Aborted nuclear loan guarantee for Calvert Cliffs 3 causes global ambitions for EPR to "cool"

Peggy Hollinger of the Financial Times reports that Constellation Energy's withdrawal from the Calvert Cliffs 3 new reactor project in Maryland -- due to its unsuccessful attempt to transfer hundreds of millions of dollars of financial risk onto U.S. taxpayers -- has sent shock waves through the French government owned companies Areva and Electricite de France. She writes of the Areva Evolutionary Power Reactor's (EPR) global prospects "...the EPR has suffered a series of devastating blows, and even the [French] government today questions whether it has wasted years of research and billions of euros on a highly complex white elephant."

Other top nuclear loan guarantee applicants could also succumb to economic forces as has just happened to Calvert Cliffs 3

NIRS, Public Citizen, South Carolina Sierra Club, and former NRC Commissioner Peter Bradford have warned in a press release that the same forces -- skyrocketing new reactor construction costs, decreased demand for electricity, competition from renewables and efficiency, low natural gas prices, etc. -- which just undermined the Calvert Cliffs 3 new reactor proposal in Maryland are also battering away at the new reactor proposals in Texas (South Texas Project Units 3 and 4) and South Carolina (V.C. Summer Units 2 and 3). Calvert Cliffs, South Texas Project, and Summer were the top three federal nuclear loan guarantee finalists after Vogtle Units 3 and 4 in Georgia, which the Obama administration awarded a conditional $8.3 billion taxpayer-backed loan guarantee last February. The audio recording of the full press conference is also posted online.

"Shockingly high" financial risks doom new reactor proposal in Maryland

The New York Times' Matt Wald reports that low natural gas prices, no price on carbon dioxide emissions from fossil fuel combustion, high new reactor construction costs, and the ongoing economic recession have dimmed the nuclear power industry's hopes for a "renassiance" as one of the lead new reactor proposals -- at Calvert Cliffs nuclear power plant on the Chesapeake Bay in Maryland -- may very likely be cancelled. ClimateWire's Peter Behr declared the "nuclear renaissance" -- if not dead, then comatose, given Constellation's precipitous abandonment of Calvert Cliffs 3.

Constellation turns down Obama administration offer of $7.5 billion nuclear loan guarantee for proposed new reactor at Calvert Cliffs in Maryland

Constellation Energy/Electricite de France's (EDF) proposed new Calvert Cliffs 3 reactor on the Chesapeake Bay in Maryland was widely regarded as next in line for a taxpayer-backed nuclear loan guarantee. But fissures between Constellation and EDF hinted that the project was being laid on shaky financial foundations; such problems at one of the lead new reactor proposals in the U.S. cast further doubt on the "nuclear renaissance," leading Areva -- designer and supplier of the new reactor for Calvert Cliffs 3 -- to slow down its development of a large nuclear component factory in Virginia, stating it was "adjusting our construction schedule to meet our customers' planning timetables..." and that without "sufficient loan guarantee funding . . . customers are delaying the start of projects." Then, Constellation "disappointed and shocked" its business partner EDF by "unilaterally" rejecting the Obama administration's offer of a $7.5 billion loan guarantee due to the "unworkable" 12% credit subsidy fee -- amounting to $880 million -- required by the Office of Management and Budget due to its "duty to protect the taxpayers' money"; Constellation made clear its withdrawal from the project, casting doubt on not only other proposed Areva "Evolutionary Power Reactors" (EPRs) across the U.S., but the entire "nuclear renaissance" in general. EDF then stated it was "ready to commit further resources" to the proposed new Calvert Cliffs reactor, as well as to "shoulder 100 percent of the risk and burden until construction begins" (a federal loan guarantee would then shift 80% of the financial risks onto U.S. taxpayers), but the now acrimonious relationship between Constellation and EDF could hinder this. Despite this, Constellation has offered to sell its 51% stake in Calvert Cliffs 3 to EDF for $1, clearly showing its desire to abandon the project ASAP.

So-called "nuclear renaissance" pushed back "a decade, maybe two" as proposed new Maryland reactor bites the dust

The Center for American Progress's Joseph Romm quotes Exelon Nuclear's CEO, John Rowe, as saying that due to the low price of natural gas and no price on carbon -- not to mention the skyrocketing construction costs of new reactors -- the nuclear renaissance has been pushed back "a decade, maybe two...We think natural gas will stay cheap for a very long time,” Rowe said in an interview today at Bloomberg’s headquarters in New York. “As long as natural gas is anywhere near current price forecasts, you can’t economically build a merchant nuclear plant...Absent a price on carbon dioxide emissions, gas would have to rise to $9 or $9.50 to make the reactors economically attractive," Rowe said. In addition to links to other good Romm blogs, this entry includes an analysis by CAP's Richard Caperton on Constellation Nuclear's withdrawal from the Calvert Cliffs 3 new reactor proposal in Maryland -- including Constellation's rejection of a $7.5 billion nuclear loan guarantee by the Obama administration because the company would still face too much of the financial risks, rather than having them transferred to taxpayers.