Letter to Japanese Government Opposes Loan for Texas Nuclear Reactors
WASHINGTON, DC, February 24, 2011 (ENS) – More than 170 organizations from the United States, Japan and 13 other countries today sent a letter to Japanese Prime Minister Naoto Kan and members of his Cabinet urging Japan’s government to reject a multi-billion dollar loan for construction of two new nuclear reactors at an existing two-unit power plant in south Texas.
Letter signers included environmental, consumer and peace organizations and small businesses from around the world, including more than 135 U.S. organizations, 21 Japanese groups, and groups from 13 other countries across Europe and Asia.
They object to the actions of Nuclear Innovations North America, NINA, a consortium headed by NRG Energy, which has asked the Japan Bank for International Cooperation for billions of dollars in loans to build the new reactors to supplement the billions in loans it hopes to obtain from the U.S. government.
Toshiba and Tokyo Electric Power are minority investors in NINA.
NINA says the proposed expansion of the South Texas Nuclear Project located in Matagorda County would add two additional units that would generate approximately 2,700 megawatts – enough to power more than two million Texas homes.
The South Texas Nuclear Project (Photo by Dan Pancamo)
The site was originally constructed for four units and is currently equipped with sufficient infrastructure, land and water rights to accommodate two additional units, NINA said in a statement in January.
“Constructing the two additional units at the site will introduce state-of-the-art and proven Advanced Boiling Water Reactor nuclear technology into Texas,” the company said. “ABWR is the only advanced nuclear technology that is both certified by the Nuclear Regulatory Commission and is fully engineered, having been built on time and on budget four times.”
“The addition of two new reactors will provide energy that is both emissions-free and made in the Lone Star state. It is a responsible approach to meet the growing demand for energy and need for new baseload generation in Texas,” said Juan Garza, president of advanced technology for NRG Energy.
But in their letter, the groups state that the projected cost of the South Texas Nuclear Project has soared from $5.6 billion in 2006 to as much as $18 billion today. The letter warns that, “…with a deregulated, competitive power market and some of the lowest wholesale electricity prices in the country, Texas is a particularly risky U.S. state in which to invest in expensive new reactors.”
“We don’t believe that JBIC or the Japanese government yet fully understand the extraordinary financial risk of investing in this project,” said Michael Mariotte, executive director of nonprofit Maryland-based Nuclear Information and Resource Service, which coordinated the letter.
“If these reactors were projected to be profitable, Wall Street bankers would be lining up to provide them loans,” said Mariotte. “The reality is that private investors in the U.S. shun new reactor projects because the risk far outweighs the potential rewards. That’s why utilities like NRG are trying to force taxpayers in the U.S. – and now taxpayers in Japan – to bear the burden of their dangerous, ill-advised nuclear projects.”
“The Japanese Government is determined to rush headlong into nuclear exports, as part of its ‘package infrastructure’ export policy, but it has yet to carry out any risk assessment for this policy,” said Hideyuki Ban, co-director of Citizens’ Nuclear Information Center in Tokyo.
Karen Hadden, director of the Sustainable Energy and Economic Development Coalition in Austin, Texas, said, “NRG has been desperately trying to scoop up investors in the Central Texas region, but the reactor project remains fiscally shaky at best. NRG is working off of cost estimates that are artificially low and offering power at costs at which they are unlikely to be able to deliver.”
On May 19, 2009, the Department of Energy confirmed that the South Texas Project expansion was one of four projects selected for further due diligence and negotiation leading to a conditional commitment under the DOE loan guarantee program.
Mariotte said the U.S. environmental community has long opposed the use of U.S. Department of Energy loan guarantees, which are actually loans from the government’s Federal Financing Bank, for new nuclear reactor construction.
The group letter states, “Just as we have warned American taxpayers and elected officials about these very serious financial risks, we also urge you to very carefully consider these risks before deciding to invest in new reactors in the United States.”
“We respectfully suggest that Japanese taxpayers would not want to lose money on a U.S. reactor project. Nor would U.S. taxpayers want to bail out JBIC when the predictable losses occur. Such outcomes would obviously be uncomfortable on both sides of the Pacific,” the letter concludes.
NIRS and the signatory groups object to nuclear energy because of the risk of radioactive contamination in case of accidents and spills, as well as lack of permanent storage for spent nuclear fuel. They say, “We do not support construction of new nuclear reactors as a means of addressing the climate crisis. Available renewable energy and energy efficiency technologies are faster, cheaper, safer and cleaner strategies for reducing greenhouse emissions than nuclear power.”