Analyses Show Lieberman-Warner Depends on Significant Nuclear Energy Increases
May 12, 2008
The expansion of nuclear energy will be a key debate if the America's Climate Security Act – S.2191 (Lieberman-Warner) cap-and-trade bill comes to the Senate Floor. As economic analyses show, significant carbon reductions are contingent on the construction of extensive numbers of new nuclear plants.
FACT: Economic analyses show Lieberman-Warner would require massive development of nuclear energy, up to 268 new plants by 2030, according to the Energy Information Agency’s (EIA) most recent analysis: that’s two and a half times the number of plants we have operating today - an increase so massive and unrealistic as to be fictional.
In addition to EIA, the chart below shows necessary projections as determined by the Environmental Protection Agency (EPA), the Electric Power Research Institute (EPRI), and the Clean Air Task Force (CATF):
EIA’s analysis further showed that merely limiting the construction of new nuclear plants dramatically increased allowance costs and electricity costs, while decreasing reductions in carbon emissions. This clearly indicates that nuclear energy is the key to reducing carbon emissions and reducing the costs of any such effort. Proponents of climate change legislation can’t continue to reject the world’s largest source of carbon-free energy. However, any large-scale development of nuclear energy will face several challenges including regulatory predictability and waste management, but perhaps the most significant challenge will be the scale of the financing needed to accommodate such a large number of projects.
The Electric Power Research Institute’s projection of 64 new plants by 2030, which is considered an extremely optimistic goal by industry experts, would require the industry to find financing of approximately $384 billion. Companies looking to build just one or two plants may need financing equal to half of their total market capitalization. CEO’s will not gamble the health of their companies if the financial risks are too high or if political support is shaky. One of the ways the federal government can address this situation is by helping to create a stable financing platform upon which executives can base their decisions. Loan guarantees is one such tool.
If proponents of climate change legislation are serious about reducing carbon emissions, it’s time to stop dodging the issue and embrace nuclear energy. Robust construction of emissions-free nuclear plants requires robust support from the Congress now.