A lot of myths accrue to France and the French. For example, that the French military isn't very very very good at defeating its enemies. Or that the French don't get fat. Or have bad taste in comedy, or can't make decent action movies (most untrue!), or are peculiarly racist towards immigrants. (Although ... another post.)
Me, I love France in that peculiar way that (I like to believe) only Americans can. So much of the place reminds me of home!
But still, I gots to punch the myths. The latest one I've run into is that France has discovered a way to make nuclear technology pay that doesn't involve huge dollops of taxpayer money. As with so many things, the proof comes from Finland, a country I really have to visit soon.
Now, I want to make clear that I am not opposed to spending large dollops of taxpayer money on nuclear energy. I am agnostic. But I am pretty clear that such is what needs to be done in the absence of serious carbon caps, high carbon taxes, of further run-ups in the price of fossil fuels, because nuclear power plants are just plain expensive and very hard to build.
Frex the saga of the Areva reactor under construction in Finland. As of September 7th of last year, it had already run 25% over its €3 billion budget and had its opening delayed at least two years. Bloomberg quoted Robin Kendall, director of project finance at Société Générale: “You have to go in with your eyes wide open.” Poor Société Générale is one of the banks that lent €1.95 billion euros to the Finnish national utility for its new reactor. The Finns refused to pay Areva for the overruns, which has blown a hole in the French company's bottom line.
Were the banks just stupid? Is Robin Kendall an idiot? Have super-canny Finnish negotiators stiffed hard-working French financiers? The answers are no, no, and no. Rather, the French government guaranteed the loans that the Finnish utility took out to finance its share of the project ... and French taxpayers may yet wind up eating the losses.
Under an Obama Administration, a real cap-and-trade system (you, know, with caps) may make subsidies and guarantees unnecessary. And even if it doesn't, subsidies and guarantees may in fact be a good idea.
But at the current state of play, they're very necessary to make nuclear economic ... and without carbon caps or taxes, subsidizing nuclear power seems like an unwise use of limited public resources.
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