low natural gas prices hamper new nukes

U.S. regulators are expected to approve four new nuclear reactor builds later in 2011, but low natural gas prices will make it difficult for more plants to proceed, an analyst with Standard & Poor’s was reported as saying.

The accident at Tokyo Electric Power Co's Fukushima plant in March will boost likely regulatory and operating costs for existing and new U.S. reactors, Reuters quoted S&P as saying. But that alone will not prevent construction of some new reactors.

Instead, the big factor stalling U.S. nuclear construction has been the continuing low cost of natural gas and the high cost of building a new reactor, not any new Fukushima related costs, the S&P analysts were quoted as saying.

"Nuclear generation must make economic sense. Even with (federal) nuclear loan guarantees, gas has to be north of $6 (per million British thermal units) for new nuclear generation in the U.S. to make sense and gas clearly has not been cooperating over the past two years," Reuters quoted Aneesh Prabhu as saying.

Prabhu said gas prices rose following the Fukushima accident but were not expected to top $6 until the middle of the decade.

The U.S. Nuclear Regulatory Commission is expected to approve combined construction permit and operating licenses for units at Georgia Power’s Plant Vogtle in Georgia and Scana Corp.’s Summer nuclear power plant in South Carolina. Both plants will use Westnghouse’s 1,154 MW AP1000 reactor.

The NRC issued the Final Environmental Impact Statements for the Summer plant on April 19 and Vogtle plant in September 2010. The statements bring both plants closer to getting their licenses.

The U.S. Department of Energy released $8.3 billion in loan guarantees for the Vogtle plant in February 2010.

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