Nuclear Power Plant Funding

This is going to be a problem. [Link]

All of these discussions, and phony debates, ignore a critical element - nuclear plants don’t get built because politicians or activists want them (or even because we are running out of power) - nuclear plants get built:

1) when the regulatory climate in a particular state allows for recovery and financing of these costs
2) when individual utilities are financially strong enough to incur the debt and raise the cash to see through the 10+ year process from site selection through actually powering up the reactor and delivering power into the grid

Let’s tackle #2 first. The estimates for building a nuclear plant are between $5B and $12B. Note that this doesn’t take into account the “time value” of money - you need to get this money up front now and pay interest on it for all the years until the plant starts earning its keep - and this will substantially increase the cost. I don’t have specific information but when I was in the industry I was told that on the plants built in the 70’s maybe 20-40% of the total cost was “capitalized interest”, or the interest on the construction debt while the plant was being built. It is true that the 70’s were a time of high inflation, but we are seeing rising prices (and scarce availiabity) of key construction materials today, too. Let’s say that for discussion purposes this $5B to $12B becomes $7B - $15B in costs in nominal (not real dollars, but nominal dollars are the ones that you have to pay out).

And even if the money is there, no one wants one in their backyard.