Tuesday, June 27, 2006

Bill & Melinda Gates and Nuclear Power

It is being proclaimed from AAEA, The New York Times, the New York Post, Nuclear Energy Institute, other environmentalists and the black community that nuclear power is about to take off (again). The Energy Policy Act of 2005 provided every protection needed to build the first six reactors. Multiple utilities have plans to submit applications to the Nuclear Regulatory Commission (NRC). But no utility has submitted an application to the NRC because of concerns about the reaction of Wall Street. There is a cautioned reluctance about submitting that first application (second, third & 4th ones too) because Wall Street remembers the financial consequences of the delays that developed during the first phase of nuclear power plant construction and operation.

Kevin Book, VP with Friedman, Billings, Ramsey & Co (FBR) recently gave a sobering statement in Senate testimony about the requirements of Wall Street to invest in nuclear power. He basically stated that nuclear is in competition with any of a number of other portfolio categories that investors might consider, depending strictly on the return. He made it clear that even under the best of circumstances, nuclear power will be a risky investment because of the new reactor technology being used and the possibility of delays (for whatever reason).

So maybe the Gates Foundation, in partnership with the utilities, should build the first six reactors or the second six. The long term return on investment is assured and the immediate nervousness about short term return on investment is solved. Climate change, smog, hydrogen production and electricity needs justify an accelerated schedule of building new nuclear power plants in the U.S. and around the world.

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