The Department of Energy is about to guarantee $8.3 Billion of loans to the Southern Company and its partners to build two new nuclear reactors in Georgia. That is 15 times the size of the loan guarantee to Solyndra, the solar energy company that failed last year.
How bad an investment is this nuclear loan guarantee?
Nuclear reactors are so bad an investment that Wall Street won't touch them. Moody's has called them "bet-the-farm-investments." Moody's has downgraded the financial ratings of the utilities that are planning to build them. Citibank says that "Three of the risks faced by developers -- Construction, Power Price, and Operational -- are so large and variable that, individually, they could each bring even the largest utility company to its knees financially."
Even nuclear industry executives call new reactors "a large speculation" and say that they "are not economic" because of low gas prices, excess generating capacity and low growth in demand. Two of these executives have admitted that "We can't make the numbers work." The Economist magazine declared in its March 10th issue that nuclear power is "the dream that failed" -- the plants are too costly and uncompetitive with alternatives.
Wind, solar and energy efficiency are all better investments, and their costs have been falling for years. So, why are we wasting $8.3 billion on corporate welfare to an industry that, for five continuous decades, has not been able to operate without large government subsidies?