DBL Partners examines rationale for subsidizing mature, declining energy sources
SAN FRANCISCO (August 26, 2013) DBL Partners, a double bottom line venture capital firm, today announced a report revealing that the California nuclear industry has received $8.21 billion in federal subsidies over the last 50 years. The report, Ask Saint Onofrio: Finding What Has Been Lost in A Tale of Two Energy Sources, compares federal subsidies for nuclear energy to those provided for distributed solar energy.
“In keeping with our nation’s tradition of supporting the emergence of new energy sources, federal subsidies were necessary and highly-effective for the early growth of the nuclear industry and have been vital to the recent growth of the nascent distributed solar industry,” said report co-author and Managing Partner of DBL Partners Nancy E. Pfund,
Nuclear energy has received four times more federal support than distributed solar over a period six times as long. While solar is beginning to comprise a significant portion of installed capacity in California, it has received less support than nuclear did in its earliest years. At the same time, the closure of the San Onofre Nuclear Generating Station (SONGS) has reduced California’s in-state nuclear generation by almost 50 percent.
Pfund adds, “The difference is that despite the declining role of nuclear power in the Golden State, federal subsidies for nuclear have become a perpetuity. Meanwhile, solar subsidies are at risk of ending during the industry’s infancy, even as solar creates thousands of California jobs.”
Ask Saint Onofrio discusses the significance of the Price-Anderson Nuclear Industries Indemnity Act, which limits the costs for nuclear plants by shifting a portion of the liability for an accident from plant operators to taxpayers. Also discussed are decommissioning costs, which fall largely on ratepayers. In the case of San Onofre, closing estimates are in the range of $4.1 billion.
Saint Onofrio, or San Onofre in Spanish, is a Saint to whom people pray for help in finding lost things. The report concludes that Californians should ask Saint Onofrio what the rationale is for subsidizing mature and declining energy sources, such as his namesake’s power plant, while continuing to limit incentives for new, clean energy.
This report builds on What Would Jefferson Do?: The Historical Role of Federal Subsidies in Shaping America’s Energy Future, a DBL Partners report from 2011 that showed the crucial role federal subsidies have played in supporting emerging energy technologies and driving economic growth for the past 200 years. Contrary to popular belief, federal subsidy levels for alternative energy sources have been much lower than subsidies for “traditional” energy sources, such as coal, gas and nuclear.
To download a full copy of Ask Saint Onofrio: Finding What Has Been Lost in A Tale of Two Energy Sources visit http://www.dblpartners.vc/resource/ask-saint-onofrio/.
About DBL Partners
DBL Partners is a pioneer of double bottom line venture capital, a new and growing field of investing that seeks to optimize both financial return (First Bottom Line) and positive social impact, including environmental and regional benefits (Second Bottom Line). Based in San Francisco, the firm focuses on cleantech, IT, health care and sustainability companies. The firm’s portfolio companies, which include BrightSource Energy, Ecologic Brands, EcoScraps, FloDesign Wind Turbine, Revolution Foods, Pandora Media (NYSE: P), SolarCity (NASDAQ: SCTY), Tesla Motors (NASDAQ: TSLA) and others have created more than 5,000 jobs. More information about DBL Partners is available at www.dblpartners.vc.