NUCLEAR power should be hot. It emits virtually no carbon dioxide. It requires no costly imports of oil from countries that breed terrorists. Even greens don't hate it as much as they used to. What's for a politician not to like?

Five years ago, George Bush became the first American president to visit a nuclear-power plant in 30 years. In 2007 Congress voted to fund a federal loan guarantee for the construction of new ones. In January Barack Obama embraced his predecessor's vision, pledging to build a “new generation of safe, clean nuclear-power plants”. On February 1st he followed that up in his proposed budget for 2011 by tripling to $54 billion the value of loans for new nuclear plants the government is offering to guarantee.

Yet America's much-predicted nuclear renaissance has yet to occur. On October 8th Constellation Energy, a power company, gave up trying to persuade the government to reduce its proposed fee for a loan guarantee for a planned nuclear plant on Chesapeake Bay. The government's price “would clearly destroy…the economics of any nuclear project,” grumbled the firm. Experts now predict that the project, a joint venture with EDF, a French state-controlled electricity giant, will die.

The Nuclear Energy Institute (NEI), a trade association, blames the breakdown of negotiations with Constellation on “a ridiculous formulaic approach” by the White House Office of Management and Budget, which considered the Chesapeake Bay plant a very risky project. Despite this, the NEI sees “no evidence of a lack of commitment by the administration”. Others are not so sure. Some suspect that Mr Obama's earlier nuke-boosting was a ploy to win Republican support (which never materialised) for a climate bill.

Constellation's decision is the latest in a series of blows to the industry. After Congress agreed in 2007 to fund loan guarantees, some 28 applications were filed to build new nuclear plants. America is the world's largest producer of nuclear energy, but has not approved a single new plant since a scary (but non-lethal) nuclear accident at Three Mile Island in 1979. (The 50 or so plants that have opened since then already had regulatory approval; plans for dozens more were cancelled.)

The economic slowdown has reduced electricity consumption, which remains below the peak it reached in 2007. At the same time, there has been a sharp increase in the supply of non-nuclear electricity (gas, coal and wind) from plants built to meet a wrongly predicted spike in demand. Gas prices, which a few years ago were high enough to make power firms consider the nuclear option, are now much lower. Pessimism about the economy makes corporate America reluctant to undertake long-term capital investments. None of this bodes well for nuclear power.

To make matters worse, America has failed to adopt a coherent energy policy, let alone one that imposes a price on carbon. Everyone in the energy business believes that carbon-pricing will come, but when? It costs perhaps $9 billion to build a nuclear plant, and can take a decade (allowing maybe four years to get approval). With so much regulatory uncertainty, that is too big a bet for private investors—especially since projects of this kind often cost more than expected. Several plans to build nuclear plants have been shelved. Earlier this year Exelon, another power firm, suspended plans for a twin reactor in Texas (though it continues to seek regulatory approval, in case the economics improve).

Homer Simpson's job is at risk

Currently, just two nuclear plants are under construction in America, neither yet with full regulatory approval. One is being built near Waynesboro, Georgia, by Southern Company. It may have to wait a year or more for final regulatory approval, though at least it did agree on terms for a government loan guarantee in June. The other plant is being built in South Carolina, by Scana, which is competing for a loan guarantee with NRG Energy, which has plans to build in Texas.

It remains to be seen how EDF will respond to Constellation's withdrawal. The firm says it is “extremely disappointed” that its former partner has “unilaterally” decided to give up. It claims to have been “at the finish line with the Department of Energy” and “making significant progress”. There is speculation that EDF will go ahead even without the guarantee, simply to remain in the American market and thus keep its global ambitions alive.

Unless the formula for calculating the fees for a loan guarantee is changed, it seems unlikely that any new plants will qualify, at a fee they can afford, in states that have deregulated their energy markets. Southern Company's plant in Georgia got an affordable loan guarantee because Georgia's regulated system makes it feasible to sign long-term supply contracts. This means that Southern Company has a good idea, in advance, of how much money it will earn from generating electricity. This is much harder in deregulated states.

Not everyone is downcast. “I have been saying for years that the conditions were not in place for a nuclear renaissance—and the financial crisis has moved the point at which they are five years to the right,” says Danny Roderick, the global head of nuclear-plant projects for GE Hitachi Nuclear Energy. But this is actually an opportunity for the industry to get its plant designs right, so that when conditions improve, work can begin at a gallop. Despite huge recent improvements in plant efficiency and safety, “even if the renaissance had happened, and we had 100 orders today, there is not a single design that could get a licence issued. But nuclear is not a sprint; it's a marathon,” says Mr Roderick.

Until the summer, the consensus was that four to eight new nuclear plants would come on stream in America between 2016 and 2018. Now, no one will be shocked if it is only two by 2020. After that, who knows? Meanwhile, other parts of the world are rushing to go nuclear. Some 55 plants are under construction. More than 20 are in China, which is forecast to surpass America and have the most nuclear reactors around 2030.