DoE may provide financing for new plants

3 November 2002

The US Department of Energy (DoE) may have to help finance the first new reactors to be built in the USA in order to ensure that the near-term deployment of nuclear power takes place.

A DoE-commissioned report, Business Case for New Nuclear Power Plants, presented to the department's Nuclear Energy Research Advisory Committee recommends that the DoE be allowed to extend credit to help finance new power reactors. An operator would begin repayments to the DoE once a unit had achieved a designated capacity factor.

Financing options include interest-free loans and equity options to support continued financing in the event of construction delays or judicial intervention. Other possible risk-mitigation mechanisms recommended by the report include helping with debt principal buy-down or construction cost overruns, as well as investment tax credits and the creation of a carbon emissions credit programme that would include nuclear power.

The report said that new reactors can be competitive, but the capital costs of the first four or five units of one design would total about $15 billion. A federal credit progamme might help with 10% of this cost.

The DoE said that this programme would not be subsidising nuclear energy, but would be helping the industry with financing.



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