Recent, highly relevant data shows very clearly that US loan guarantees to help a nuclear plant get built in Georgia are based upon cost estimates that just don’t stand up to scrutiny. It’s a pity that it will take many years and a lot of money to learn the truth.

President Obama formally announced a $8.3 billion “loan guarantee” for the first new nuclear power plant in thirty years in the US, which reports will be a

two-unit, 2,200-megawatt nuclear power plant in Burke County, Georgia … , expected to cost $14 billion to build.

As a civil engineer, I can tell you that a picture of true costs of a large project only starts to develop once contractors enter into the process by submitting bids. These bids include cost estimates developed with a good deal of engineering expertise. Contractors usually try to be accurate in developing these costs estimates, because they don’t want to lose money should they win the bidding game and go to construction.

The Ontario Star reports on a very similar nuclear plant to the one proposed in Georgia, for which construction bidding came in at $26 billion Canadian (about $25 billion US):

AECL’s $26 billion bid was based on the construction of two 1,200-megawatt Advanced Candu Reactors, working out to $10,800 per kilowatt of power capacity. …

The nuclear industry has a history of lowballing cost projections and cost overruns. It’s a common phenomenon because accurate cost estimates tend to stop projects when the true, high costs are understood. The people in Ontario looked at this bidding price and opted out.

It was smart of the people in Ontario, CA to get some bid prices early in the process. Let’s hope we can see some accurate bid prices soon for the Georgia facility. Maybe it’s not too late to use the money for things we can afford in the long term.