MICHELE NORRIS, Host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
ROBERT SIEGEL, Host:
NPR's Christopher Joyce reports on the nuclear side of the plan and what it could cost to restart an industry that's been treading water for 30 years.
CHRISTOPHER JOYCE: But nuclear power still scares lots of banks and investors. Leslie Kass, director of business policy at the industry's Nuclear Energy Institute, gives two reasons.
LESLIE KASS: One would be some of the unknowns, because we haven't built here in 30 years, and they want to watch the licensing process work, and they want to prove us at our word that we can replicate what's happened overseas.
JOYCE: And number two, the cost. Kass says American utility companies tend to be smaller than their foreign counterparts. They don't have as much cash, so they have to borrow more. And the typical nuclear project runs, oh, $10 billion, give or take.
KASS: Once you start borrowing almost as much as your net worth, you get penalized by the rating agencies. Your rating goes down, and then your access to capital, the cost of that goes up.
JOYCE: So the government now says okay, we'll offer something more to encourage investors to part with their cash: We'll make the utilities and developers first pay an upfront fee.
RICHARD CAPERTON: To account for the risk to the federal government that the nuclear developer defaults on the loan.
JOYCE: Caperton and other analysts say one percent is way too low. He recommends developers pay a 10 percent fee, or $800 million for a typical project. And that may be more than any utility can afford to pay.
CAPERTON: It seems unlikely to me that they would be able to get any sort of low-risk financing for the $800 million. So you can see where it becomes a big problem.
JOYCE: Nuclear analyst Matthew Bunn at Harvard's Kennedy School of Government says it'll have to be a long swim for nuclear power to slow global warming. Right now, he says, only four new nuclear plants are built every year worldwide.
MATTHEW BUNN: We have to shift from that to something like 25 every year from now until 2050 if we want to provide even, say, 10 percent of the carbon-free energy that's going to be needed to address the climate change problem.
JOYCE: Bunn says that kind of building spree, at least in the U.S., isn't likely. But Charles Forsberg, an engineer at the Massachusetts Institute of Technology, says what's important is just getting nuclear power back on its feet.
CHARLES FORSBERG: The importance of the number of plants in the next 10 years is not total electric production but what it sets in place: the licenses, the knowledge, the manufacturing facilities. It enables you to rapidly expand thereafter.
JOYCE: Christopher Joyce, NPR News.
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