By Peter Gardett, AOL Energy

As Japan continues to reel amid an ongoing crisis following the earthquake of March 11, the U.S. electricity sector is bracing itself to deal with a backlash against the recently-resurgent nuclear power industry.

An explosion at the Fukushima nuclear power plant caused by the earthquake has sparked an ongoing effort to control the reactor and potentially dangerous fallout from the unit prompting renewed concerns about nuclear power in the U.S.

Increased concerns about both existing and new nuclear power units should boost the prospects of natural gas markets in the short term, ratings agencies said, particularly liquefied natural gas (LNG) that can be imported to Japan to provide power in the absence of nuclear units.

"Gas is the natural substitute fuel" for Asian utilities dealing with nuclear power interruptions, Fitch Ratings director of energy and utilities Arnon Musiker said in issuing a research report on the sector.

Over the longer term the reactions to the Japanese nuclear industry's crisis could burnish the appeal of renewable fuels for use in generation. Solar, wind, biomass and energy efficiency expansion efforts have intensified in recent years but remain limited contributors to the overall US electricity market, in part because renewable supply can be unreliable and units are expensive to build and integrate into the system on a large scale.

"The issue of nuclear energy security is going to create renewed interest in the renewable energy deployment in the U.S. despite anxiety over the higher costs of renewables," Global Change Associates chairman Peter Fusaro told AOL. Fusaro's firm hosts the upcoming Wall Street Green Summit, and he says that large scale renewable project finance has continued to appeal to "big money" in the finance sector.

Analysts at investment firm Raymond James highlighted the prospects for renewable generation in a report issued after the earthquake. "Will Japan's earthquake be the death knell for the 'nuclear renaissance"?" the report asked, saying the likely beneficiaries were other low-carbon fuels.

Reliability and a limited carbon-dioxide emissions profile had burnished the appeal of new nuclear power units in the U.S. and elsewhere over the past decade, especially as older units began to near retirement dates. There are currently 443 nuclear units globally, but 143 are scheduled to close by 2030, the World Nuclear Association says.

With 62 reactors under construction globally, regulators in the U.S. and elsewhere were expecting nuclear power to help meet growing demand for power. There are 23 planned new nuclear units in the U.S., the Nuclear Energy Institute said, although most are still not fully approved and have not begun construction.

Currently operating nuclear plants could be in greater trouble than new projects able to adjust to new safety requirements, Fitch Ratings public finance group Senior Director Chris Jumper told AOL. Impacts will be plant-specific and the additional equipment costs could be added into the rate base that determines consumer power prices, Jumper said.

Political leaders in the U.S. have largely maintained their broadly positive stance on nuclear power in the days since the accident at Fukushima.

President Obama included nuclear capacity in speaking about the need for U.S. energy "diversification" in a press conference called after the Japanese earthquake, and Energy Secretary Steven Chu has defended the administration's current approach to including nuclear power in new electricity generation. Current Obama administration budget requests include loan guarantees that would promote the development of new nuclear plants currently treated with trepidation by investors concerned about headline and political risk.

The proposed loan guarantees for new nuclear plants have detractors even within the energy industry, who say that the arbitrarily low liability caps on nuclear power plant owners and operators are failures of regulatory oversight. "The recent earthquakes in Japan and subsequent loss of 10% of Japan's electric power...demonstrates the frailness of relying on any 'one' energy source, particularly one that has extremely high dangers of contamination of air and water," Scott Sklar of clean energy advisors The Stella Group told AOL.

Most energy industry representatives contacted by AOL said they were unable to take a position on the nuclear industry's future while the emergency response to the disaster remains ongoing, but several electricity industry representatives said they expect the policy environment to "evolve" over the next few months as the impacts of the Fukushima accident become clear.

"[Building] nuclear in the near term is going to be a lot harder than it was a week ago," Biomass Power Association president Bob Cleaves told AOL. Cleaves said his organization supports an "all of the above" energy policy that includes reliable baseload energy like biomass as well as intermittent electricity generation resources like wind power.

Launching in Spring 2011, AOL Energy will provide news, data and tools to the electricity sector as it innovates, reinvests and repowers in swiftly-evolving regulatory, financial and market environments. Follow Peter on Twitter at @petergardett.

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257 Comments

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ickymcpooh

Is anyone surprised?A flea could fart in africa and the price of something will go up here.

March 18 2011 at 12:55 AM Report abuse +2 rate up rate down Reply
fpfp040408

when the RNC pays its bills and are no longer DEADBEATS , then we should take the Republican party and republicans seriously, unless of course they once again spend exorbitant amounts of money given by donors on adult entertainment

See full article from DailyFinance: http://srph.it/gf8vOQ

March 17 2011 at 2:03 PM Report abuse -1 rate up rate down Reply
fpfp040408

Where are the Jobs the Republicans promised? Where is the balanced budget the Replicans promised? Where is the insurance and health care reform the Republicans promised? Where is the Wall Street reform the Republicans promised? Where is the end to the recession the Republicans promised? Where is the border security the Republicans promised? Where is anything the Republicans promised?

See full article from DailyFinance: http://srph.it/eYhvEf

March 17 2011 at 1:09 PM Report abuse +1 rate up rate down Reply
fpfp040408

The RNC is Mulling over the Sale of TV Rights to Broadcast Primary Debates to pay off their 22 million debt ! HOW PATHETIC ! The RNC can not manage their own finances & create a huge debt that is accruing tremendous interest fees creating a greater debt/ financial mess --- YET : they clam they can handle the nations finances. Plus, by not paying their bills they are creating great financial hardship on many companies which now have to lay off people ! Thus RNC and Repubs are ADDING to the unemployment problem ! The RNC and Repubs promised to fix the unemployment crisis BUT they are only making it WORSE ! What a JOKE ! God Bless OBAMA

March 17 2011 at 1:07 PM Report abuse rate up rate down Reply
fpfp040408

GOD BLESS OBAMA !! Unemployment down & market UP ! PRESIDENT OBAMA has been very effective in bringing legislation like health care and financil reform to fruition in the midst of two wars and a bad recession, which by the way, he had nothing to do with, and now when the Middle East is in termoil he has been very steady in handling the situation. He is the most intelligent president in modern history, and when he gets a second term and the Congress back, you will see new life given to a dying middle class

March 17 2011 at 1:06 PM Report abuse rate up rate down Reply
fpfp040408

when the RNC pays its bills and are no longer DEADBEATS , then we should take the Republican party and republicans seriously, unless of course they once again spend exorbitant amounts of money given by donors on adult entertainment

March 17 2011 at 11:37 AM Report abuse -1 rate up rate down Reply
1 reply to fpfp040408's comment
usapaydirt

The present system of greed , serves no purpose other than to unravel the very fabric of society, by making basic necessities unattainable , by the process of paper bidding wars rather than supply and demand , they are driving a huge portion of society to the breaking point,that's when change you can count on will then begin---!!! and karma is a mother!!!

March 17 2011 at 8:36 AM Report abuse +1 rate up rate down Reply
Mrmiami525

Wow, so now were going o spin Japan's Nuclear power problems with one of their 16 Nuclear Plant's to raise power cost to US resident's? Come on....how much of this garbage must we eat until we call BS and start forbidding all these unjustified price increases especially when their are other countries that will/can contribute to their power loss to 15% of their country. I have to remind you that Japan is less than the size of California and the main problem for them in regards to their power loss in this area is downed wires and busted natural gas lines. So the real question is, even if we sent them liquified Natural gas how are they going to redistribute that gas through busted gas lines? I can't believe how we Americans are sitting by being fed bogus reasons for rising cost's on necessities and going along with it. Our gas/electric costs just went up 28% on a budget plan less than 9 month's ago and now this? No way our government can continue to do this to their citizens and go on governing, it has to stop somewhere. On top of all these price increases,some real, MOST NOT, at the end of the year they turn around and tell you there's been no increase to your cost of living therefore, no increases to your SS, Disability checks or tax breaks, layoffs and ask for you to take paycuts!!! Come on America and STAND UP against our Federal/State Government and just say NO WAY!!!

March 17 2011 at 6:34 AM Report abuse rate up rate down Reply
jdrumerrnr

Didn't food prices already adjust for higher gas back in 2008. The prices never came down. What a way to gut the middle class.

March 17 2011 at 6:31 AM Report abuse +3 rate up rate down Reply
1 reply to jdrumerrnr's comment
Mrmiami525

Happen's that way everytime they increase prices due to some real or fabricated outside influence or crises. Once they discover just how much American's are willing to pay for what are all necessities to life such as Gas, Electric, Food, Prescriptions,Transportation, etc....Once the Crises has ceased prices either will stay the same or they will roll them back a tiny bit and pass it off as a deal or Sale, but never near what they use to be. Then at the end of the year they turn around and tell you there has been no increase to your cost of living because somehow the items they use to determine the COLA are not factors in determining this percentage and the things that are have magically been decreased just enough to cme in under the qualifying percentage by OCT but then when Jan rolls back up they go!! This reason though is just total BS because they do not have the infrastucture at this time to redistribute this natural gas in the effected areas because there broken. Once these wires and Gas lines are repaired they have the resources in place to resupply the Gas and Electric needed, this in no way should have any bearing on a price increase for our gas/electric for what amounts to an area no bigger the size of Delaware. It's just ridiculous the reasons and circumstances the US and State Governments are giving to justify their price increases and America has to stand up and say No and at least ask why, we should be entitled to see why and where this money is spent-it's end delivery completed-how it has help and when it's no longer needed (which is when our prices should revert back to what they once were) for some reason though they never reach that mark ever again, why is that?

March 17 2011 at 7:10 AM Report abuse +1 rate up rate down Reply
jdrumerrnr

Anything to gouge the Middle Class Americans hu?

March 17 2011 at 6:29 AM Report abuse +1 rate up rate down Reply