WASHINGTON- President Barack Obama announced $8.3 billion in loan guarantees on Tuesday to build the first U.S. nuclear power plant in nearly three decades in a move designed to help advance climate legislation in Congress.

Obama, a Democrat who is trying to win Republican support for a bill to overhaul U.S. energy practices, said the United States needed to increase its supply of nuclear power to meet its energy needs and fight climate change.

The government backing, in the form of a loan guarantee, will go to help Southern Co. build two reactors at a plant in Georgia state.

Even though we've not broken ground on a ... new nuclear power plant in 30 years, nuclear energy remains our largest source of fuel that produces no carbon emissions, Obama said after touring a union education center in Lanham, Maryland.

To meet our growing energy needs and prevent the worst consequences of climate change, we'll need to increase our supply of nuclear power. It's that simple, he said.

Obama is pushing for a law that would cap greenhouse gas emissions from industry and expand the use of renewable fuel sources such as wind and solar.

The administration hopes that by reaching out to Republicans on the nuclear issue -- a top priority for key opposition lawmakers such as former presidential candidate John McCain -- support for the stalled bill will grow.

That hope may not come to fruition.

Republicans are eager to expand nuclear power and offshore drilling but are resistant to Obama's proposal for a greenhouse gas emissions trading system similar to the European Union's.

Obama said the climate bill, which contains a cap-and-trade system, would help create incentives for cleaner fuels such as nuclear. He said his administration would work to develop what he saw as common ground on the bill with Republicans.

We're not going to achieve a big boost in nuclear capacity unless we also create a system of incentives to make clean energy profitable, Obama said.

As long as producing carbon pollution carries no cost, traditional plants that use fossil fuels will be more cost-effective than plants that use nuclear fuel.

EPA FIGHT, BOOST FOR SOUTHERN

Obama's Democrats and opposition Republicans are at odds over several aspects of how to fight climate change.

U.S. Senator Lisa Murkowski of Alaska is spearheading legislation that would prevent the Environmental Protection Agency having the power to regulate greenhouse gases -- an option Obama is preserving if Congress does not act.

As well some entities, such as Texas, the U.S. Chamber of Commerce and the American Iron and Steel Institute, are initiating legal challenges to stop the EPA from acting unilaterally on greenhouse emissions.

Carol Browner, the president's top energy and climate advisor, said the White House would oppose any move to limit the EPA's regulatory authority.

We will work against that. We do not want to see that passed, she told Reuters Insider in an interview.

Expanding nuclear energy is one area Obama and Republicans have embraced as a way to generate power and create jobs.

Atlanta-based Southern, a leading U.S. producer of electricity, welcomed the nuclear announcement. Its shares rose 1.6 percent. The administration said the project would generate 3,500 construction jobs and 800 permanent positions once the reactors go into operation.

It's an important endorsement in the role nuclear power must play in diversifying our nation's energy mix and helping to curb greenhouse gas emissions, Southern Chief Executive David Ratcliffe said in a statement.

Supporters of nuclear power argue more reactors will be needed for the United States to tackle global warming effectively because nuclear is a much cleaner energy source than coal-fired power plants, which spew greenhouse gases.

Nuclear power is controversial, however, because of its radioactive waste, which is now stored on site at reactor locations around the country. Remembering the 1979 accident at the Three Mile Island nuclear power plant in Pennsylvania, many Americans still harbor concerns about nuclear power's safety.

Obama said a commission with Republican and Democratic leaders and nuclear experts was examining the waste issue.

The two reactors, which some experts estimate will cost $8.8 billion to build, could be in service in 2016 and 2017.

Southern has one of the largest fleets of coal-fired power plants in the nation and would suffer if Washington were to institute restrictions on carbon dioxide emissions.

U.S. Energy Secretary Steven Chu said the department plans to offer loan guarantees to at least half a dozen projects but declined to lay out a timeframe for further announcements.

(Additional reporting by Tom Doggett in Washington and Matt Daily in New York; Editing by Cynthia Osterman)

Barack obama Energy