2011.
Nuclear proponents are predicting an industry “renaissance” that could see dozens of new units built in the next few decades. But some industry experts say soaring building costs and tighter credit availability could put the brakes on the industry’s planned expansion.
Chu said the Obama administration wants to support development of new nuclear generation as a way to reduce the nation’s emissions of carbon dioxide, but not at the expense of energy-efficiency programs or increased use of renewable power resources, such as wind, solar or biomass.
“Nuclear is just part of a very wide portfolio of what we will need to add” to address the carbon issue, Chu said.
Last month, the energy department selected four projects for final negotiations that may lead to a commitment for a conditional loan guarantee.
Officials with NRG Energy (NRG.N), UniStar Nuclear Energy, a joint venture of Constellation Energy CEG.N and EDF Group (EDF.PA) of France, have confirmed being among the remaining four in the DOE negotiations. SCANA Corp (SCG.N) and Southern Co (SO.N) are believed to be the other finalists.
Chu said the department is working as fast as it can to choose companies that seek a variety of available loan guarantees. “I always want to go faster, no matter what,” he said.
Reporting by Eileen O'Grady; Editing by Tim Dobbyn