What it May Mean for Nuclear Loan Guarantees
In the immediate aftermath of the Solyndra bankruptcy, I had the sense that nuclear proponents saw the disaster in the solar industry as a vindication of the nuclear industry.
Not so fast! The fact that one solar project tanked is not going to convince die-hard fans of renewables that anything is wrong with renewable projects, and it is certainly not going to cause a rush to the nuclear side. There will be reasons cited by solar proponents (there already are) why this is an exception, one small blip in an otherwise sterling record.
And maybe it is an exception. I actually hope it is, because the other possible trend I see emerging from this meltdown is that is will give a black eye to all loan guarantees. Particularly in the current budget environment, where everyone is looking for easy places to cut, it will be very tempting to put loan guarantees on the budgetary chopping block. If a nice, safe solar project went bust, some may say, a big, complex nuclear project may be even more risky.
I am already seeing some possible fallout from the Solyndra failure. Although Sen. Lisa Murkowski is a supporter of loan guarantees (as well as a supporter of both the nuclear and renewable industries), she has reportedly told the renewable industry to expect greatly restricted federal funding. It's not clear just how much of this restriction is a consequence of the bankruptcy and how much is a general consequence of the budget discussions, but I think it will be difficult for Congress to cut loan guarantees for one industry without also cutting others. She is recommending to the renewable energy industry that they and other industry sectors work together to form a broad coalition.
While it is too soon to panic, the nuclear industry should not have its head in the sand either. In fact, the terms of the loan guarantee program for nuclear projects (in the form of large up-front fees) has caused some to reject the option anyway. If the nuclear renaissance is to continue in the United States, it is not too soon to begin to consider other options.