DOE Announces Loan Guarantee Applications for Nuclear Power Plant Construction
October 8, 2008 // Published as a news service by IHS
The U.S. Department of Energy (DOE) announced it has received 19 Part I applications from 17 electric power companies for federal loan guarantees to support the construction of 14 nuclear power plants in response to its June 30, 2008 solicitation.
The applications reflect the intentions of those companies to build 21 new reactors, with some applications covering two reactors at the same site.
All five reactor designs that have been certified, or are currently under review for possible certification, by the Nuclear Regulatory Commission (NRC) are represented in the Part I applications.
DOE also has received Part I applications from two companies for federal loan guarantees to support two different front-end nuclear facility projects.
DOE and the U.S. nuclear industry have partnered to share the cost of programs to improve the design and licensing processes of the first nuclear power plants to be constructed in the U.S. in over 20 years.
The industry is putting the results of those programs to use and asking the DOE to provide loan guarantees in the amount of $122 billion, which significantly exceeds the $18.5 billion in loan guarantees available under the nuclear power facilities solicitation.
The aggregate estimated construction cost of these 14 projects is $188 billion. If all projects are constructed, they would add 28,800 megawatts of clean, emissions-free, base load electric generating capacity.
DOE also has been asked to provide loan guarantees in the amount of $4 billion for front-end nuclear facility projects, which exceeds the $2 billion in loan guarantees made available for this type of project in the solicitation.
License applications for the nuclear power projects are being reviewed by the NRC as part of the new combined license process, which simplifies and adds more predictability to the process of licensing new nuclear facilities, thereby reducing financial risk. The DOE Loan Guarantee Program Office (LGPO) is concurrently reviewing the financial and construction aspects of the projects as part of its initial review and selection process and will follow closely all aspects of the NRC licensing process.
DOE will review the Part I submissions and assign initial rankings of the projects based on the factors summarized in each solicitation. The initial project rankings of the applications will provide applicants information to help them determine whether to complete and submit to DOE a Part II application.
Regardless of their position in the initial queue, all applicants who submitted Part I applications are invited to submit Part II of their applications in accordance with the solicitations issued. Part II submissions, which are due on Dec. 2, 2008 for the front-end nuclear facilities projects and on Dec. 19, 2008 for nuclear power facilities, will be thoroughly vetted by the LGPO. DOE will review Part II submissions, and then select final projects to enter into negotiations that will lead to the eventual issuance of loan guarantees.
The authority to offer and enter into loan guarantees for nuclear power projects and front end nuclear facilities was granted by Congress in the 2008 Consolidated Appropriations Act. Similar authority was granted under that act for loan guarantees for renewable energy and fossil energy projects for an overall total of up to $38.5B.
Pursuant to this authority, DOE issued solicitations for up to $30.5 billion for energy efficiency, renewable energy and advanced transmission and distribution technologies, nuclear power facilities and advanced nuclear facilities for the 'front-end' of the nuclear fuel cycle.
DOE issued a subsequent solicitation on Sep. 22, 2008 for up to $8 billion to support coal-based power generation, industrial gasification and advanced coal gasification facilities projects that employ advanced technologies that avoid, reduce or sequester emissions of air pollutants and greenhouse gases.
The DOE Loan Guarantee Program, authorized by Title XVII of the Energy Policy Act of 2005, aims to facilitate early commercial use of new or significantly improved technologies in energy related projects. For more information, visit the DOE Loan Guarantee Program web site.
Source: U.S. Department of Energy (DOE).