Historically, if you want big civil engineering projects regarding energy, "it's the gov't stupid!". Out right ownership of energy production and distribution, constructionist and management, in most of the world and even in parts of the United States are often wholly owned state enterprises. Those of us at left-atomics.blogspot.com have worked on expanding this role, against privatization and in defense of rate payers and workers rights.
In the United States, because energy production is mostly in the hands of investor owned regulated or merchant utilities. Thus, expansion of any energy generation, carbon or non-carbon, is almost wholly dependent on private finance, ownership and, equally with government regulations, subsidies and other benefits accorded to the profit-making in the industry.
Recently, the great climate activist blog Bravenewclimate.com has run a series of articles exploding the myth that renewables are cheaper than nuclear energy (of any generation of nuclear energy in fact). This blog represents the snow-balling trend of anti-climate change scientists and engineers rejecting hitherto devotion to renewables as being able to even make a dent in carbon out put.
Now, my Diary here is not to kvetch on renewables. No, really, stop laughing! I want to talk about, free thinking it out, and otherwise opine on the issue American energy financing. I will make some generalities about both nuclear and renewables and if people want to try to tear them apart, go at it. Not a problem.
My proposal is how to finance future non-carbon energy. Renewable energy advocates quit rightly whine that nuclear would receive, if based on actual MWs produced, the lion share of any funding from Congress on non-carbon generation. That any tax on carbon would go to nuclear, etc etc ad nausium. But what is the basis for this complaint. Renewables are totally subsidized. I don't mean all their costs are subsidized. This would be factually incorrect. But the subsidies they do get, almost 2 cents a kwhr would, if they disappeared, almost would almost certainly shutdown all renewable projects today. Not just new renewables, but running ones. The only 'safe' ones would be previously installed roof-top solar PV since they are "paid" for (up to 50%) by the tax payer already. Nuclear would get "the lion's share" because it produces 70% of the entry country's non-carbon energy right now. So, yeah, nuclear would get the lion's share of any subsidy if given out by virtue of what it has delivered and what it could deliver. Nuclear is proven.
Nuclear of course...that is online nuclear, plants that have been paid for or mostly paid for, are totally self-sustaining financially.
But everyone who manufactures or operates any non-carbon generation wants all these subsidies, delivered in the U.S. as the "production tax credit" or PTC. These are outright subsidies given to the manufactures or operators of non-carbon energy generation.
Those of us who are generally on the pro-nuclear side of the equation laugh out loud when renewable advocates, the less sophisticated ones, put on their blinders and yell "but nuclear gets all these subsidies and it we wouldn't have any if they did get any..." Not realizing that on a KWhour per KWhour basis, renewables are the singularly most subsidized energy source the world has ever known. Sorry, I promised not kvetch.
Let's speculate, the point of this diary. So...let's get rid of subsidies. Let's say we get some sort of billion dollar tax raising carbon tax. I HATE subsidizing profits. I'm for it if that is the only way to phase out coal and all fossil generation in the world. But generally I HATE it. This is why I'm for nationalizing energy resources, to bring this back under people's control and not profiteers control. Let the revenue return to our coffers and not stock holders. But we don't. So what can we do.
Let's take that carbon tax money, the cost of which, if collected, cannot/should not/better not be passed onto the ratepayer (you and I) but comes out of corp profits STARTING with stock options and executive salaries, and set up a TRUE clean energy bank. Or, more in corp-speak: "The Clean Energy Bank of the United States of America, a wholly owned financial institution of the People of the United States of America. (CEBUS)"
I have written previously here about such a CEBUS but I wanted to expand a bit. CEBUS would be set up similar to the NRC or FDA, that is under the control of the United States but commissioned to have a decree of independence free from lobby, Congressional and Executive pressure. But I don't want to dwell on organizational issues.
The Charter of such a bank would mandate the financing of any renewable energy resource (including R&D projects) based on such technologies past history and potential returns. Personally, I would exclude the fake marketing scheme of "Clean Coal" since there are other factors inovled with coal other than CO2 mitigation. I think part of the Charter of CEBUS would be any technology that contributes to the phasing out of fossil fuel. This is of course debatable but it's what I would consider.
With an initial 3 year grant from Congress and the Federal Reserve of $300 Billion the disbursement of funds would be done on a very low interest rate. This money would be paid back initially through non-passing-along carbon taxes on natural gas, oil and coal. The point is to deploy non-carbon energy generation, not to make money. The low interest rate then would be a mandate from the Federal Government, immune to actual Fed monetary policies. Payments back to CEBUS would only have to be made once revenue starts to flow or when the facility(s) goes Commercial On-time Delivery. Thus, local electrical rates will not have to be increased to such as nuclear operators ask for now to help finance and payoff that financing in advance. In fact it could be a condition of any such loan agreement that no rate increases be asked for by any utility until such generation starts pushing out electrons.
Most commercial loans run from 5 to 20 years. Loans to nuclear plants run 10 to 15 with a majority, I believe, at the 15 year mark. A $4 billion loan for a 1150MW AP1000 NPP would at a low 2% cost about $320 million a year to pay off. But a, say, $40/MW hr for wholesale prices, this would only cost about 3 cents a KWhr to pay. QED.
Eventually, these projects (regardless of they were nuclear, wind or solar) would start paying back these loans and, the CEBUS would become self-sufficient. I have NOT calculated the revenue flow from a carbon tax. The higher the tax, the less Congress or the Fed have to come up with the money. The wiki entry on the carbon tax has a proposed carbon tax on natural gas at over $8 cu ft....when the price of gas is $3 cu ft. This is quite insane, would drive everyone concerned into a quick bankruptcy. We want to avoid this. Carbon taxes should be used, if implemented the way I describe above, to give an incentive for utilities to switch to nuclear and other non-carbon generation and to raise money for something like the CEBUS. It is not designed to destroy the planetary economy. Or, is should not be. That is why I'm against a consumer driven carbon tax and instead support a corporate carbon tax based at the point of production and large scale use.
Obviously, from my point of view, such a CEBUS would provide massive low interest loans, not subsidies, to the nuclear industry and we could generate hundreds of Gigawatts of clean energy, provide R&D for Generation IV low-waste nuclear plants and transportation fuels that that are carbon-neutral.
D.