Nuclear Energy nuclear power costs

Published on March 13th, 2012 | by Zachary Shahan


Nuclear’s Tremendous Economic Risk (Put on the Backs of Citizens)

March 13th, 2012 by  

nuclear power costs

A nuclear energy industry veteran, Peter Bradford, recently wrote a strongly worded and pointed article on nuclear energy policy in the journal Nature (subscription required). While he is concerned with a number of approaches to nuclear, from the pro-nuclear side and the anti-nuclear side, it is his comments on the economics of nuclear energy that I think are the most compelling.

“The most implacable enemy of nuclear power in the past 30 years has been the risk not to public health, but to investors’ wallets. No new nuclear-power project has ever bid successfully in a competitive energy market anywhere in the world.”

Wow, that’s a pretty astounding and debilitating statement…. Except, anyone who follows nuclear policy and economics at all (even just for recreation) knows that’s the case.

Nuclear power may have serious environmental and health risks (my biggest concern with it is that most nuclear power options produce radioactive waste that lasts longer than the human species has existed for — how do we expect to contain that?), but for anyone who is a super techno-optimist and thinks we will be able to handle that, the bottom line that nuclear power requires massive support from the public sector (because the private sector won’t take the treacherous financial risks needed to fund nuclear power plants) is the real death knell to the technology. Nuclear economic risk is put on the backs of taxpayers, since investors don’t see nuclear as a good bet.

Damian Carrington of the UK’s Guardian nicely summarizes Bradford’s key point on this topic: “big nuclear programmes only happen when citizens sign blank cheques.” (emphasis mine)

Back to Bradford: “At the time of the Fukushima disaster, only four countries (China, Russia, India and South Korea) were building more than two reactors. In these four nations, citizens pay for the new reactors the government chooses to build through direct subsidies or energy price hikes.” (emphasis mine)

And, what has happened when a company tried to take a different route? Well, let’s look at Bradford’s example, Areva working on a new Olkiluoto 3 reactor in Finland without government support:

“Areva was gambling that the project would jump-start demand for its newest reactor design. As Olkiluoto is four years behind schedule and more than €2 billion ($2.7 billion) over budget, that gamble has fallen flat.” (emphasis mine)

What if there was a price on CO2?

Many nuclear lovers claim that a price on CO2, which should be in place worldwide now, would make nuclear competitive, but there are so many clean energy options available for a lower cost that can go up or be implemented much more quickly, I think it’s more than optimistic to say that nuclear could hold its own (without more government/taxpayer support).

By the time a new nuclear power plant is in place, solar power should be much cheaper. Wind power is already cheaper. And then there’s also cheap geothermal and hydro energy in some locations. How could nuclear compete, really?

How the UK & US go about supporting nuclear power

Now, some countries are still moving forward with nuclear. Two of those are the US and the UK. In the UK, Bradford notes that the way it is done is by essentially trying to trick the public into thinking nuclear is not being subsidized.

“The UK government is now having to torture the language of new policies to subsidise new reactors without this being recognised as such.”

In the US, well, I think not much effort is even needed to do that. The populous is so unaware of what is going on, policy-wise, and so influenced by political talk detached from policy, that politicians can do almost whatever the industries that support them want them to do.

Carrington notes: “The first licence to build new reactors in the US since 1978 was granted on 9 February.” I wonder how much of the population realizes that, and even more, so I wonder how much of the population realizes what that means or this simple fact: Georgia is one of a few states that guarantees the electricty ratepayers (customers) will pay 100% of the reactor costs, no matter what the price.

In other words, the electricity customers haves signed a blank check to an industry that consistently runs billions and billions of dollars of projected costs, and industry which already can’t compete with solar or wind power. Intelligent move, eh? I guess it pays to pay attention, and you pay someone else when you don’t.

Image: nuclear power plant in Czech Republic courtesy shutterstock

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About the Author

is tryin' to help society help itself (and other species) with the power of the typed word. He spends most of his time here on CleanTechnica as its director and chief editor, but he's also the president of Important Media and the director/founder of EV Obsession, Solar Love, and Bikocity. Zach is recognized globally as a solar energy, electric car, and energy storage expert. Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in.

  • brian

    Bob, except you need the sun to be shining, the wind to be blowing and storage so that you can feed the grid. Baseload capacity is gigawatts, not kilowatts. The Fukushima situation has no relevence in the US, those reactors that failed were a generation behind those being used in the US. The comments I made were to address the claim that citizens are being “forced” to finance new nuclear. These are public utilities building these plants, people can move if they like, or install their own wind turbines and then they won’t have to worry about their rate increases.

    • Bob_Wallace

      You are correct, Brian. It does require that the Sun shines and the wind blows. As well, rivers need to run, tides ebb and flow, and deep earth provide lots of heat.

      I suspect you haven’t considered how much energy is available for our taking. Let me give you some things to chew on…

      “(Dr. Alexander MacDonald, Director of the Earth System Research Lab at the) U.S. National Oceanic and Atmospheric Administration (NOAA) was in Vancouver on Friday for the American Association for the Advancement of Science’s annual convention and mentioned in a talk there that clean, renewable energy (not even including hydroelectric) could cheaply supply 48 states of the continental U.S. with 70% of its electricity demand by 2030. The other 30% would be half from fossil fuels and half from nuclear and hydro.

      “NOAA embarked on the renewables project three years ago, collating 16 billion pieces of weather data derived from satellite observations and airplane observations and weather station reports,” Scott Simpson of the Vancouver Sun writes.

      “Then it designed a program to filter the information to remove unlikely venues for wind or solar power arrays – such as national parks and urban areas – and came up with a map showing robust wind resources in the middle of the continent and decent ones in the northeast Atlantic states, as well as strong solar production areas in the desert southwest.”

      But here’s where the NOAA researchers stepped beyond the good to the great, research-wise: they balanced potential power production and electricity demand to determine, how, where, when, and to what extent clean energy could produce the electricity we need. The end result — 70% of electricity demand…. could-supply-u-s-with-70-of-electricity-by-2030-no aa-director-says/”

      16 billion pieces of real world data. “How, where, and when” addressed. 70% renewable, 15% fossil fuels, 7.5% nuclear and 7.5% hydro. We already have the fossil (natural gas turbines), nuclear and hydro.

      Then, over time, we can avoid the natural gas and retire the nuclear, replacing them with large scale storage (battery, CAES, pump-up hydro).

      Then, world-wide, give this a read…

      It’s a little outdated. Our current solar panels are more efficient, as are our wind turbines. We’re starting to install very large battery storage on the grid. And we’ve increased our efficiency. Doing the job now would actually be a bit easier than what Mark and Mark lay out.

      Fukushima has an incredible amount of relevance. Those reactors were built by humans and humans screwed up. They knew that there was a geological history of tsunamis capable of taking out the reactors, yet they decided to cut corners and take the risk of bad siting/inadequate sea walls.

      Just like humans screwed up at Three Mile Island and Chernobyl which also melted down. And humans built the POS reactor, Rancho Seco, just outside of Sacramento. And humans built the Humboldt Bay reactor on top of an active fault line. And humans, a human, crawled around Brown’s Ferry with a lit candle and set the reactor on fire. And (I really can go on if need be….).

      Humans screw up. I do not buy into the “Trust us, we’ll get it right this time” promises of the nuclear industry.

      And since we can install renewables faster and cheaper we don’t need to purposely incur the additional danger that nuclear brings to the table.

      Leave the tiger alone. Do not poke the tiger.

    • Bob_Wallace

      And this part, I want to address it separately…

      ” These are public utilities building these plants, people can move if they like, or install their own wind turbines and then they won’t have to worry about their rate increases.”

      Georgia is a very ‘red’ state. A place dominated by people who love the free market and hate socialism.

      And look what they are letting their state government do to them. State government, not “Obambi and the evil federal government”.

      They are allowing their Republican state government seize dollars from them and give to a utility company. The utility company will build nuclear reactors and if something happens so that the reactors are never finished (something that happened very often in the past) those people simply loose their dollars.

      If the reactors are finished it’s almost certain, even after donating millions of dollars to the utility company their electricity prices will rise. Georgians currently pay $0.11/kWh. New nuclear is almost certainly going to be higher.

      Then, if all that power can’t be used, the surplus is going to be sold at a loss outside of the state and residents will have to make up for the loss at even higher electrical prices. Can’t shut off a reactor when demand is down for a few hours.

      If individuals install windmills or solar panels and drop off the GA grid then the loss will fall more heavily on those unable to install solar or wind.

      Or they can move….

      If this sort of plan came out of the White House the good citizens of the South would be up in arms.

      The only way nuclear reactors can be built is if people accept socialized power.

  • Brian

    Zach, back these comments up with figures, actual numbers instead of commentary. If you’re right, it will be an easy win for your viewpoint, but no one from clean tech ever publishes the costs of either option. The nuclear side is just as weak, if there is transparency in costs, then decisions can be made.

    Anything built to benefit the public on this kind of scale, the hydro plants built during the depression, road maintainence, bridges, the rail system, public housing, and ports, etc, are all maintained or built on funds taken in advance or paid through the creation of debt. This is no different than the NFL owners that get public funding to build their new stadiums. Which create jobs right? Sure. most of the profit goes somewhere else, nuclear plants are just a larger project.

    The spent fuel arguement has gotten old, it can be handled by people who know what they are doing and talking about instead of politicians and policy writers

    • Bob_Wallace

      Here, Brian, I’ll give you some numbers.

      It’s hard to determine what new nuclear would actually cost in a free market. Let’s look at what we do know.

      In 2009 Ontario, Canada received a ‘turn key’ bid for a couple of new reactors. They wanted a turn key/all in bid because the history of the nuclear industry has been to bid low and then deliver for 2x to 3x the initial estimate.

      The bid they received was $10,800/kWh. That would have made some expensive electricity.

      San Antonio Texas did the same thing, requested a turn key bid for two 1,300MW reactors. They did not release the received bid price but did state that it was more than $4 billion in excess of earlier bid estimates. Adding $4 billion would have made the total close to Ontario’s price per kWh.

      A consultant working with San Antonio has stated that power from the new reactors would have cost $0.15 to $0.16/kWh.

      Turkey did the same, but a bit differently. They asked for a bid for multiple new reactors to be built and operated by outside companies and wanted a fixed price for the power produced. The bid they got was $0.21/kWh.

      None of those prices reflect the additional costs likely required after the Fukushima meltdown.

      Large commercial rooftop solar in a sunny location is now $0.16/kWh and rapidly falling.

      Wind from modern turbines in good sites is roughly $0.05/kWh.

      Geothermal is about $0.09/kWh.

      Financing – private money will not finance new reactors. New reactors can only borrow money at higher interest rates and only if taxpayers underwrite the loan.

      Wind farms, solar arrays, and other clean tech generation also require financing but private money is flowing into those industries.

      I’ll try to ignore your incorrect claims about no one ever publishing figures and spent fuel having an acceptable solution.

      • Jgerardi

        My argumen is that we have not researched for nuclear plants of the future because usa is not building them. Bob those figures are comparing the total costof nuclear to just generation cost of nuclear to just generation costs from renewables. If we are going to have a debate nuclear in this country, we need to review what made costs so high 40-60 years ago. If that means updating the nuclear plant building code, putting more r&d, putting binding construction dates so it won’t be delayed like in Bruce,ontario. Cost can go up drastically if they are managed poorly. What we need is more companies as bold as terra power. Not saying terra power will pan out but if we had more companies tackling these problems, but if 1 breakthrough can change nuclear power it will help fight global warming. If we can get nuclear and hydro to be running 24/7 we can supplement it with renwables. Solar has great potential for costs to go down but I think solar panels need to increase efficiency to double to really be competitve.

        • Bob_Wallace

          We have been building reactors. The nuclear industry is global, not US-centric. If building reactors made reactors cheaper then we would see falling prices, which we are not.

          We know why reactors are expensive. They require large amounts of concrete, steel, wiring, pipes, and lots of labor. And they take a very long time to build. During those many years of construction they accrue interest debt and that interest debt creates more interest debt.

          Wind and solar have a huge advantage in that they go from start to producing so quickly. A wind farm borrows money and in less than two years, even less than one year, has an income stream that starts paying down the loan. For solar it’s weeks or months.

          We have updated the nuclear regulation process. It was very much streamlined a few years ago. That is not a stumbling block for new nuclear.

          I’m going to assume that you aren’t willing to lower safety standards in order to cut construction costs.

          We’ve had a number of large utility companies consider new reactors over the last few years. They have spent many millions of dollars looking for a way to make nuclear affordable and (except for regulated markets) they have stepped away from nuclear and put their money into wind and solar.

          The darling of the pro-nuclear folks right now is the Westinghouse AP1000. It’s the reactor “that’s going to make things different”. But if you look at the real world, there have been three recent opportunities for Westinghouse to build a number of their reactors if they could deliver at a reasonable, market-priced electricity price. Ontario wanted two new reactors, San Antonio wanted two, and Turkey want two to six reactors.

          The fact that Westinghouse didn’t even bother to bid tells me that they couldn’t deliver at an acceptable price.

          Duke, Exelon, and other utility companies would have built reactors if the numbers made sense to them. They already own and operate reactors.

          The only places where new reactors are being build are where the cost of their power can be paid in part by tax dollars or forced down customers’ throats.

          Solar is already competitive in some markets. India is ramping up solar installations because it’s cheaper to use solar than to burn diesel. Hawaii is also at that point since most of their electricity comes from imported oil.

          Solar is already cheaper than NG peaker plants in sunny parts of the US.

          Solar is cheaper for end-users in many parts of the US. You can make your own power cheaper than purchasing it on the retail market.

          The price of solar fell below $1/watt late last year and is on route to hitting $0.50/watt in the next few years. We need to bring the price of installation down, which we can do, and solar will be as cheap as wind.

          I’d suggest you watch for a tremendous boom in solar installations over the next 2-3 years as businesses start to feel it’s safe to start investing in themselves once more. Installing solar and switching to efficient lighting sends money straight to the bottom line.

          We don’t want to run hydro 24/7. Best to use it as dispatchable fill in order to decrease the amount of storage we will need later on.

          Do you know that we built about 24GW of pump-hydro storage in order to deal with the “always-on” reactors we built back in the last century?

          Grids always need storage or excess generation standing by or the ability to dump loads, regardless of how we generate.

          Nuclear plants require a lot of backup because they can go offline unexpectedly and when they do they make a great big dent in supply.

          That happened last year in Virginia when two reactors suddenly shut down due to an earthquake. The grid needed months of substitute power.

          We’ve poured tons of money into nuclear power. All that money and all the brilliant minds who have toiled have not brought us cheap electricity.

          We’ve got much more promising routes, so let’s get on with the going down the road….

  • Bill_Woods

    “my biggest concern with it is that most nuclear power options produce radioactive waste that lasts longer than the human species has existed for — how do we expect to contain that?”

    Cross one item off your list of things to worry about. The experience with the reactors in Gabon shows that this isn’t that big a deal.

    Uranium fission produces radioactive waste, whether the fission takes place in a natural or an artificial nuclear reactor. Surprisingly, Australian geologists J.R. de Laiter, K.J.R. Rosman, and C.L. Smith found that virtually all of the radioactive waste produced by the Oklo reactors can be accounted for. What makes this remarkable is that this radioactive waste has been sitting in porous rock that has been saturated with water for two billion years – and it’s still largely in place. This bodes well for our trying to isolate radioactive waste for a mere hundred thousand or million years in a specially designed repository dug into much less permeable rock that is only occasionally waterlogged.

    Meanwhile, it looks like you’ll be getting some first-hand experience.

    The economy is booming, and Poland needs electricity — a lot of electricity. For that reason, Krzemiski believes that the dream of his youth will become a reality after all, and that a reactor will finally be built on Lake Zarnowiec. “Coal is running out, the wind isn’t very strong in Poland and the sun rarely shines,” he says. “We need nuclear energy.”,1518,820756,00.html

  • GeorgiaPayer

    Also, don’t forget to mention that GA makes it’s rate payers pay BEFORE the reactor is even built!

    • Bob_Wallace

      This is one of the most amazing financial scams I have ever seen.

      Customers are force to donate money to the company that wants to build a reactor. The company can build without having to borrow money and if they fail to finish the reactor (and a lot of starts are never finished) the company loses nothing, but the customers do.

      Then, if the reactor comes on line, customers will already be accustomed to paying higher electricity rates so the resulting price increase from the new nuclear won’t feel quite so painful.

      Florida has tried to pull this off as well, but people there are starting to complain.

      I just can’t see this as anything but stealing….

  • man4earth

    Excellent article, one thing I think should be pointed out is that the true cost of nuclear power should include the maintenance of waste from mining uranium and the spent fuel waste, both require management for thousands of years. If those two costs were added to the price of nuclear energy and they should be, then solar energy is already way cheaper.

    • Exactly. Kicking myself now for not making that point more clear in the post above.

      Somehow, I don’t understand how people can think nuclear power is cheap when it creates waste that lasts longer than humans have existed for. Even if the cost of keeping that waste safe is small, it last for nearly forever(!) — multiply that ‘small’ annual cost by nearly infinity and see what you get, right? Additionally, add in the cost of the leaks and mistakes that occur in that time.

      Common sense. Apparently not so common.

  • Chooselife55

    Yes, crematoriums are expensive for mass populations. Wrong in every way and cheating us out of sustainable energy…no oil from the middle east…then burn.

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