Constellation ends plans for new nuclear reactor

Power-Gen Worldwide ^ | Oct 11, 2010 | Brian Wheeler

[BigBobber]

Constellation Energy has pulled out of negotiations on a $7.5 billion federal loan guarantee to build a nuclear reactor in Maryland with its French partner Electricite de France (EDF).

In an Oct. 8 letter to Dan Poneman, deputy secretary of the U.S. Department of Energy, Constellation Energy said the “significant and ongoing uncertainty created by the Office of Management and Budget’s inability to address significant problems with its methodology for determining the projects credit subsidy cost and the unreasonable burdensome conditions a loan guarantee would require” is why Constellation Energy does not see a “timely path” to reach a set of working terms and conditions to build Calvert Cliff #3 in an economically reasonable and statutorily justifiable manner.

The statement also said that the high estimate of the credit subsidy would force Constellation and its partners to pay the U.S. Treasury 11.6 percent, or $880 million, in order to obtain the loan guarantee.

“Such a sum would clearly destroy the project’s economics (or the economics for any nuclear project for that matter) and was dramatically out of line with both our own and independent assessments of what the figure should reasonably be,” the statement read.

...

With Constellation now backing out of the project, EDF’s ambitions to help lead a nuclear renaissance in the U.S. have all but stopped completely. Constellation did say that the next steps in the loan guarantee process are for EDF to determine.

“This issue of the loan guarantees has to get solved soon. We have to understand what the government’s role is going to be in that,” said Danny Roderick, GE Hitachi Nuclear Energy's senior vice president for new plant projects, whom I also interviewed for the Nuclear Power roundtable.

[Fundamentally Fair]

The consumer always pays. That is capitalism.

The consumer always pays. When they pay by choice, that is capitalism.

[Tolerance Sucks Rocks]

Maryland “Freak State” PING!

[Tolerance Sucks Rocks]

Maryland “Freak State” PING!

[the OlLine Rebel]

The once-great utility of BG&E. Reduced to beggars thanks to commies.

[RedMDer]

Bait and switch greenies that hate America at work as usual. The steady march toward Marxism.

[Jimmy Valentine's brother]

Thanks for the double ping.

I find it fascinating that we have all these objections to using nuclear reactors to generate electrical power on land but we continue to design, buld and put to sea US Navy carriers and submarines powered by nuclear reactors.

What a bunch of crap.

[SeeSac]

The once-great utility of BG&E. Reduced to beggars thanks to commies.

Having once worked for BG&E, I would never use the word 'great' to describe them ... at least for the last thirty years.

[chimera]

There is a choice in this case. You don’t have to use their product if you don’t want to.

[chimera]

At the present time the economics favor once-through fuel use. Low fuel costs are what makes nuclear-generated electricity the most economical method. If fuel costs or waste storage costs rise, reprocessing may become economically viable, but until fossil generation cost fully reflects its true cost across the board, I am afraid we will erode the nuclear cost advantage if fuel costs rise significantly.

[epithermal]

Yes, the cost of uranium is on the way up already and I am afraid the speculators will drive it up further. There is a good article on it here:

http://oilprice.com/Metals/Commodities/Why-Uranium-Will-Make-Someone-Rich.html

"The cost "curve" for uranium is more like a hockey stick. We have a good deal of low-cost production in the world, which can be extracted for $10 to $15 per pound. Much of this comes from Saskatchewan, where high-grade ore makes for lower costs. But once demand pushes past what these mines can deliver, costs ramp up fast. The move from $20 to $50 uranium (and even higher) comes quickly. And we are pushing that curve right now. The World Nuclear Association estimates 2010 global uranium requirements at 81,000 tonnes. Putting us squarely on the far right side of the chart above.

[the OlLine Rebel]

Well, as customers we thought it was great - until Constellation bought it up. My mother thought it was great, and she’s native Baltimoron. Also had an “old” co-worker 20 years ago who had retired from BG&E, and was proud of it. They were always at your beck & call, and did things fast. They were so good they went out to out-of-state disaster areas to help them. Now we have others helping US. Sad.