Taxes and subsidies developing the area of influence

Enquiries conducted among people living near operating power plants show a positive acceptance of nuclear energy. There are at least three reasons for that acceptance: the socio-economic benefits from the nuclear power plant; growing confidence in the operators through a policy of trans­parent dialogue and information; and the remote perception of a nuclear risk. In this section, the socio-economic benefits of a nuclear power plant are examined.

Most nuclear power plant owners have conducted studies on the socio­economic impacts that they produce in their areas of influence. The US Nuclear Energy Institute (NEI) has so far conducted 13 such studies which include 22 nuclear units, from which some general statements have been published. Other institutions, mainly university departments, have con­ducted analyses for other plants (Exelon, 2008). Moreover, local economic impact assessments have also been conducted for decommissioning (PG&E, 2010) and for the Yucca Mountain nuclear waste repository (University of Nevada, 2003).

The methodology used is based on so-called input-output analysis, avail­able on the market. The application of such models is explained in Section 6 of the NEI analysis of the economic benefits that the institution has so far conducted (NEI, 2008). A number of commercial models are available, with Impact Analysis for Planning (IMPLAN) being the one used in the NEI evaluations.

IMPLAN analyses the interrelations between input-demand and output- supply for any activity, such as the construction, operation and dismantling of a nuclear power plant, within a defined geographical region. The aim of the analysis is to determine the expenditures that the plant will bring to the region, the income generated for local businesses and households, the number of jobs that the plant may provide for the different stages in its life, and the tax revenues generated.

The impacts of the plant on the regional area of interest will include not only direct impacts, i. e. the initial impacts from bringing the plant to the region, but also secondary effects produced by those first impacts, i. e. the demand for goods and services will itself generate new employment and additional spending to deliver the goods and services requested by the plant and by other potential customers. The addition of the two effects is called the total effect, and the ratio between total and direct effects is called the multiplier effect, which can be obtained for each individual effect, such as an increase in jobs, earned income, industry output or revenue from taxa­tion. Multipliers can be obtained for local, county, provincial and state areas.

From the experience obtained through these studies, NEI has published a Fact Sheet which summarizes the contributions of nuclear power plants to state and local economies in the US (NEI, 2010). The values given are normalized averages (normalized to 1 GWe of installed capacity) from the 22 units analysed:

1. Employment. Building a new nuclear power plant will result in the crea­tion of 1400 to 1800 jobs, with peak employment as high as 2400 jobs. During operation each unit generates from 400 to 700 permanent jobs, receiving salaries 36% higher than existing average local salaries. Such an increase in population may generate an equivalent number of local jobs for the goods and services needed.

2. Local economic benefits. The operating plant will require direct goods and services for some $430 million in the local communities and $40 million for labour income, to which indirect effects, amounting to some 7%, have to be added.

3. Federal, state and local taxes. On average, federal tax payments will amount to $75 million, while provincial and local tax revenue will amount to $20 million per year. These taxes are used to create state and local infrastructure.

4. New plant construction. The construction of a new nuclear power plant boosts the supply of commodities such as concrete and steel, and hun­dreds of components and services, such as transportation. It has been estimated that a new nuclear power plant may need some 1 million m3 of concrete and 66,000 tons of steel, 70 km of piping, 480 km of wiring, and 130,000 electrical components. Although the major nuclear compo­nents come from other places, many items could be provided within the area of influence.

Spain has also developed studies on the local socio-economic impacts of nuclear power plants. A study conducted by the Burgos University

Department of Economics at the Nuclenor-owned Garona plant (a 460 MWe GE-BWR) concluded that between 1992 and 2006 the plant spent €80 million on local goods and services, and provided local tax revenues amounting to €6 million. The plant also invested about €16 million per year in plant retrofitting, technological innovation, and research and develop­ment (NUCLENOR, 2007). The study makes an analysis of the social and economic evolution of the population within a 35 km radius of the plant, from before construction to 2007, i. e. after 37 years of operation, by measur­ing unemployment, commercial activities, industrial development, financial entities and the increase of cars and telephones. To separate the impact from the plant, the results have been compared with the corresponding average numbers for the rest of the provincial territory. Factors of 2 have been found for some of the indexes.

Another study was conducted for the Asco and Vandellos plants operated by ANAV (which include three W-PWR, of one GWe each). The study was undertaken by the Rovira i Virgili University (URV) in the city of Tarragona using the output-input methodology described above (ANAV, 2011). It found that output to the Catalonian economy from the activities of ANAV and its workers is four times the initial input during the five-year period from 2004 to 2008. This factor is 3.3 when the territory is limited to the province of Tarragona, where the plants are located. Similar results are obtained for the employment created.