Green Rent Seekers: ‘Nuclear Has No Chance In A Pure Marketplace Without A Carbon Tax’

  • Date: 08/06/10

Two of the nation’s largest nuclear utilities are sounding a retreat from building new nuclear reactors in the near-term. In separate speeches Entergy CEO J. Wayne Leonard and Exelon CEO John Rowe said they do not want to take the risk of building new reactors.

They cite the low price of natural gas, the lack of a carbon tax to shift investment from fossil plants, and the risks of building a new reactor using the merchant model in de-regulated states.

Speaking at the Reuters Global Energy Summit held in Houston May 25, Leonard said that Entergy does not want to take the risk of building new reactors which is why it suspended two NRC license applications to build four new reactors in Mississippi and Louisiana.

He said there are too many risks the utility cannot control. He cited uncertainty in construction costs as a key item.

In a speech to Resource for the Future in Washington, DC, May 20, Rowe said there are diminished prospects for new reactors because Congress has failed to make fossil fuels more expensive via a carbon tax.

“I just don’t think nuclear has a chance in a pure marketplace without a carbon tax.” […]

Rowe also said he thinks new nuclear plants do not make economic sense in the current economic climate. He cited decreased demand for electricity in his markets and prospects for new supplies of natural gas. It is cheaper and faster to build new gas-fired plants in deregulated environments Rowe said.

“As long as we have $4 gas and no carbon price, we are not going [to build] a new nuclear power plant.”

Exelon is upgrading existing reactors to get more power, and more revenue, from them. The upgrades include new turbines, generators, and digital controls to produce more electricity more efficiently. By the time the firm is done, it will have added the equivalent of a new reactor based on the upgrades.

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