Federal taxpayers have spent hundreds of billions of dollars subsidizing nuclear reactors since the industry’s inception in the 1940s, according to a new report from government budget watchdog Taxpayers for Common Sense (TCS).
The report, Understanding Nuclear Subsidies, catalogues the range of federal subsidies and supports for the industry, including foregone royalties on uranium from federal lands, funding for development and demonstration, loan guarantees for new construction, covered liabilities for accidents, access to federal facilities, and tax credits.
“The time has come to stop the endless cycle of nuclear subsidies. From construction to decommissioning and everything in between, nuclear power is only possible because of the endless stream of taxpayer subsidies,” said Autumn Hanna, vice president of TCS.
Nearly all commercial nuclear reactors currently operating in the U.S. were built before 1990. Rather than decreasing over time, costs for building new reactors has escalated. The high cost risk associated with nuclear plants made them an unattractive option for utilities building new generation capacity.
“The problem is that no matter how generous the subsidies, nuclear power continues to be riddled with cost and risk concerns that scare away private financial backers, leaving the industry asking for more taxpayer handouts. Taxpayers need to end this one-way love affair,” Hanna added.
Most recently, the Bipartisan Budget Act of 2018 included a renewal of the nuclear production tax credit. This expired credit was first enacted in the 2005 Energy Policy Act, but it was extended indefinitely by removing any necessary in-service date for qualification. No plants currently qualify the subsidy, which could cost taxpayers $6 billion.
“With extremely high capital cost, significant technology risks and long-term unresolved waste disposal problems, this industry isn’t a cheap date,” Hanna continued.
Loan guarantees are another nuclear subsidy the report highlights as a high risk for federal taxpayers. Created in 2005, the Department of Energy Loan Guarantee Program has considered several nuclear recipients. Most never came to fruition because projects ceased construction after running into problems, despite the offer of federal backing. One notable exception, the Vogtle reactor project in Georgia currently holds $12 billion in federally backed loans, but the project continues to encounter delays and cost overruns.
As recently as last December additional subsidies for nuclear reactors were being debated on Capitol Hill and are expected to be raised again this year. Subsidy proponents are promoting nuclear reactors as part of a climate solution. But the report concludes that the costs and time frame for getting new reactors online makes it a costly unrealistic solution that could crowd out other more promising investments and that taxpayers should not be forced to provide even more subsidies.
“We must address the current climate crisis we face but throwing more cash at nuclear power is not going to help and will only distract us from taking the real action we need. Bottom line for taxpayers we just can’t afford it,” Hanna concluded.