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Odds against new US nuclear plants-finance lawyer
March 28, 2011 / 10:25 PM / 7 years ago

Odds against new US nuclear plants-finance lawyer

 * Plants too expensive, even before Japan disaster-lawyer
 * Likelihood of new US plant soon “exceedingly remote”
 * Couldn’t have happened at worse time for India projects
 * Not the end of nuclear - former NRC chairman
 By Roberta Rampton
 WASHINGTON, March 28 (Reuters) - Public fears about nuclear safety stacked up on untenable economics make it unlikely that any new nuclear reactors will be built in the United States in the next several years, a lawyer who specializes in energy project financing said on Monday.
 Even if public opinion were to “snap back” after the emergency at Japan’s Fukushima Daiichi plant -- the world’s worst atomic crisis in 25 years -- nuclear plants cost too much to build, even with government loan guarantees, said Irving Rotter, a partner with New York law firm Sidley Austin.
 “The likelihood that the United States will have a nuclear reactor within the next several years is exceedingly remote -- it was as exceedingly remote before the incident in Japan,” Rotter told a nuclear policy conference held by the Carnegie Endowment for International Peace.
 Long before the Japanese plant was battered by an earthquake and tsunami earlier this month, natural gas was a far cheaper fuel source for electricity in the United States. [ID:nN24139785]
 Exelon (EXC.N), an energy utility with nuclear plants as part of its fleet, said last week that a review of U.S. plants launched by the U.S. Nuclear Regulatory Commission in the wake of the Japan disaster could add even more costs, if regulators step up safety requirements.
 LOAN GUARANTEES COME WITH A COST
 The Obama administration offered loan guarantees to help secure financing, but the cost of the terms was extraordinarily high, Rotter said, pointing to the failure of a deal for a nuclear reactor in Maryland as an example. [ID:nN09265747]
 “Public opinion, which is fairly important both for finance and the politics underlying nuclear, has moved very rapidly ... from favoring nuclear power in the United States ... to being decidedly opposed,” Rotter said.
 Other nations with fewer options to nuclear power, or where governments are more involved in financing plants, may choose to go ahead with projects, he said.
 But an analyst who has advised five Indian prime ministers told the conference that the Japanese crisis would weigh heavily on plans for a series of new reactors in his country.
 “I think it couldn’t have come at a worse time for India,” said Vallampadugai Arunachalam, chairman of the Center for Study of Science, Technology and Policy in India.
 “This debate is so intense right now,” he said.
 The German government backed away from a plan to renew licenses for aging power plants after the Japanese crisis, an example of growing “political risk” for the industry, said Mark Hibbs, a senior associate at the Carnegie Endowment’s nuclear policy program.
 “There is the potential for an enormous amount of damage politically to this energy sector ... because of the wave of recriminations that is going to arise about who is ultimately responsible for this,” Hibbs told the conference.
 It will take months before regulators and the nuclear industry have enough facts about what went wrong at the Japanese plant to make firm conclusions about what lessons to draw, said Richard Meserve, a former chairman of the U.S. Nuclear Regulatory Commission.
 “I think it’s premature to be able to judge whether this was such a failure that we ought to just decide we just can’t do this,” said Meserve.
 “I don’t think this will be the end of nuclear, presuming that they get the reactors under control,” he said.  (Editing by Dale Hudson)       

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