WASHINGTON—Congressional appropriations conferees announced today that they have taken steps to implement the clean-energy loan guarantee program authorized by the Energy Policy Act of 2005 by endorsing significant loan volume for capital-intensive energy projects for fiscal years 2008 and 2009. Since there are no actual appropriations involved, loan volume simply represents the dollar value of U.S. Government-backed loan guarantees that can be issued; it does not represent an outlay of taxpayer dollars.
The agreement will help encourage construction of new nuclear power plants and advanced coal-fired power plants capable of reliably generating large amounts of electricity to help meet the U.S. economy’s baseload energy needs. It is projected that that electricity demand will increase at least 30 percent by 2030, even with conservation and efficiency measures that are under way and being considered.
“This agreement is an extremely positive development to help address looming energy and environmental challenges,” said Frank L. (Skip) Bowman, the Nuclear Energy Institute’s president and chief executive officer. “Energy companies already have begun submitting license applications for new, advanced-design nuclear power plants to the Nuclear Regulatory Commission, and a number of additional applications are anticipated over the next two years.
“The availability of loan guarantees to facilitate debt financing on reasonable terms for the first wave of these applications will help reduce uncertainties surrounding these capital-intensive projects, and ultimately will lower the cost of the electricity produced by these new power plants to the consumer. Loan guarantees will not involve the expenditure of any federal tax dollars when the clean-energy projects are successfully completed. That makes them a win-win-win for the environment, the economy and consumers.”
As stipulated in the 2005 energy legislation, sponsors of these clean-energy projects will be required to pay the Department of Energy a fee (similar to an insurance premium), based on the risk of the project, before the Secretary of Energy can approve a loan guarantee for each project. Title XVII of the Energy Policy Act empowered the Secretary of Energy to provide loan guarantees for up to 80 percent of the total project cost of “innovative technologies” that “avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases.”
Nuclear power plants operating in 31 states provide more than 70 percent of all U.S. electricity that comes from sources that do not emit greenhouse gases or controlled pollutants covered by the Clean Air Act. Also, increased electricity production from nuclear plants accounts for the largest share of reported voluntary reductions in greenhouse gas emissions under the U.S. Department of Energy’s voluntary Climate Challenge and Climate Visions program – 54 percent of the reductions reported in the electric sector and more than one-third of the reductions from across the entire economy.
“The nuclear energy industry commends Sens. Byron Dorgan and Pete Domenici and Congressmen Peter Visclosky and David Hobson for their leadership in the implementation of an effective loan guarantee program for the benefit of our nation. Clearly, they recognize the value of emission-free nuclear power plants as part of a diverse energy portfolio that enhances U.S. energy security,” Bowman said.
Report language accompanying the appropriations bill allocates $38.5 billion in loan guarantee volume for clean-energy technologies, including: $18.5 billion for new nuclear power plants, $2 billion for uranium enrichment facilities, $8 billion for advanced coal-fired facilities and $10 billion for renewable technologies. None of these loan guarantees for nuclear, coal or renewables involve appropriated dollars.
Subject to implementation of an across-the-board funding cut to all Department of Energy programs of 0.91 percent, conferees also agreed to appropriate $135 million in fiscal 2008 for the Department of Energy’s Nuclear Power 2010 program and $74 million for the Next Generation Nuclear Plant initiative. Both of these programs are cost-shared, industry-government partnerships designed to reduce the technical, regulatory and institutional uncertainties associated with construction of new nuclear power plants.
Conferees also agreed to appropriate $390 million in fiscal 2008 for DOE’s Yucca Mountain repository program for used-nuclear fuel from commercial nuclear power plants and high-level radioactive waste from U.S. defense programs. This is a reduction of $105 million from the Administration’s budget request and $55 million below the FY07 funding level. Of the $390 million, $189 million would come from the federal nuclear waste fund into which consumers of nuclear-generated electricity pay approximately $750 million each year. The remainder would come from the Department of Energy’s atomic energy defense appropriation.
The underground repository planned for Yucca Mountain, Nev., is a vital part of an integrated used nuclear fuel management strategy that also includes interim storage of
used fuel at a limited number of sites and closing, through reprocessing, the nuclear fuel cycle.
The conferees also provided $181 million for the Advanced Fuel Cycle Initiative for developing advanced nuclear fuels technologies to close the nuclear fuel cycle. These technologies will, in the long run, enable recycling of nuclear fuel in nuclear power plants, reclaiming nearly 90 percent of the energy contained in the used fuel and reducing the volume of waste by-product that requires permanent disposal.
“The Department of Energy should devote the resources necessary to meet its stated goal of filing a license application for the Yucca Mountain repository with the Nuclear Regulatory Commission by June 2008,” Bowman said.
If licensed by the NRC, the state-of-the-art repository would be built in the Nevada desert nearly 100 miles northwest of Las Vegas.