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Sunday, June 3, 2012 10:30 AM
Nuclear Energy Is Expensive
Forbes points out:
Nuclear power is no longer an economically viable source of new energy in the United States, the freshly-retired CEO of Exelon, America’s largest producer of nuclear power [who also served on the president’s Blue Ribbon Commission on America’s Nuclear Future], said in Chicago Thursday.
And it won’t become economically viable, he said, for the forseeable future.
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“I’m the nuclear guy,” Rowe said. “And you won’t get better results with nuclear. It just isn’t economic, and it’s not economic within a foreseeable time frame.”
U.S. News and World Report notes:
After the Fukushima power plant disaster in Japan last year, the rising costs of nuclear energy could deliver a knockout punch to its future use in the United States, according to a researcher at the Vermont Law School Institute for Energy and the Environment.
“From my point of view, the fundamental nature of [nuclear] technology suggests that the future will be as clouded as the past,” says Mark Cooper, the author of the report. New safety regulations enacted or being considered by the U.S. Nuclear Regulatory Commission would push the cost of nuclear energy too high to be economically competitive.
The disaster insurance for nuclear power plants in the United States is currently underwritten by the federal government, Cooper says. Without that safeguard, “nuclear power is neither affordable nor worth the risk. If the owners and operators of nuclear reactors had to face the full liability of a Fukushima-style nuclear accident or go head-to-head with alternatives in a truly competitive marketplace, unfettered by subsidies, no one would have built a nuclear reactor in the past, no one would build one today, and anyone who owns a reactor would exit the nuclear business as quickly as possible.”
Alternet reports:
An authoritative study by the investment bank Lazard Ltd. found that wind beat nuclear and that nuclear essentially tied with solar. But wind and solar, being simple and safe, are coming on line faster. Another advantage wind and solar have is that capacity can be added bit by bit; a wind farm can have more or less turbines without scuttling the whole project. As economies of scale are created within the alternative energy supply chains and the construction process becomes more efficient, prices continue to drop. Meanwhile, the cost of stalled nukes moves upward.
AP noted last year:
Nuclear power is a viable source for cheap energy only if it goes uninsured.
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Governments that use nuclear energy are torn between the benefit of low-cost electricity and the risk of a nuclear catastrophe, which could total trillions of dollars and even bankrupt a country.
The bottom line is that it’s a gamble: Governments are hoping to dodge a one-off disaster while they accumulate small gains over the long-term.
The cost of a worst-case nuclear accident at a plant in Germany, for example, has been estimated to total as much as €7.6 trillion ($11 trillion), while the mandatory reactor insurance is only €2.5 billion.
“The €2.5 billion will be just enough to buy the stamps for the letters of condolence,” said Olav Hohmeyer, an economist at the University of Flensburg who is also a member of the German government’s environmental advisory body.
The situation in the U.S., Japan, China, France and other countries is similar.
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“Around the globe, nuclear risks — be it damages to power plants or the liability risks resulting from radiation accidents — are covered by the state. The private insurance industry is barely liable,” said Torsten Jeworrek, a board member at Munich Re, one of the world’s biggest reinsurance companies.
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In financial terms, nuclear incidents can be so devastating that the cost of full insurance would be so high as to make nuclear energy more expensive than fossil fuels.
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Ultimately, the decision to keep insurance on nuclear plants to a minimum is a way of supporting the industry.
“Capping the insurance was a clear decision to provide a non-negligible subsidy to the technology,” Klaus Toepfer, a former German environment minister and longtime head of the United Nations Environment Programme (UNEP), said.
See this and this.
This is an ongoing battle, not ancient history. As Harvey Wasserman reports:
The only two US reactor projects now technically under construction are on the brink of death for financial reasons.
If they go under, there will almost certainly be no new reactors built here.
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Georgia’s double-reactor Vogtle project has been sold on the basis of federal loan guarantees. Last year President Obama promised the Southern Company, parent to Georgia Power, $8.33 billion in financing from an $18.5 billion fund that had been established at the Department of Energy by George W. Bush. Until last week most industry observers had assumed the guarantees were a done deal. But the Nuclear Energy Institute, an industry trade group, has publicly complained that the Office of Management and Budget may be requiring terms that are unacceptable to the builders.
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The climate for loan guarantees has changed since this one was promised. The $535 million collapse of Solyndra prompted a rash of angry Congressional hearings and cast a long shadow over the whole range of loan guarantees for energy projects. Though the Vogtle deal comes from a separate fund, skepticism over stalled negotiations is rising.
So is resistance among Georgia ratepayers. To fund the new Vogtle reactors, Southern is forcing “construction work in progress” rate hikes that require consumers to pay for the new nukes as they’re being built. Southern is free of liability, even if the reactors are not completed. Thus it behooves the company to build them essentially forever, collecting payment whether they open or not.
All that would collapse should the loan guarantee package fail.
