For ages, people have been saying: “Solar is a great, clean, renewable energy source, but it is just too expensive. Other energy sources, like nuclear, may have some (or serious) environmental risks, but they are cheaper.”
Now, a new report out of Duke University says that solar energy and nuclear energy have passed a “historic crossover,” where decreasing solar energy costs and increasing nuclear energy costs have met, and then parted. Solar energy is now cheaper than nuclear energy and is getting increasingly cheaper every day.
Solar Energy–Nuclear Energy Crossover
John O. Blackburn, a professor of economics at Duke University in North Carolina, and Sam Cunningham, a graduate student at Duke, wrote the paper, “Solar and Nuclear Costs — The Historic Crossover.” They wrote: “Solar photovoltaics have joined the ranks of lower-cost alternatives to new nuclear plants.”
The crossover occurred at 16 cents per kilowatt hour.
Of nuclear energy construction costs, Mark Cooper, senior fellow for economic analysis at Vermont Law School’s Institute for Energy and Environment, says that the estimates have been going up significantly for years (i.e. from $3 billion/reactor in 2002 to about $10 billion/reactor now) and they are expected to continue rising.
In a report Cooper published last November, he found that the costs for U.S. taxpayers and utility users could end up being hundreds of billions or even trillions of dollars more than needed to achieve our low-carbon goals if the federal government goes for a nuclear energy intensive approach. The name of the report: “All Risk, No Reward for Taxpayers and Ratepayers.”
Nuclear Industry Push for More Help Could Result in Financial Disaster, & Already Has
The ambitious nuclear energy approach is continuously and heavily being pushed by the nuclear industry, of course. On their wish list are subsidies, tax credits, loan guarantees, procedural simplifications and more. Unfortunately (and the route of this word really stands out to me writing this), the federal government has been giving in.
The nuclear industry is also pushing for help on the state level.
At the state level, the industry has also pressed the case for “construction work in progress,” a financing system that requires electricity users to pay for the cost of new reactors during their construction and sometimes before construction starts. With long construction periods and frequent delays, this can mean that electricity users start to pay higher prices as much as 12 years before the plants produce electricity.
Think the environmental risks and disasters of building nuclear power plants are the only problem? Think again.
As far back as 1985, Forbes magazine called construction of the first generation of U.S. nuclear plants “the largest managerial disaster in business history.”
More from the NYTimes:
The first round of plants resulted in write-offs through bankruptcies and “stranded costs” — investments in existing power plants made uncompetitive by deregulation — which essentially transferred nearly $100 billion in liabilities to electricity users, said Doug Koplow, an economist and founder of Earth Track, based in Cambridge, Massachusetts, which campaigns against subsidies it considers environmentally harmful.
And, even more astounding than that, take a look at this info:
From 1943 to 1999 the U.S. government paid nearly $151 billion, in 1999 dollars, in subsidies for wind, solar and nuclear power, Marshall Goldberg of the Renewable Energy Policy Project, a research organization in Washington, wrote in a July 2000 report. Of this total, 96.3 percent went to nuclear power, the report said.
And these costs and risks are nothing compared to what is expected if a new wave of nuclear reactors gets the government backing the industry is looking for.
Why does the industry continue to push forward? Because they aren’t at risk with the government’s support.
“With such financing the utility is making a one-way bet, allowing it to make a profit even when the project fails,” Cooper said. “The people bear the risks and costs; the nuclear utilities take the profits. Without loan guarantees and guaranteed construction work in progress, these reactors will simply not be built, because the capital markets will not finance them.”
For more on the topic, read the NYTimes lengthy 3-page piece. I think I will write more on nuclear energy in the coming days as well.
Photo Credit: Stuck in Customs via flickr