NEI Nuclear Notes

The Congressional Budget Office’s Director, Douglas Elmendorf , provided some important insight into how loan guarantees are assessed in the US government’s budget . For those who have been following the 50 percent default rate argument that nuclear critics have been making , CBO makes clear that the assumption of the rate in their 2003 report was for a piece of legislation that was never enacted. In the Director’s blog post , CBO basically says that there are numerous varying assumptions that go into assessing the credit risk of each project. But “without such information, much of which would be proprietary, CBO has no basis for estimating the cost to the government of any specific loan guarantee of this type. ” As said before and confirmed by CBO, no data exists to support the claim that 50 percent of new nuclear plants that are built will default. Perhaps the Director’s blog post puts this mis-understood claim to rest; somehow I don’t think so though…

Your rainy weekend reading suggestion: the Congressional Budget Office's just released study," Nuclear Power's Role in Generating Electricity ." The pull quote: In the long run, carbon dioxide charges would increase the competitiveness of nuclear technology and could make it the least expensive source of new base-load capacity. More immediately, EPAct incentives by themselves could make advanced nuclear reactors a competitive technology for limited additions to base-load capacity. However, under some plausible assumptions that differ from those CBO adopted for its reference scenario—in particular, those that project higher future construction costs for nuclear plants or lower natural gas prices—nuclear technology would be a relatively expensive source of capacity, regardless of EPAct incentives. CBO’s analysis yields the following conclusions: In the absence of both carbon dioxide charges and EPAct incentives, conventional fossil-fuel technologies would most likely be...