The true price of nuclear power

2007-10-08

in Bombs and rockets, Economics, Politics, Science, Security, The environment

Maple leaf

Several times this blog has discussed whether climate change is making nuclear power a more acceptable option (1, 2, 3). One element of the debate that bears consideration is the legacy of contamination at sites that form part of the nuclear fuel cycle: from uranium mines to post-reactor fuel processing facilities. The Rocky Flats Plant in the United States is an especially sobering example.

Insiders at the plant started “tipping” the FBI about the unsafe conditions sometime in 1988. Late that year the FBI started clandestinely flying light aircraft over the area and noticed that the incinerator was apparently being used late into the night. After several months of collecting evidence both from workers and by direct measurement, they informed the DOE on June 6, 1989 that they wanted to meet about a potential terrorist threat. When the DOE officers arrived, they were served with papers. Simultaneously, the FBI raided the facilities and ordered everyone out. They found numerous violations of federal anti-pollution laws including massive contamination of water and soil, though none of the original charges that led to the raid were substantiated.

In 1992, Rockwell was charged with minor environmental crimes and paid an $18.5 million fine.

Accidents and contamination have been a feature of facilities handling nuclear materials worldwide. Of course, this does not suffice to show that nuclear energy is a bad option. Coal mines certainly produce more than their share of industrial accidents and environmental contamination.

The trickiest thing, when it comes to evaluating the viability of nuclear power, is disentangling exactly what sort of governmental subsidies do, have, and will exist. These subsidies are both direct (paid straight to operators) and more indirect (soft loans for construction, funding for research and development). They also include guarantees that the nuclear industry is only responsible for a set amount of money in the result of a catastrophic accident, as well as the implicit cost that any contamination that corporations cannot be legally forced to correct after the fact will either fester or be fixed at taxpayer expense. Plenty of sources claim to have a comprehensive reckoning of these costs and risks, but the various analyses seem to be both contradictory and self-serving.

Before states make comprehensive plans to embrace or reject nuclear power as a climate change mitigation option, some kind of extensive, comprehensive, and impartial study of the caliber of the Stern Review would be wise.

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{ 25 comments… read them below or add one }

Antonia October 8, 2007 at 9:28 am

Hear hear.

Anon October 8, 2007 at 3:13 pm

Climate change, mass species extinctions, nuclear waste – how many curses will we lay upon the heads of future generations?

Neal October 8, 2007 at 6:55 pm

Of course, removing these subsidies and pricing carbon would be one way to estimate the costs and benefits of nuclear power. If the firms interested in nuclear energy had to take on all the risk themselves, I’m sure they and their insurers would be fairly dilligent in assessing the costs and benefits of any given nuclear generating facility, uranium mine, etc.

Personally, I think the environmental cost of nuclear power pales in comparison to that of coal, but that isn’t exactly saying much.

Milan October 8, 2007 at 10:51 pm

See: Waste Isolation Pilot Plant

“The Waste Isolation Pilot Plant, or WIPP, is the world’s first underground repository licensed to safely and permanently dispose of transuranic radioactive waste that is left from the research and production of nuclear weapons. It is located approximately 20-miles almost due east of Carlsbad, New Mexico. Waste is placed in rooms 2,150 feet (655 m) underground that have been excavated from a 2,000 foot (600 m) thick salt formation that has been stable for more than 200 million years. Because salt is somewhat plastic and will flow to seal any cracks that develop, it was chosen as a host medium for the WIPP project.”

Milan October 10, 2007 at 1:46 am

Are we there yet?
Nuclear still on the verge of its comeback

Milan October 10, 2007 at 5:12 pm

Windscale
By bsag

It’s the 50 year anniversary of the disastrous fire at the Windscale nuclear reactor, and there was an excellent documentary on BBC Two on Monday. I knew the basic story of the fire, but not the details, which — it has to be said — were fairly terrifying. It could easily have turned into a far more serious situation, but for the actions of staff at the site.

As they said in the documentary, because it was Britain’s first nuclear reactor, they had no idea what to do when the fire broke out. The deputy general manager, Tom Tuohy, described climbing up on top of the pile, opening an inspection hatch and seeing a raging inferno inside the graphite core. I can’t remember his exact words in the documentary, but he grinned and said something like, “I remember thinking, Blimey! What a mess.” Classic British understatement strikes again… They took the brave step of running water through the pile, without knowing at the time whether it would put the fire out or cause a massive explosion. In the end, it did neither; the fire still burned because of the air blown through the pile which was also supposed to cool the uranium cartridges. Again, they had another terrible decision to make about whether to leave the fans running and risk spreading and feeding the fire, or turn them off and risk further overheating. They chose to turn the fans off, and luckily the fire went out.

. October 12, 2007 at 2:51 pm

Oct 4th 2007 letters

SIR – You ignore important subsidies to the American nuclear industry, but repeat its most pernicious myths (“Atomic renaissance”, September 8th). The Price-Anderson Act and its 2005 expansion shift the insurance burden for nuclear accidents from utilities to taxpayers. Nor does the $.001/kilowatt-hour Nuclear Waste Fund fee cover the anticipated costs of radioactive waste. If industry bore these costs, there would be no nuclear resurrection.

Meanwhile, the Congressional Budget Office predicts a 50% or higher default rate on taxpayer-backed loans to nuclear utilities enabled through the 2005 energy bill, now being considered in Congress for a tenfold expansion. You are right: nuclear power is now “too expensive to matter.”

Michael Mariotte
Executive director
Nuclear Information and Resource Service
Washington, DC

SIR – You describe the causes of the Chernobyl disaster to be “a combination of operator errors and inherent flaws in the plant’s design” (“Nuclear dawn”, September 8th). The real cause was not operator- or even industry-related. Soviet scientists were authorised to carry out experiments that required the reactor to be pushed to or beyond its limits, with safety features disabled. Consequently, meltdown occurred. This is documented by both Western and Soviet sources. All reactors have elaborate safety features to guard against similar disasters; proof lies in there having been no other Chernobyls. It is hard to imagine any nuclear power plant owner allowing the same misuse to occur again.

Philip De Groot
Toronto

SIR – Your assertion that fears of nuclear power may be overblown, citing a figure of around 4,000 eventual deaths from the Chernobyl accident, is extraordinarily short-sighted and misleading (“Nuclear power’s new age”, September 8th). Are the continuing birth defects and the death of the surrounding region irrelevant?

Michael Grove
Boston

. October 18, 2007 at 9:38 am

This relates to nuclear plants as well:

Chemical Plant Security and Externalities

It’s not true that no one worries about terrorists attacking chemical plants, it’s just that our politics seem to leave us unable to deal with the threat.

Toxins such as ammonia, chlorine, propane and flammable mixtures are constantly being produced or stored in the United States as a result of legitimate industrial processes. Chlorine gas is particularly toxic; in addition to bombing a plant, someone could hijack a chlorine truck or blow up a railcar. Phosgene is even more dangerous. According to the Environmental Protection Agency, there are 7,728 chemical plants in the United States where an act of sabotage — or an accident — could threaten more than 1,000 people. Of those, 106 facilities could threaten more than a million people.

Anonymous October 30, 2007 at 1:59 pm

NUCLEAR POWER: TVA to seek approval for two new Ala. reactors (10/30/2007)

The Tennessee Valley Authority plans to file an application perhaps as soon as today to build two new reactors at a site in Alabama.

The proposal — the second application for new U.S. reactors in 30 years — is expected to be announced on Capitol Hill by a longtime friend of the nuclear industry, Sen. Pete Domenici (R-N.M.), and include Tennessee Republican Sens. Lamar Alexander and Bob Corker, Deputy Secretary of Energy Clay Sell, and officials from TVA and NuStart Energy, a consortium of companies testing the Nuclear Regulatory Commission’s new licensing process.

The TVA application could be submitted as early as today, a TVA spokesman said.

TVA is seeking federal approval for two new reactors at its Bellefonte nuclear plant near Scottsboro, Ala. The reactors would provide an estimated 1,400 megawatts a day according to the authority’s early cost estimate.

The Energy Department selected NuStart Energy and TVA Bellefonte to demonstrate the new NRC combined construction and operating license. TVA is one of 10 entities in NuStart

Bellefonte has two partially built reactors that TVA canceled and never finished after investing $6 billion. The old reactors are not expected to figure in new construction plans. The company plans on using Westinghouse AP1000 advanced reactors, an NRC-certified technology. The reactor is made by Westinghouse Electric Co., which was acquired by Toshiba Corp. in early 2006.

New Jersey-based NRG Energy submitted the first combined construction and operating license last month since the late 1970s. The license will be for two advanced boiling water reactors made by General Electric Co. for its South Texas site for a combined additional 2,700 megawatts.

NRC is expecting about 21 applications for more than 30 new reactors over the next few years.

. October 31, 2007 at 10:37 am


The Achilles heel of nuclear power

Nuclear plants require lots of water in an increasingly dry world

No, I don’t mean cost, safety, waste, or proliferation — though those are all serious problems. I mean the Achilles heel of nuclear power in the context of climate change: water.

Climate change means water shortages in many places and hotter water everywhere. Both are big problems for nukes:

… nuclear power is the most water-hungry of all energy sources, with a single reactor consuming 35-65 million litres of water each da

Anon November 6, 2007 at 10:46 am

The atom and the windmill

Oct 25th 2007
From The Economist print edition
Nuclear power draws nearer as renewables retreat

THE timing was impeccable. As the first hints of winter sent temperatures falling this week, British Energy, whose eight nuclear power stations can meet a fifth of Britain’s electricity demand, said on October 22nd that it had discovered a technical problem in one of its reactors. Worried that three similar reactors might be similarly afflicted, it decided to shut two of them down and to delay restarting the other, which was offline for maintenance.

British Energy shares dived 8% that day and short-term power prices jumped by about 15%. Unplanned outages have been commoner of late. Another of the firm’s reactors is also offline due to an “electrical fault”. Last year cracked boiler pipes forced a long shutdown at two other sites.

. November 9, 2007 at 3:29 pm

A life cycle analysis centered around the Swedish Forsmark Nuclear Power Plant estimated carbon dioxide emissions at 3.10 g/kWh and 5.05 g/kWh in 2002 for the Torness Nuclear Power Station. This compares to 11 g/kWh for hydroelectric power, 950 g/kWh for installed coal, 900 g/kWh for oil and 600 g/kWh for natural gas generation in the United States in 1999

Anon November 16, 2007 at 4:21 pm
. April 4, 2008 at 3:30 pm

Continuing the Nuclear Debate

By Chris Vernon on thorium

We have run several articles recently on nuclear power and without fail they have stimulated enthusiastic debate. This is an opportunity to continue that debate. To start us off we have three guest contributions:

Skip Meier – Nuclear Waste
Bill Hannahan – We have yet to design the Model T of nuclear power plants
Charles Barton – Thorium Reserves

. April 4, 2008 at 3:31 pm

“Today we should be designing fourth generation nuclear plants, building third generation plants, living off the energy of second generation plants and converting our first generation plants into museums. In fact, no two nuclear power plants are exactly alike. We have yet to build the Model T of nuclear power plants.

Imagine that Boeing built airplanes in a swamp, outdoors, far away from any attractive place to live, using minimal tooling and equipment. Workers and equipment would be exposed to rain snow dust heat and insects. Very high salaries would be required to attract workers away from their families to work in harsh conditions. Productivity and quality would be low. The airplanes would be more expensive, less clean, less safe and less reliable than modern factory built planes. That is the way our first generation nuclear plants were built.

We should build facilities to mass produce floating nuclear power plants. They would consist of a canal 600 feet wide and a mile long, enclosed inside a building equipped with high quality lighting, heat, air conditioning, fire protection, communication systems, cranes and tooling, that provide a comfortable safe efficient work environment.”

. May 23, 2008 at 11:59 am

CBO Nuclear Report, Pt. 2: Construction Cost Peril

By John Geesman on nuclear subsidies

The notable assessment of the future role of nuclear power, published this month by the Congressional Budget Office, derives significance less from its breadth or depth than from the insight it provides into the thinking of Congress’ official fiscal scorekeeper. The report, assembled at the direction of revered nuclear champion Senator Pete Domenici, casts a wary (though bleary) eye at construction cost risk.

. May 23, 2008 at 11:59 am

CBO Nuclear Report, Pt. 2: Construction Cost Peril

By John Geesman on nuclear subsidies

The notable assessment of the future role of nuclear power, published this month by the Congressional Budget Office, derives significance less from its breadth or depth than from the insight it provides into the thinking of Congress’ official fiscal scorekeeper. The report, assembled at the direction of revered nuclear champion Senator Pete Domenici, casts a wary (though bleary) eye at construction cost risk.

. June 2, 2008 at 4:55 pm

Forget Nuclear
By Amory B. Lovins, Imran Sheikh, and Alex Markevich

Nuclear power, we’re told, is a vibrant industry that’s dramatically reviving because it’s proven, necessary, competitive, reliable, safe, secure, widely used, increasingly popular, and carbon-free—a perfect replacement for carbon-spewing coal power. New nuclear plants thus sound vital for climate protection, energy security, and powering a growing economy.

There’s a catch, though: the private capitalmarket isn’t investing in new nuclear plants, and without financing, capitalist utilities aren’t buying. The few purchases, nearly all in Asia, are all made by central planners with a draw on the public purse. In the United States, even government subsidies approaching or exceeding new nuclear power’s total cost have failed to entice Wall Street.

This non-technical summary article compares the cost, climate protection potential, reliability, financial risk, market success, deployment speed, and energy contribution of new nuclear power with those of its low- or no-carbon competitors. It explains why soaring taxpayer subsidies aren’t attracting investors. Capitalists instead favor climate-protecting competitors with less cost, construction time, and financial risk. The nuclear industry claims it has no serious rivals, let alone those competitors—which, however, already outproduce nuclear power worldwide and are growing enormously faster.

Most remarkably, comparing all options’ ability to protect the earth’s climate and enhance energy security reveals why nuclear power could never deliver these promised benefits even if it could find free-market buyers—while its carbon-free rivals, which won $71 billion of private investment in 2007 alone, do offer highly effective climate and security solutions, sooner, with greater confidence.

. June 2, 2008 at 5:04 pm

Lacking investors, nuclear promoters have turned back to taxpayers, who already bear most nuclear accident risks and have no meaningful say in licensing. In the United States, taxpayers also insure operators against legal or regulatory delays and have long subsidized existing nuclear plants by ~1–5¢ per kilowatt-hour. In 2005, desperate for orders, the politically potent nuclear industry got those subsidies raised to ~5–9¢ per kilowatthour for new plants, or ~60–90 percent of their entire projected power cost. Wall Street still demurred. In 2007, the industry won relaxed government rules that made its 100 percent loan guarantees (for 80 percent-debt financing) even more valuable—worth, one utility’s data revealed, about $13 billion for a single new plant. But rising costs had meanwhile made the $4 billion of new 2005 loan guarantees scarcely sufficient for a single reactor, so Congress raised taxpayers’ guarantees to $18.5 billion. Congress will be asked for another $30+ billion in loan guarantees in 2008. Meanwhile, the nonpartisan Congressional Budget Office has concluded that defaults are likely.

Wall Street is ever more skeptical that nuclear power is as robustly competitive as claimed. Starting with Warren Buffet, who just abandoned a nuclear project because “it does not make economic sense,” the smart money is heading for the exits. The Nuclear Energy Institute is therefore trying to damp down the rosy expectations it created. It now says U.S. nuclear orders will come not in a tidal wave but in two little ripples—a mere 5–8 units coming online in 2015–16, then more if those are on time and within budget. Even that sounds dubious, as many senior energyindustry figures privately agree. In today’s capital market, governments can have only about as many nuclear plants as they can force taxpayers to buy.

. June 20, 2008 at 2:32 pm

Nuclear power is now offered as an alternative to coal power. But, in actuality, Big Nuke is Big Carbon’s mad-scientist cousin. Both externalize their costs: To the land, to the atmosphere, to miners, to consumers, to communities near the mines and refining facilities, and especially to future generations who will live with the long-term consequences of our short-term gains. The damage that both do is, of course, justified as necessary and unavoidable.

. January 5, 2009 at 11:39 am

Exclusive analysis, Part 1: The staggering cost of new nuclear power

A new study puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

The new study, Business Risks and Costs of New Nuclear Power, is one of the most detailed cost analyses publically available on the current generation of nuclear power plants being considered in this country. It is by a leading expert in power plant costs, Craig A. Severance. A practicing CPA, Severance is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission.

. January 8, 2009 at 12:19 pm

Warning to taxpayers, investors — Part 2: Nukes may become troubled assets, ruin credit ratings

Part 1 presented a new study that puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

Nuclear plants with such incredibly expensive electricity and “out of control” capital costs, as Time put it, obviously create large risks for utilities, their investors, and, ultimately taxpayers. Congress extended huge loan guarantees to new nukes in 2005, and the American people will be stuck with another huge bill if those plants join the growing rank of troubled assets (see “Nuclear energy revival may cost $315 billion, with taxpayers’ risking over $100B“).

. June 11, 2009 at 1:34 pm

NUCLEAR: Company proposes ‘nuclear lite’ to cut power plant costs (06/11/2009)

Peter Behr, E&E reporter

A segment of the nuclear power industry wants to see whether the rising price tags on new nuclear reactors can be overcome by going small.

Babcock & Wilcox, a manufacturer of nuclear power plants for the Navy, yesterday said it wants to develop a 125-megawatt reactor — roughly one-tenth the size of the new nuclear power plants now being proposed. The plants could be operated singly, or a number of units could be combined on the same site.

The company does not plan to begin seeking design approval from the Nuclear Regulatory Commission until 2011. It announced that the Tennessee Valley Authority, a group of municipal and cooperative power companies in the Southeast, and four major electric power companies will be its partners in exploring the feasibility of its “nuclear lite” proposal.

Chris Mowry, president and CEO of B&W Modular Nuclear Energy LLC, who heads the project, said the goal is to hold “overnight” construction costs to $5,000 per kilowatt of capacity or less, referring to a way of representing project costs that excludes inflation and financing costs over the entire construction period. Several years ago, power companies were looking at overnight costs of about $3,000 per kilowatt of capacity, but that number has jumped to — or past — $5,000 in some cases this year.

. November 30, 2009 at 2:53 pm

The economics of nuclear power
Splitting the cost

Nov 12th 2009
From The Economist print edition
Nuclear energy is unlikely to work without a carbon tax

PLANNING is not the only obstacle to a rebirth of nuclear power in Britain. The technology’s torturous economics are, if anything, even trickier. The trouble is that, whereas the fuel is cheap, nuclear-power plants themselves are very expensive to build and the pay-off from that investment is slow.

It is hard to know the true cost of a modern nuclear plant. Most Western reactors that are still running were built years ago (Britain’s newest, Sizewell B, is 14 years old). Two new reactors of the type Britain may choose are being constructed in Finland and France. Discouragingly, the Finnish reactor, originally priced at €3 billion (£2.1 billion at the time), is three years late and around €2 billion more expensive than expected. The French plant is also thought to be over budget, by around 20%.

. February 16, 2010 at 12:11 pm

“DOE plans to announce tomorrow the loan guarantee, which would provide financial backup for two new reactors at Southern’s Vogtle site near Augusta, Ga., the sources said. The Vogtle reactors would be the first new U.S. nuclear units to be licensed and built in about 30 years.

Southern’s partners in the project include Oglethorpe Power Corp. and Municipal Electric Authority of Georgia.

Southern estimates the two new reactors will cost $14.5 billion. Under the loan guarantee program, the government may guarantee up to 80 percent of a nuclear project’s cost, but the recipient must pay a percentage as a “credit subsidy” fee set by DOE and the Office of Management and Budget. The size of the credit subsidy fee has been the focus of squabbles among the government, industry and advocacy groups.”

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