Skip to main content

S&P's Epiphany

Standard and Poors just came out with a report titled "Why U.S. Utilities Are Seeing Nuclear Power In A New Light" (subscription required for actual report). The report read more like "Why S&P is Seeing Nuclear Power In A New Light.

After looking at the report, it appeared S&P had an epiphany in which they are finally understanding how much the industry has changed over the years. They recognized the new licensing framework for new plants, who the nuclear players are, what technologies we are looking at building, the costs associated and the credit implications. What's great about the report is that S&P used almost of their information from NEI's 2006 Status Report (pdf).

S&P still has much of their same reservations about the costs to build a new plant but it's great to finally see them keeping up with what's going on in the nuclear industry.

Technorati tags: , , , , , ,

Comments

Gunter said…
Can you explain this "epiphany" a little better?

This appears to be a rehash of the now year old January 9, 2006 S&P report "Credit Aspects of Nuclear Power for North America and Europe." Aside from the addition of all the chaff, nothing has really changed from the central issue being that introducing the financial risks from more nuclear power to a business profile jeporadizes credit ratings.

Nuclear waste remains the same question that it has for more than a half century. If anything, the licensing and opening of Yucca Mt. is ever more remote and more nuclear power means more nuclear waste with a questionable future.

With the distinct possibility that EPACT 2006 appropriations for new nukes will be whittled down under a fiscally conservative Congress it doesnt seem like Wall Street will be getting bullish on new atomic power any time soon.

And given the "deja vu all over again" that is occuring in Finland with EPR cost overruns and delays as elsewhere, I'd venture they are "keeping up" on industry intentions more out of concern for the electric utility business sector being sucked into the same old quagmire than anything else.

Gunter, NIRS
David Bradish said…
I was wondering if you would ever comment on this post.

Well, first they seem to finally understand the "New Licensing Framework" as mentioned on page 1 of the report.

"The new licensing framework aims to assure potential investors that their investment in a new nuclear plant will not be jeopardized as long as the design and construction adhere to the initial set of standards agreed by the parties involved and the NRC."

Most of the delays in the past were due to the regulatory framework and if all goes well in the new process then much of the risk is taken away for the construction of the plant.

Second, they are very specific on the types and costs of each nuclear technology and appear to understand what is being built. (pages 4-7) Many think that all nukes are the same but they are not and S&P knows that here.

And third, "Standard & Poor's does not anticipate construction of new nuclear plants to start in the next few years." (p. 8) Well duh, considering that the chart on page 3 shows that a plant won't start construction until about 3-4 years after a company files an application. And no one has done so yet. It seems like they figured that out all on their own.

But it's great they are taking the time to understand what's going on in the industry. The more they know, the better for the industry.

Popular posts from this blog

How Nanomaterials Can Make Nuclear Reactors Safer and More Efficient

The following is a guest post from Matt Wald, senior communications advisor at NEI. Follow Matt on Twitter at @MattLWald.

From the batteries in our cell phones to the clothes on our backs, "nanomaterials" that are designed molecule by molecule are working their way into our economy and our lives. Now there’s some promising work on new materials for nuclear reactors.

Reactors are a tough environment. The sub atomic particles that sustain the chain reaction, neutrons, are great for splitting additional uranium atoms, but not all of them hit a uranium atom; some of them end up in various metal components of the reactor. The metal is usually a crystalline structure, meaning it is as orderly as a ladder or a sheet of graph paper, but the neutrons rearrange the atoms, leaving some infinitesimal voids in the structure and some areas of extra density. The components literally grow, getting longer and thicker. The phenomenon is well understood and designers compensate for it with a …

Missing the Point about Pennsylvania’s Nuclear Plants

A group that includes oil and gas companies in Pennsylvania released a study on Monday that argues that twenty years ago, planners underestimated the value of nuclear plants in the electricity market. According to the group, that means the state should now let the plants close.

Huh?

The question confronting the state now isn’t what the companies that owned the reactors at the time of de-regulation got or didn’t get. It’s not a question of whether they were profitable in the '80s, '90s and '00s. It’s about now. Business works by looking at the present and making projections about the future.

Is losing the nuclear plants what’s best for the state going forward?

Pennsylvania needs clean air. It needs jobs. And it needs protection against over-reliance on a single fuel source.


What the reactors need is recognition of all the value they provide. The electricity market is depressed, and if electricity is treated as a simple commodity, with no regard for its benefit to clean air o…

Why Nuclear Plant Closures Are a Crisis for Small Town USA

Nuclear plants occupy an unusual spot in the towns where they operate: integral but so much in the background that they may seem almost invisible. But when they close, it can be like the earth shifting underfoot.

Lohud.com, the Gannett newspaper that covers the Lower Hudson Valley in New York, took a look around at the experience of towns where reactors have closed, because the Indian Point reactors in Buchanan are scheduled to be shut down under an agreement with Gov. Mario Cuomo.


From sea to shining sea, it was dismal. It wasn’t just the plant employees who were hurt. The losses of hundreds of jobs, tens of millions of dollars in payrolls and millions in property taxes depressed whole towns and surrounding areas. For example:

Vernon, Vermont, home to Vermont Yankee for more than 40 years, had to cut its municipal budget in half. The town closed its police department and let the county take over; the youth sports teams lost their volunteer coaches, and Vernon Elementary School lost th…