by Jarret Adams

Vice President Joe Biden

According to a report by Vice President Joe Biden, the administration’s clean energy programs are expected to help create some 700,000 jobs. He said that the $787 billion Recovery Act is helping spur investment in new clean energy technologies, including wind, solar, energy efficiency and perhaps even nuclear energy. According to the ABC News blog:

“I’m pleased to report that the administration is laying the foundation for a clean energy economy that will create a new generation of jobs, reduce dependence on oil and enhance national security,” Biden begins his memo to Obama.

Biden notes in the memo that “Recovery Act investments in renewable generation and advanced energy manufacturing of $23 billion will likely create 253,000 jobs and leverage over $43 billion in additional investment that could support up to 469,000 more jobs, putting us on track to meet the goal of doubling our renewable energy generation, including solar, wind and geothermal, in just 3 years.”

Smart grid investments through the plan are expected to create some 43,000 jobs. AREVA T&D is participating in one of these initiatives to develop the smart grid systems.

Regarding nuclear energy, the Vice President also reports that “by the end of our first two years in office, we will have provided conditional commitments for loan guarantees for two nuclear power operators to add three to four new nuclear reactors.”

That’s great, but weren’t there four companies listed as finalists for the loan guarantees? And DOE officials have said that the first loan guarantee for a nuclear project could be issued by the end of this year.

Congressman Mike Simpson spoke on the U.S. House floor today during debate of the energy and water appropriation bill:

The Loan Guarantee Program is one of the few policy tools we have that delivers immediately available, market-ready, innovative clean energy technologies that will have a positive impact on our economy. Congress has authorized $2 billion in loan guarantee authority for front-end nuclear facilities. D.O.E. should be recognized for their work creating a Loan Guarantee Program that has sound criteria to ensure the protection of taxpayers and award guarantees to the most creditworthy projects.

A little bit about the loan guarantee program: The Department of Energy’s Loan Guarantee Program is designed to facilitate financing for sound investments in innovative, new clean energy facilities, like nuclear power plants and enrichment facilities. However, it’s not a government grant or a “giveaway.” Applicants must demonstrate a solid business plan with technology to reduce CO2 emissions. Another important consideration, according to DOE, is the ability to show “reasonable prospect of repayment” of the loan.

In the current credit environment, capital is less readily available for large scale projects that have the potential to create thousands of new jobs. Investments in base-load energy sources like nuclear power promote American energy security by making the nation less reliant on foreign imports and will help America meet its energy needs with CO2-free sources.

To learn more about the Loan Guarantee Program, check out this page on the DOE’s website.

Dan Yurman at Idaho Samizdat reprints an excellent editorial from Sunday’s Idaho Falls Post Register. The long and short of it is that it’s silly to pit one company against another when we’re talking about loan guarantees for future enrichment plants in the US… we need as many as we can get:

There are several idiotic debates under way at the moment — but pitting a uranium-processing plant in Idaho Falls against another proposed in Ohio has to top the list.

Watching the jockeying for $2 billion in federal loan guarantees makes for intriguing political theater. But it’s silly. The nation really needs both. . . .

Having three companies involved denies any one of them a chokehold on domestic fuel supply. It also provides a geographically dispersed network. . . .

This is no time for winner-takes-all politics. If Congress expands the loan-guarantee program, it does not mean more federal spending. It merely allows these companies to get financing more easily and cheaply.

We’d also like to add that these loan guarantees, in addition to costing the taxpayer nothing, would create jobs in the present for the folks who build the enrichment plants and in the long term, in steady, stable, community-supporting jobs in a high-tech and green industry.

The nuclear energy industry is not unique in its ability to apply for loan guarantees. The federal government has decades of experience administering loan guarantees and other financial support for critical infrastructure projects. These projects span a broad array of industries from energy to shipbuilding to transportation to affordable housing. In fact, the $20.5 billion allocated for new nuclear energy facilities is less than 2 percent of the government managed loan guarantee portfolio, which exceeds $1 trillion. (This includes $18.5 billion for new nuclear power plants and $2 billion for fuel cycle facilities, such as enrichment plants.)

Loan guarantees do not represent a subsidy, let alone free money to the nuclear industry as some claim. The loan guarantee program is self-financing, requiring the companies that seek the guarantees to pay all costs to the government for providing them. A well managed loan guarantee program will cost tax payers nothing and yet provide them with the benefits of affordable, emission-free electricity and reduce our reliance on imported sources of energy.

The loan guarantee program was created under Title XVII of the Energy Policy Act of 2005. It was created in direct response to the monumental energy challenges we face, in order to spur investment in “innovative technologies” that “avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases.” The U.S. EPR™ reactors under consideration here in the United States would do just that, and we are gaining experience from the EPR reactors already under construction internationally. 

The interest in the U.S. government program has been tremendous, with DOE announcing applications for guarantees for 21 new reactors totaling $122 billion, more than six times the allotted amount.

Nuclear facilities are capital intensive projects, often requiring investments equaling half the market cap of the companies that seek to build them. Although nuclear power plants require more of an investment upfront, they have proven wise long-term investments because of low operating and maintenance costs. They also provide predictable revenue streams, not to mention clean and reliable baseload generation for electricity customers. Loan guarantees are essential to offset the disparity in scale between project size and company size. Such assurances also mitigate risks of charting the waters of licensing and regulatory processes which have been effectively revised but still could give pause to the investment community.

President Obama has expressed a clear goal to lift our country out of the current economic crisis and strengthen our position as leaders in the 21st century by way of a clean, green and more energy independent economy. The loan guarantees for nuclear energy reinforce this vision by encouraging investment in domestically produced energy, capable of helping the country tackle our ambitious climate goals and employ thousands of well-trained, well-paid Americans.