Should We Subsidize Nuclear, When it Can Never Scale?

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The rationale for subsidizing newer, cleaner, safer forms of energy production is that by paying incentives to increase the pool of early adopters, a mass market is developed faster, which drives down production costs sooner, making a more desirable form of energy cost-effective faster, helped by all of us, in the form of government incentives. The (initially artificial) demand acts the same way as normal demand in speeding more product to market. We consumers drive down the costs. Because of the urgent need to reduce greenhouse gases, we have to create that market faster.

Building any new technology infrastructure is expensive, but if government steps in and helps the invisible hand of the market, it become less expensive, because with an increased demand, mass production lowers costs to manufacture.

One example: Solar panels and inverters cost much less now, due to government intervention, mostly in Spain and Germany, with Feed-in Tariffs that literally paid homeowners to produce electricity on their own roofs. New Jersey has just tried the same approach, and now rivals California in solar installation and pricing. It works. Solar is now available for less money a month than the utility energy in about nine states. We all benefit, consumers, and utility-scale solar developers alike, from cheaper solar due to the forward thinking of legislators in Spain, Germany and New Jersey.

But nuclear power is different. It can not be implemented by individual homeowners. We are not going to be popping a nuclear reactor in our backyards any time soon.

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24 thoughts on “Should We Subsidize Nuclear, When it Can Never Scale?

  • You know this whole looming energy crisis is actually kind of funny when you think about the root cause and the fact that people keep chasing their tales in search of some bigger/better energy producer.

    The root cause of course is our level of energy consumption compared to our ability to produce it sustainably. So the logical solution is to focus more on using exponentially less energy than trying to create more.

    You could apply the same logic to our food chain, water… heck the entire eco-system. An extreme downsizing is inevitable anyway so why don’t we get started now and subsidize people who choose to downsize their entire energy footprint now.

    This strategy might even buy us the time we need to come up with new ways to make more.

  • The reasons are simple – the proper solution of taxing the polluters a “waste disposal fee” (aka carbon tax) will not happen any time soon due to politics of it. The second best option is to subsidize the clean alternatives. However the notion that nuclear power is subsidized is a popular misconception.

    Nuclear is far cheaper than any other clean option, and is subsidized far less in comparison. There are no subsidies for running reactors, to the contrary each reactor operator pays over $4 000 000 per year to the government in regulatory costs, then there is nuclear fuel disposal tax added to each kWh produced, and plethora of federal, state and local taxes being payed by the plant operators and the employees.

    The loan guarantees are not really a subsidy either – they are not money payed by the govt to who ever runs the reactor, such as the subsidies for wind/solar. A company has to pay a hefty sum to get the loan guarantee. Loan guarantees are basically a costly guarantee from the govt. to the investors that if govt. somehow prevents the plant from operating (such as antinuke zealots get elected), the govt. will pay the investors back.

    As several investors lost billions in nuclear related investments due to government decisions which did not allow a built & licensed plant to operate, this is the only way to get investor to build nuclear plants.

    • ^^^^^
      “…antinuke zealots get elected..”
      Warning! Lobbiest commenter! Astroturfing in progress!
      “Nuclear is far cheaper than any other clean option, and is subsidized far less in comparison.”

      “Although the industry frequently points to its low operating costs as evidence of its market competitiveness, this economic structure is an artifact of large subsidies to capital, historical write-offs of capital, and ongoing subsidies to operating costs.”

  • Two words: modular reactors. The DOE is getting big on this concept:

    If it can be made economical, these modular reactors could be mass-produced in a way that current nuclear power plants aren’t.

  • I am all for more solar, it is obviously cleaner, no byproducts, much less to create a solar plant, but the the size of the plant or land mass necessary to compete with a nuclear plant would be enormous. The other major problem is it not much good at night when you really need it.

    • When figuring the land required for nuclear power be sure to include the exclusion zones from nuclear contamination, the uranium mines and the surrounding areas of uninhabitable land and the contaminated water supplies due to mining. Also figure in the amount of farmland displaced because of the fresh water supplies diverted to nuclear plant cooling which is not available to farmers. The amount of solar power that can be installed on rooftops and previously damaged land will greatly reduce the amount of virgin areas needed. Solar power is perfect to offset the peak loads needed during daytime hours, which any utility will tell you are the peak hours, not night time when offices, manufacturing and businesses are closed. Wind often increases at night and wind power can take care of that time period. No one is suggesting that we rely on only one form of electric production, but rather use whichever forms of renewable energy that our local resources provide. Systems that run without fuel will always come out ahead over time compared to fuel dependent systems. There are no huge liability insurance costs from renewable energy other than large dams, but liability for nuclear power is so great that no private company could ever bear the risks. so the taxpayers are left to pay for nuclear accidents and suffer the widespread contamination even when they get no power from those facilities.

  • tt23 makes some good points. Ideally we would remove all subsidies from all energy producers, fund basic research, impose a carbon tax, and let the market handle things from there. But realistically that’s not going to happen — there are going to be subsidies to industries. So the question should not be whether nuclear should get any subsidy at all, but rather what level of subsidy it gets relative to other alternatives (including subsidies for fossil fuels, which unfortunately do exist).

  • Susan: You all have had more than a few columns in the last year or so about how Nuclear along with Coal and others have actually been subsidized by Government over the years to very large figures of cash and tax benefits. The columns were slanted in the area that we should not subsidize Nuclear and/or coal and others because they were “dirty” and that subsidies would be more effective in the clean fuels (wind/solar etc)area. If the presumption is we want to go to a more cleaner society in power generation which large base line plant source is the cleanest and best?? Now to answer the question you have to gauge whether clean is air polution (and therefore so called C02 emmissions) levels or possible ground contamination (ie. Yucca mountain storage of nuclear waste) levels against the benefit of the power source. In my estimation (as one who spent 20+ years in commercial nuclear power generation) before going to the wind side 10 years ago, Nuclear is the perfect base line companion to wind/solar. It is one of the reasons that the Chinese are building Nuclear plants as fast as wind facilities along with the Koreans and French. Wind/solar are not established yet (nor technologically set up) to provide base line power plant voltage and frequency control, hence for a stable grid some large mass of base line production is always needed. Choices therefore have to be made hedging affect on environment and overall contributions to the region, country and communities affected. If subsidies are needed to provide the overall benefit that a nuclear plant can provide, then subsidies are needed. Otherwise the only other options for base line grid support (voltage and frequency stabilization that wind/solar cannot provide at this time)power generation is hydro (limited availability), oil (hostage to foreign powers), gas (possibly an abundant supply but a C02 emitter), and coal (hundreds of years of supply in the US), but the most evil choice for some.

  • Simply put. No. Nuclear is not newer or cleaner. It is a ‘now’ solution with the longest and most complex ‘later’ problem of any energy source currently in use.

    I agree with Michael and would even take it a step further. Focus on less energy use by both making more efficient devices and vehicles AND by taking a good hard look at our lifestyles and dialing them back a few kilowatts.

  • I’m not a huge fan of nuclear but no green source can generate as much power for such a small input and the newer designs are smaller, more efficient and cheaper. And, with reprocessing, the amount of waste will be considerably less.
    Plus, if we do away with nuclear entirely, where are the useful medical isotopes going to be manufactured?

    • Wind power in Spain recently provided more than 50% of their electricity, and typically provides 40% with variability dealt with. Colorado just achieved 30% renewable power ahead of schedule.
      Moderators have blocked the listing of links, but a little looking can verify these facts. There is enough solar resources, enough wind resources for either to provide 100% of US electricity needs. There are about 3 or 4 reactors in the US that are used for medical isotopes, situated regionally to allow for fast shipping. We have 104 nuclear facilities in the US. Last year renewable energy produced more electricity than nuclear power both in the US and worldwide. Most countries have just begun installing renewable energy other than hydro in less than the last 10 years. Already Germany has reached over 21% renewables. We have no need for nuclear power.

      • I’d be more convinced if Germany wasn’t building more coal plants – if they were committed to renewables, they should keep the nukes online until all the coal-fired power is turned off, and properly decommissioned.
        I fully support renewables – and I hope to see more geothermal in the mix, but I don’t think we should get rid of nuclear when we’re still relying on any fossil fuel, including supposedly-clean natural gas.

        • I seem to recall that Germany was on track to close its coal plants when the latest nuclear meltdown happened at Fukushima.

          At that point it seems that the German people decided to first get the most immediate danger out of their lives.

          I also want to see both coal and nuclear plants closed. I suspect it would be smarter to close the most risky nuclear plants as we get rid of coal. We may have a few nuclear plants which are safe enough to keep using for a while. The big problem is, who do you trust to determine the safety of those plants?

          Over and over the operators of nuclear plants lie about safety issues. The most recent incident which I know about…

          On July 26, according to the NRC report, “monitors indicated a high level of acoustic activity” in the containment building at Crystal River. Progress Energy workers found an area of broken concrete 3 to 4 feet wide and 12 feet long.

          On Aug. 8, Progress gave an update on the situation at Crystal River to Florida’s Public Service Commission, which is reviewing how much, if any, of the charges related to the repair can be passed on to customers.

          Progress made no mention of a possible third crack.


          Staff of the Public Service Commission did not hear about the third crack until Oct. 18, when a Progress engineer, John Holliday, made passing reference to it in a deposition. He was asked about his role in the Crystal River repair after the first crack shut down the plant in 2009.

          • But what makes you think the operators of coal plants are any more honest? I’m not familiar with emissions standards for coal plants in Germany but the ones in the US are pretty weak and there are so many grandfathered ones as to make a joke of any environmental protection.
            In fact, US coal plants are much, much greater emitters of radioactive material than any decently operating nuclear plant.
            And the amount of other airborne debris, flyash, etc makes them a considerably more imminent threat than nukes. I’m not really trying to defend the practices of the nuclear industry but I don’t think it’s fair to point out the shortcomings of US nuclear plants when they’ve been operating at a disadvantage for so long.
            I rather respected President Carter and supported his vision of an energy-independent America but he did the country a disservice by crippling the nuclear industry while setting the stage for the proliferation of coal-fired power.
            I know that he meant it as a stopgap until solar and biofuels ( he referenced “gasohol” in a speech ) were viable but he should have remembered that water flows downhill and men do what is easiest.

          • Look, let’s make sure that we are all sure that I am no fan of coal. Got it? You sure?

            That said, coal plants don’t melt down and spew radiation.

          • Where did I imply you are a fan of coal? This is about the lesser of several evils – I believe that (modern) nuclear is the best of a bad lot.

          • Just a preemptive strike.

            Already up and running and safe nuclear should, IMO, be allowed to run for a while.

            The big problem is that we don’t know which reactors are safe. I gave you one example. Add to that the CA reactor that went for a year with part of its automatic safety system switched off.

            The reactor which was almost hit by a tornado this last summer. The containment dome would have most likely been fine but the grid connection would have been lost. And the backup generation system was in a non-protected building.

            Or Davis-Besse that had leak which ate away the steel containment dome right down to the stainless steel liner.

            How about the two Virginia reactors which were not designed to withstand the earthquake that knocked them offline a few months ago?

            Indian Point probably needs to be closed. Even if it is safe there’s no way to evacuate New York City if the “unknown” makes itself known.

            I think we need a top level review leading to the shutting down of some of
            the reactors now.

            Certainly build no more.

            Nuclear energy makes no financial sense. It’s tossing money down a rat
            hole. And nuclear brings with it issues of safety and hazardous waste that
            renewables do not.

            Nuclear is too expensive. Too dangerous. And too slow to bring on line.

          • I’ll give you points on the “too slow to bring online” as I’ve made that argument myself. But, at least in the US, you’re dealing with quite old units. Has nothing been learned since the last American reactor was built some 30 years ago?
            I would like to see more advanced nuke tech – most of the currently running reactors don’t extract enough the potential energy out of the fuel. And I do want R&D of other nuclear tech such as the Traveling Wave and Thorium to proceed. Unlike diehard nuke proponents, I don’t want renewables to be held back or discarded because they aren’t the equal of nuclear on the basis of power density.
            And I’m thrilled that real progress in being made in the efficiency and cost reduction of solar and energy storage technologies.
            It’s telling that George Monbiot, who does meticulous research, has recently done an about-face on nuclear after arguing against it in his book Heat, just a few years ago.

          • Sure, but let’s take the issue that eliminates (for the most part) new nuclear in the US. Cost.

            I’ve spent a lot of time looking for as many pricing sources as I could find. The very lowest price for new nuclear electricity was from someone inside the nuclear industry who claimed that we could bring a plant on line and produce electricity for $0.12/kWh. The problem, for me, is that he refused to present any details so that one could determine if he had included everything or had done some ‘creative accounting’.

            But for the moment accept that 12 cents. Then add to it the approximate $0.06/kWh that taxpayers provide in subsidies and accepted liability. No new nuclear plant will get built in the US unless taxpayers guarantee the loan during construction. No new nuclear plant will get built in the US unless taxpayers assume liability for a large scale accident.

            We’re now up to $0.18/kWh. Some which we would pay at the meter, some via our taxes.

            OK, now let’s look at the real world data. During the last couple of years there have been three open bids for any company to build a new reactor on a “turnkey” basis. That is, the customer would invest no money until the job was finished. Far too often in the past reactors were started but never completed leaving taxpayers and rate payers to pay off billions of
            construction loans.

            San Antonio, Texas, Ontario, Canada and Turkey all asked for turnkey bids.
            The cost each time would have meant a plant that produced $0.20/kWh or
            higher electricity. Then add in the subsidies.

            A major problem with reactors is that they take so many years to build.
            The cost of financing the construction roughly doubles the cost of
            construction. China and a few other governments can afford to build
            reactors because they don’t have to be fiscally accountable. They can pay
            and ignore the fact that they have billions of dollars ‘not
            preforming’/earning for the years it takes to bring the reactor on line.

            Then selling that power.

            First, almost no utility needs 24/365 power. The big need most places is
            for peak hour power – mostly hot summer afternoons. Most parts of the
            country are well-built for off-peak hour generation. New nuclear would
            have to run 24/365, you can’t shut it down when demand is low. And you
            can’t shut off interest payments on the loan.

            Nuclear would have to sell at a significant loss for much of the day. The
            wind blows at night and makes electricity for a small fraction of what
            nuclear costs. Nuclear would have to sell its power for zero or even
            negative cents for part of some days in order to get under the price of
            wind. That means that it would have to sell for even higher prices during
            the peak hours to make up for the loss. And there is no market for really
            expensive electricity.

            If nothing else, natural gas has killed new nuclear. We can build gas
            peaker plants and use them only when demand is high and do that cheaper
            than nuclear with all its costs built into a limited number of hours per

            Then, as solar prices continue to fall and battery technology improves, we
            will replace those gas peakers with solar, wind and storage. Natural gas
            is not a great thing, it does create CO2 and there are extraction problems,
            but it is what we are using right now. Solar is dropping very fast and we
            have some extremely promising battery technology entering production so my
            guess is that natural gas is a few year bridge from coal to renewables.

            Anyway, that’s my take. If you want I can give you links to a couple of
            studies which estimate the price of new nuclear to be much higher than the
            ‘insider twelve cents’ I reported earlier. My thinking is that if nuclear
            can’t work with a perhaps unrealistic low-ball estimate it has absolutely
            no chance at a higher, objective price.

        • Germany has a time line of around 10 years to eliminate nuclear power. They have enough time to replace the power they need with renewable energy. They just started in 2004, and already have reached 21% renewable power. They suffer with the continuing contamination from Chernobyl, so to them that is the more important hazard. Scrubbers can be added to coal plants to reduce pollution, but a meltdown cannot be prevented or “cleaned up”.

  • No we should not subsidize an energy system that caises cancer and birth defects, that costs more than clean energy, that uses huge amounts of fresh water, and contaminates groundwater. We should not use a system that creates nuclear waste that must be guarded for many thousands of years, at great expense and risk to our descendants for hundreds of generations. It is unconsciencable that for a few decades of electricity we would put this kind of expense and risks onto so many generations to come. History will show that this time contains the most selfish and irresponsible people of all human history.

  • Here’s some more nuclear fun stuff…

    Progress Energy owns the Chrystal River nuclear plant which went offline in 2009 and is not expected to be back on until 2014. They keep discovering parts of the containment dome falling apart.

    The repair bill is expected to total $2.5 billion. The utility wants customers to pay $670 million, or about a quarter of that amount. Again, Progress owns the reactor, not Florida consumers.

    Additionally Progress is having to purchase more expensive power from other sources in order to meet their power commitments. They’re seeking authorization to push this extra cost off on consumers. If this goes through Florida consumers who thought they were getting electricity from reactors “too cheap to meter” are going to encounter some serious price shocks.

    Only 11 of Japan’s 55 reactors are on line. Most were shut following the tsunami. Reactors operators are encountering resistance to restarting the other reactors.

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