Nuclear Energy Slows Down

[jpak]

http://www.energycentral.com/centers/energybiz/ebi_detail.cfm?id=477

No one ever said that the re-emergence of nuclear power would take the fast lane. The road, in fact, is filled with potholes that include some high profile deferments and ever-increasing capital costs.

Despite the delays, the long-term underlying fundamentals are favorable to the nuclear industry. Newer reactor designs are not only considered to be even more productive but also to have safety redundancies to give communities greater assurances. Emissions from nuclear energy, meantime, are negligible when compared to fossil fuels -- an important factor if one considers that regulatory pressures to limit greenhouse gases that cause global warming will only intensify.

While nuclear developers are doing the necessary groundwork to build, they still have not committed themselves. Most immediately, the credit markets are weak and the cost of raw materials such as cement, copper and steel is expensive. Those dynamics have caused Berkshire Hathaway's MidAmerican Energy to put off developing a nuclear plant in Idaho as well as South Carolina Electric & Gas to postpone submitting a combined license application to federal regulators.

The South Carolina utility, however, may choose to move forward given that access to generous benefits provided by the Energy Policy Act of 2005 may be limited. That law provides for loan guarantees of up 80 percent of a project's cost, while it also gives a tax credit of 1.8 cents per kilowatt-hour for 6,000 megawatts of capacity from new nuclear power plants for the first eight years of operation.

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