Skip to main content

Investment Banks Begin Counting Carbon in New Power Plant Costs

Leading investment banks have begun to incorporate estimates for the cost of reducing carbon dioxide emissions into the cost of building new power plant projects, a move that would increase the competitiveness of new nuclear plants.

According to this approach, banks would impose additional costs on plants that produce carbon dioxide, such as those powered by fossil fuels. The federal government does not impose a tax or other measure to account for the cost of emitting carbon dioxide, but the banks clearly believe measures to regulate greenhouse gases are imminent.

"We have decided, as have other banks, to start assessing the cost of carbon in our risk and underwriting processes as we evaluate the business models of utility sector companies. In the absence of federal legislation, we estimate the cost will fall between $20 to $40 per ton of carbon dioxide," Ken Lewis, Bank of America's chairman and CEO, told attendees at a Feb. 12 energy conference in North Carolina.

The imposition of these costs would increase the cost of coal-fired power plants, but Lewis said that he believed that coal plants would remain in use for years to come. Nuclear power plants would not be affected by such a charge because they do not produce carbon dioxide while generating electricity.

Earlier this month, investment banks Citigroup, JPMorgan Chase and Morgan Stanley announced they will begin factoring the cost of greenhouse gas emissions into new power plant proposals.

The announcement was part of a partnership with energy companies, including DTE Energy, NRG Energy, PSEG and Southern Co., to create an approach for evaluating and addressing carbon risk in financing power projects.

This partnership, which also included Environmental Defense and Natural Resources Defense Council, released guidelines for dealing with the uncertainties surrounding regional and national climate change policy.

Comments

Matthew66 said…
Actually this doesn't surprise me at all. Nuclear power plants have been paying a tax to the federal government for years to manage their used fuel. That the government, hamstrung by Congress, has failed to do that is a great pity. The greatest obstacle I see to effective used fuel management is the fact that Congress has mandated that the Department of Energy take responsibility, but failed to pass on the resources provided by the utilities for that purpose. Congress has seen the fuel management fund as a giant trough, and they've had their snouts and trotters in that trough for so long they don't want to get them out.

Maybe its time to learn from the experience of other countries and set up a specialized fuel management company, either owned by the federal government or jointly by the nuclear utilities, which is mandated to manage used fuel. This of course would require Congress releasing its death grip on the purse strings.

Public accountability is a good thing, and any company established to manage used nuclear fuel should be regulated by the NRC and be subject to public scrutiny. I don't think we are vigorous enough in holding Congress accountable for its inaction in this regard.

Popular posts from this blog

Sneak Peek

There's an invisible force powering and propelling our way of life.
It's all around us. You can't feel it. Smell it. Or taste it.
But it's there all the same. And if you look close enough, you can see all the amazing and wondrous things it does.
It not only powers our cities and towns.
And all the high-tech things we love.
It gives us the power to invent.
To explore.
To discover.
To create advanced technologies.
This invisible force creates jobs out of thin air.
It adds billions to our economy.
It's on even when we're not.
And stays on no matter what Mother Nature throws at it.
This invisible force takes us to the outer reaches of outer space.
And to the very depths of our oceans.
It brings us together. And it makes us better.
And most importantly, it has the power to do all this in our lifetime while barely leaving a trace.
Some people might say it's kind of unbelievable.
They wonder, what is this new power that does all these extraordinary things?

A Design Team Pictures the Future of Nuclear Energy

For more than 100 years, the shape and location of human settlements has been defined in large part by energy and water. Cities grew up near natural resources like hydropower, and near water for agricultural, industrial and household use.

So what would the world look like with a new generation of small nuclear reactors that could provide abundant, clean energy for electricity, water pumping and desalination and industrial processes?

Hard to say with precision, but Third Way, the non-partisan think tank, asked the design team at the Washington, D.C. office of Gensler & Associates, an architecture and interior design firm that specializes in sustainable projects like a complex that houses the NFL’s Dallas Cowboys. The talented designers saw a blooming desert and a cozy arctic village, an old urban mill re-purposed as an energy producer, a data center that integrates solar panels on its sprawling flat roofs, a naval base and a humming transit hub.

In the converted mill, high temperat…

Seeing the Light on Nuclear Energy

If you think that there is plenty of electricity, that the air is clean enough and that nuclear power is a just one among many options for meeting human needs, then you are probably over-focused on the United States or Western Europe. Even then, you’d be wrong.

That’s the idea at the heart of a new book, “Seeing the Light: The Case for Nuclear Power in the 21st Century,” by Scott L. Montgomery, a geoscientist and energy expert, and Thomas Graham Jr., a retired ambassador and arms control expert.


Billions of people live in energy poverty, they write, and even those who don’t, those who live in places where there is always an electric outlet or a light switch handy, we need to unmake the last 200 years of energy history, and move to non-carbon sources. Energy is integral to our lives but the authors cite a World Health Organization estimate that more than 6.5 million people die each year from air pollution.  In addition, they say, the global climate is heading for ruinous instability. E…