CyberB0B39 writes: "The Department of Energy is set to approve $6.5B for a Georgia nuclear power plant, the first such plant in more than 3 decades. While other nuclear plants are shutting down due to competition from natural gas, Atlanta-based Southern Company is forging ahead with its planned construction of the plant."
[ED Note: "For those that are wondering, the new nuclear plant will be based on the AP1000 design by Westinghouse Electric Company LLC, a company based in Pittsburgh, PA and a subsidiary of Toshiba."]
So, first, it's $6.5 billion in loan guarantees. The plant as an whole is going to cost at least $14 billion -- presumably before the inevitable cost overruns.
That $6.5 billion could instead put rooftop solar installations on half a million homes, making them net-neutral energy consumers with zero emissions for the next half a century. The entire $14 billion would just about be enough for an entire large metropolitan area to go solar.
Yes, that doesn't address baseload power. Worst case, double the dollars or cut the number of homes in half, and put iron Edison-style batteries in each of the homes, and there's your overnight / baseload power, supplemented when necessary by existing power plants -- plants that would only have to run at greatly reduced capacity, thus extending their lifetimes and reducing maintenance and operations costs.
I'm sure this power plant is going to be hugely profitable for the contractors and the shareholders and the CEOs and the other usual suspects. But it's an investment in their future. Solar would be an investment in our future.
By why on Earth would the DoE spend money to support the population?
As someone who agrees with GP's sentiment as concerns rooftop solar at least, where's my +1 sad but true mod?
In my perfect world, instead of subsidizing oil companies, we'd subsidize rooftop solar installations. In addition to providing power during summer at least when it's most needed to run air conditioners (and maybe a little power where I live in the winter during the 2 or so days between Labor Day and Memorial Day when we see the sun), I wonder how such a project would improve the economy by creating a whole bunch of jobs to make it happen. On the other hand, one would have to consider what would happen to those jobs once every rooftop already has a solar installation and we move to maintenance mode.
Unfortunately, we seem to live in a world that's addicted to the economic model of consumerism. Well, of course, there's nothing stopping me from scrimping and saving over the next few years so that I can get some panels on my own roof. However, the sad but true part comes in when we realize how easy it is for big players to get deals and special dispensation and discounts and whatnot and how unwilling we are to give a private individual anything, no matter how much it may be beneficial for all of us, because we demand that private individuals prove that they're morally virtuous. It would be terrible if the wrong person got a cheaper electricity bill.
Otherwise I should probably just add that I'm all in favor of expanding nuclear power. Is it dangerous? Well, the way I look at it, it's only as dangerous as we're willing to be irresponsible about it. Driving a car is dangerous, which is why we discourage drunk driving instead of concluding that because some people drive drunk and kill others, cars are just too dangerous period. (Note on the car analogy: in actuality, cars are far, far more dangerous than nuclear at present if you count injuries and deaths.) We're going to have to get power from somewhere once fossil fuels run out. Solar/hydro/geothermal/etc won't be able to do it. Fossil fuels will run out, even if it takes 200 or 300 more years before they do.
I wonder how such a project would improve the economy by creating a whole bunch of jobs to make it happen.
That money - because it's a subsidy - comes from either taxing people, or from borrowing against future tax receipts. So you do see the jobs that are directly created, but you don't see the jobs doing other things that weren't created because the money that people would have spent to create them was taxed away to subsidize solar.
Loan guarantees are not loans, but are mind of like insurance; they only pay out if the recipient defaults. Georgia Power will still have to borrow that money elsewhere and pay it back themselves. The point of the loan guarantee is to help the borrower obtain the loans it needs by soaking up some of the credit risk. In addition, the nuclear loan guarantees from DOE are structured such that the utility actually pays the credit subsidy costs. The loan guarantee does not pay out unless GP defaults.
The issuance of this loan guarantee does not mean that $6.5B going out the door, so you can't really say that the money could be used elsewhere. It's not really money yet, just the promise of money if something unexpected happens in the future.
I'll bite: if there's solid business case for GP building this project, why do they need government guarantees to get the money to do it?
If the Market won't lend them money based just on the business's likelihood of profit, then I have to assume there's some kind of significant risk that we're not being told about.
Moody's had this to say about it last year, before the loan guarantees were approved:
"In the event the two parties cannot come to agreement on the final terms and conditions of a guarantee, Georgia Power would continue to finance the plant as it has done thus far with its own capital market financings. We would view this situation as only a slight credit negative as interest costs would be marginally higher than DOE guaranteed debt, although this is mitigated over the near term by the low aggregate level of interest rates, as well as by Georgia Powerâ€™s strong credit quality and capital markets access. We note that the South Carolina Electric & Gas has proceeded with a nearly identical nuclear construction project without a DOE loan guarantee."
I'm no finance guy, but to me, this says that GP not getting the loan guarantees wouldn't be a show-stopper. With the loan guarantees, they'll get marginally better interest rates.
PDF linky - http://matchbin-assets.s3.amazonaws.com/public/sit es/274/assets/9O21_Moodys_report_on_Vogtle_July_11 _2013.pdf [amazonaws.com]
Awesome; thanks for the info.
I would assume the biggest risk for anything nuclear would be political.
That $6.5 billion could instead put rooftop solar installations on half a million homes, making them net-neutral energy consumers with zero emissions for the next half a century.
I imagine most homeowners can already get a $13,000 loan, so those "half a million" probably don't NEED a government "loan guarantee" to put up solar panels in the first place. Most of them *could* start doing that now, if they chose. FORCING them to do so would be something else, entirely...
And all those solar installations will only give you a fraction of the 2x1117MW these nuke plants will supply.
put iron Edison-style batteries in each of the homes
Considering that those cost several times more than lead-acid batteries, it doesn't seem like they're a good deal, even in the very long-term.
plants that would only have to run at greatly reduced capacity, thus extending their lifetimes and reducing maintenance and operations costs.
No. It really doesn't work that way...
Well put! I think solar + batteries on ever roof is the future, but it's sadly not the present. We're nearly there - it's tantalizing - but current tech still doesn't cut it. Top-quality photoelectric panels are bottlenecked on rare materials, and price would go through the roof if demand picked up. Batteries aren't quite there yet to allow the base load capacity to actually be reduced in cities.
We've come far enough that the idea isn't fantasy any more - it's near future SF. But it's still fiction right now, and I'm eager to see a modern nuclear plant get built and see how it compares to what advocates like myself have been claiming. In theory new plants should be very safe and much more cost effective, but they're as vulnerable as ever to corruption and shortcuts while being built.
If we can build one in the Deep South and not have it become a boondoggle and hidden safety menace (due to low quality parts sneaking in and cash sneaking out), that will be a great sign for America.
Batteries don't make much sense if you're connected to the grid. They will always have SOME losses, even if they're reduced from the current level, in addition to the up-front investment.
Meanwhile, running wind turbines all night, cranking-up hydro off-peak, and using solar-thermal with heat storage, etc., doesn't have the chemical conversion storage losses, nor the extra inverter losses. And if you do need storage, in the event of occasional excessive supply, pumped hydro is a far better option for grid-scale applications, and is extremely cheap to add-on to any existing dams.
I imagine most homeowners can already get a $13,000 loan
I don't know about the US but a $13,000 loan is not small thing for most people where I live. The government here has a scheme where you are loaned the money but all the repayments go onto your energy bills, the idea being that the panels reduce the bills by more than the repayments. After 10 years it is all profit for you.
I don't think anyone would suggest forcing people to have solar panels, but if given the opportunity most people would take them up for free. Zero electricity bills is a rather attractive proposition. The problem is that the US is not very good at funding stuff like that, where the benefit is only to the electorate and not to some corporation that is bankrolling the local politicians. Look at the number of places that have banned municipal broadband.
Doesn't matter. It is always cheaper to reduce demand by installing solar and improving homes than it is to build new capacity. Plus, it reduces emissions far more, and you get rid of the network losses by having power generated close to where it is used. There are knock-on effects too, like the fact that everyone's energy bill goes down and they can charge their electric vehicles very cheaply or for free, further reducing emissions. It also creates a lot more employment installing and maintaining a large number of panels, rather than just one nuclear plant.
I agree. The Japanese have developed low temperature sodium sulphur batteries that are an ideal fit. There are some 50MW range installations up and running already to back up wind farms. They can be installed at residences too. It is also possible to recycle used NiMH or lithium cells for this application.
I don't know about the US but a $13,000 loan is not small thing for most people where I live.
It's a pretty modest expense in the US. For some context:
2010, USA new home prices - Median: $221,800 Average: $272,900
"The 2011 Median Income of US households was $50,054 per annum"
So $13k is just 6% of the median home value, and just 26% of the annual household income (though a loan would typically allow 15-30 years to repay).
It is always cheaper to reduce demand by installing solar and improving homes than it is to build new capacity.
It's already clear that just installing solar panels won't do it. What were your other ideas for "improving homes"? If you're talking about extra insulation or similar, that probably won't help much with ELECTRICAL demand, because home heating dominates domestic energy usage in the US, and that's generally via natural gas, NOT electricity. I can see how it would help in tropical climates.
Plus, it reduces emissions far more, and you get rid of the network losses by having power generated close to where it is used.
I would agree if we were talking about coal power plants, but these nuclear power plants will have almost zero emissions. Also, grid losses in the US only average 7%... Not a substantial amount, and certainly not enough to change the math in favor of 1/5 as much solar capacity.
The Japanese have developed low temperature sodium sulphur batteries
Thanks for the tip, I'll look those up some time.
The other problem with deploying solar is that the technology is advancing quite quickly. Fourth generation nuclear power plants have a planned lifetime of 50 or so years and have been around for a couple of decades. Unless there's some unexpected LENR or fusion breakthrough, you're better off building a nuclear power plant now and starting to use it than you are waiting for a few years and then building it.
For solar, the value proposition is quite different. It has a large up-front cost with around a 10-year ROI, but within five years you're likely to be able to get panels that are either much more efficient or much cheaper (or both), making a five-year ROI feasible. Or, to put it another way, you can either spend that $13K now and be energy neutral and paid off in ten years, or spend it in five years and be energy neutral and paid off in ten years. Which makes more financial sense?
Why the hell are we building a nuclear reactor in an ex-Soviet state between Russia and Turkey?
Or buy a messaging app instead?