Key Issues
Financing New Nuclear Power Plants
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January 2009
Key Points
January 2009
Key Points
- Experts agree that the electric power industry must invest $1.5 trillion to $2 trillion in new generating capacity, new transmission and distribution infrastructure, and energy efficiency and demand response technologies by 2030.
- The Energy Policy Act of 2005 provides limited investment stimulus for the construction of clean energy facilities, including nuclear power plants.
- Loan guarantees are important to new nuclear plant financing for companies operating in both unregulated and regulated markets.
- The loan guarantee program is not a subsidy. Unlike other federal loan guarantee programs, project developers are required to pay the cost of the loan guarantee, as well as the full cost of administering the program.
- The loan guarantee program provides benefits to consumers of electricity. Because it lowers the cost of capital for new reactors, the plants produce lower-cost electricity than they would in the absence of the loan guarantee.