I'm pretty confused about this. If the LPO loan isnt needed to catalyze other financing, and it is being made at commercial rates and on commercial terms, why was LPO involved at all. LPO should surely be precisely for loans to projects that mneed some help that the commercial markets wont provide.
Basically, this seems as bad as the previous LPO ioteration which provided funding for any green project that met financial criteria. LPO should be used as a strategic resource to fund strategically important stuff that would not otherwise happen, and in particualr thew scaelup on new technologies aand new models. TMI is none of that.
Claims about the specific deal here notwithstanding, LPO’s value-add is not just in its single-project additionality but in its ability to bring down the perceived market risk and signal value for the industry more broadly.
I'm not sure about that. LPO has been a subsidy program to reduce risk. That's fine, but previous LPO loans signaled that there WAS too much risk for commercial lending.
You seem to argue that the signal of government support via LPO somehow makes other projects more bankable without changing their economics? I'd be interested in evidence for that, in the context of huge investments, very long time lines ( esp for green field projects) and decades for full investor payback. The "Trump likes this" message sent via LPO seems a pretty weak reed in that environment.
Or are you saying that perhaps hundreds of billions in subsidized LPO loans will help scale nuclear more generally? It would certainly reduce LCOE for nuclear (quite substantially), but probably not nearly enough for large reactors to bridge the cost gap to natural gas despite the extremely ambitious claims of the last Biden Nuclear Liftoff Report.
I'm pretty confused about this. If the LPO loan isnt needed to catalyze other financing, and it is being made at commercial rates and on commercial terms, why was LPO involved at all. LPO should surely be precisely for loans to projects that mneed some help that the commercial markets wont provide.
Basically, this seems as bad as the previous LPO ioteration which provided funding for any green project that met financial criteria. LPO should be used as a strategic resource to fund strategically important stuff that would not otherwise happen, and in particualr thew scaelup on new technologies aand new models. TMI is none of that.
Claims about the specific deal here notwithstanding, LPO’s value-add is not just in its single-project additionality but in its ability to bring down the perceived market risk and signal value for the industry more broadly.
I'm not sure about that. LPO has been a subsidy program to reduce risk. That's fine, but previous LPO loans signaled that there WAS too much risk for commercial lending.
You seem to argue that the signal of government support via LPO somehow makes other projects more bankable without changing their economics? I'd be interested in evidence for that, in the context of huge investments, very long time lines ( esp for green field projects) and decades for full investor payback. The "Trump likes this" message sent via LPO seems a pretty weak reed in that environment.
Or are you saying that perhaps hundreds of billions in subsidized LPO loans will help scale nuclear more generally? It would certainly reduce LCOE for nuclear (quite substantially), but probably not nearly enough for large reactors to bridge the cost gap to natural gas despite the extremely ambitious claims of the last Biden Nuclear Liftoff Report.