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Nuclear Power’s Cost Competitiveness Remains a Critical Question
Nuclear power has long been controversial for its radioactive waste, history of dangerous meltdowns and potential to help spread nuclear weapons. With those arguments against it, and with a spotty record of construction and management in the 1970s and 1980s, the United States hasn’t welcomed a new nuclear power plant since 1996 – and that one had been in the works since 1973.
Now, however, fears about climate change, along with changes in the industry and in regulatory practices, are changing the nuclear energy calculus.
“Nuclear right now is at a crossroads. There are a lot of possibilities that nuclear can make a good contribution to solving the greenhouse problem, but those possibilities are just ifs,” says John Parsons, executive director of the Center for Energy and Environmental Policy Research at MIT and an author of a widely cited report, The Future of Nuclear Power.
Nuclear power will almost certainly be part of climate legislation discussed in the U.S. Senate. Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.), who is writing the Senate's version of the climate bill, was clear about that last week, saying, “There will be a nuclear title in the bill.”
But a new study tallying the cost of nuclear power suggests that nuclear's many uncertainties could push it out of the realm of being cost-competitive.
The study looked at the break-even investment required for nuclear to be cost-competitive with other energy alternatives. Unlike other forms of power generation whose major expense is fuel, nuclear power requires a large upfront investment for construction; it comprises 70% of the total costs for nuclear electricity, with 20% going towards operation and maintenance and 10% to fuel.
The uncertainties related to construction mean nuclear energy can easily exceed projected costs, in some cases by as much as 300 percent, writes the study's author, Pedro Linares of Instituto de Investigacion Tecnologica in Madrid.
For example, Areva’s construction costs for Finland's new Olkiluoto 3 reactor (right), currently three years behind schedule, jumped from an original estimate of 3 billion euros to 5.3 billion euros this year, and the company says the cost could rise further due to delays caused by faulty materials and planning problems.
According to the scenarios and assumptions of the study, going as little as 10% over budget would make nuclear noncompetitive.
The big factors affecting cost are the amount of time nuclear plants take to build, gas prices, carbon prices and interest rates.
"If gas prices are not high enough (one possibility is the large supply of shale gas), carbon prices are not high enough (because of loose carbon targets, or competitiveness concerns), interest rates are higher (either global, or due to a risk premium for nuclear), or there are significant delays in construction times (as experienced before), then, even without cost overruns, nuclear would not be competitive, sometimes by a large margin," Linares writes.
The long construction duration contributed greatly to nuclear power plant costs in the 1970s and 1980s, Parson says: “We built a lot of our nuclear plants in the U.S. with designs that were specific to each location, so instead of a standardized design that got reproduced each time, we had a specialized design each time.” This meant a lot of mistakes and revisions, resulting in a loss of efficiency.
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G.R.L. Cowan "Fortunately,
G.R.L. Cowan
"Fortunately, no neighbour of a nuclear power plant has ever been harmed by nuclear waste, nor by a meltdown, and no such power plant has ever been involved in nuclear weapon proliferation."
I'm sorry, but that isn't very reassuring. So why are we worried about Iran and it's nuclear energy program? Now imagine countries all over the world building thousands of nuclear power plants, and see how many Irans you have.
The fact that we have had only one near miss at three mile island and one actual meltdown in the Ukraine (which did do harm) is not a very convincing argument. Not when a meltdown, even if a longshot, is an unthinkable catastrophe.
Argonne national lab says that an airliner crashing into a nuclear power plant could cause a complete meltdown, even without cracking the containment building. Think the twin towers was bad?
Just look at the petroleum industry if you want an idea of how often human errors can cause catastrophic environmental damage. There were three big oil spills last year alone. So convince me that there will be no such human error with nuclear power.
And who is going to monitor all the radioactive waste (which can be used in dirty bombs) and nuclear fuel on a global basis? You have more faith in man than me, and I have quite a bit.
"I really don’t know what they mean by non-competitive. None of the alternative power sources such as wind or solar would last a minute without substantial government subsidies, feed-in tariffs and Renewable Portfolio Standards"
Two commentors here have mentioned the subsidies needed in the short term for solar and wind, but fail to acknowledge the huge subsidies to fossil fuels or that nuclear energy also was subsidized.
Oil has been subsidized since 1918 and coal since 1932. I assure you, solar PV will not need subsidies anywhere near as long as that. Costs are dropping dramatically, 50% this year alone for solar modules. The price of refined polysilicon has fallen from 500/kg to about 50/kg in just a few years. The non competitiveness refers to the future, the not very distant future.
According to a report by the Western Governors Association, the solar thermal industry could build 13 gigwatts of capacity by 2015. They said that when there are 4 gigawatts of installed units, the price would be below 10 cents/kWh. The report also said that 300 gigawatts of solar thermal could be built near existing transmission lines in the southwest.
The first few plants will be expensive according to the NREL, with costs falling rapidly after that.
Prices are projected to fall, as the industry gets up to scale, to 5-8 cents/kWh
The California deserts alone have a potential for 360 GW of solar thermal, just using very flat land and avoiding environmentally sensitive areas. For comparison, California now generates
58 GW from all energy sources. source: NREL
Alej
"Nuclear plants use far less than 1 square mile (640 acres). "
Not including the mining, refining or waste disposal.
Renewables will never need any fuel, ever. No fuel to prospect for, mine, refine, transport, store, protect with military power. No fuel to burn or clean up the pollution or waste from, and no fuel to fight wars over. And no fuel price fluctuations. No fuel to import.
"Thermal requires a cooling infrastructure similar to a nuclear plant"
Not true. Solar thermal can be air cooled or cooled using a closed loop system. Furthermore, the process of cooling with water can provide usable hot water and seawater desalinization.
Solar thermal with heat storage can have a 65% capacity factor, not the 25% -33% you quote. And as Joseph Romm points out, CSP's heat storage is far more efficient and cost effective than storing electricity.
There is also a good argument that the dispatchable power from CSP is in some ways more valuable than the base load power form nuclear or coal. With it, it would be easier to integrate and balance the intermittent energy from PV and wind, than it is with base load. See here:
http://www.altenergystocks.com/archives/2009/04/why_csp_should_not_try_t...
A company in Canada says they can build solar thermal plants that produce 4 times the power at half the cost of existing technology. See here:
http://social.csptoday.com/qa/breaking-heat-barrier-shec-energys-red-hot...
The arguments about wind and solar being useless because they are intermittent are both tired and wrong. talking points. We have maybe 1% wind energy and far less than that for PV solar in the U.S. and yet, we hear constantly how they can't work because they are intermittent. Spain has 11% wind power, Denmark 20%. Yes, Denmark has to trade wind power for base load from Germany to make it work, but they are a tiny country compared with the U.S., where there is huge potential for both solar and wind, and other renewables and a more diverse power grid. Combine the intermittent power from wind and PV with the steady dispatchable day and night power from CSP with heat storage, and you have a big chunk of our energy needs met.
The U.S. built 18.2 GW of wind power in the past two years. Giving wind a capacity factor of 30%, you have the equivalent of 5.5 nuclear power plants of 1 GW each, built in two years. at 25% it works out to 4.5 GW at 100% capacity factor.
" and no such power plant has ever been involved in nuclear weapon proliferation."
Really?
"Most notorious among them was A.Q. Khan who stole uranium enrichment technology from a civilian establishment in Holland; his effort ensured Pakistan’s success in developing its first nuclear weapons. Kahn then went on to sell the technology to other countries, including Iran, Iraq, Libya and North Korea. But apart from the American, Russian and Chinese programs, every other effort to develop nuclear weapons, including in Britain and France, benefited from the advent of civilian nuclear energy because of the cover it provided as well as the access to nuclear fuel, equipment and technology"
http://solveclimate.com/blog/20090817/nuclear-energy-white-knight-or-dan...
Most of the cost can be axed
Most of the cost can be axed by using science based licensing and construction requirements. The current codes were written by anti nuclear activists with the specific and open purpose of making nuclear power uneconomical. The current anti science regulations were designed to create the problem you describe in this article.
Nuclear would instantly become the cheapest form of electrical generation with straight forward, science based regulations.
Lets talk Nuclear Turkey
I really thought this article was going to be some more fear mongering b*llsh*t from the crazy anti-nukes. When the author of the article in her opening statement said nuclear power is known “for its...history of dangerous meltdowns” I thought here we go again. However, I was pleasantly surprised that the author actual used academic studies to back up her ideas. This is very refreshing. So many times you read an anti-nuclear article that rely on outright fear mongering and lies to make there points. It is nice to see the other side use science. It is something all pro nuclear activists are waiting for an energy debate based on science over that of fear.
The problem I did have with the article was the studies she relied on to make her point. This being said I did like the MIT study by John Parsons The Future of Nuclear Power. I really liked how she used this study to tie together her entire article and to supply relevant background information. I am not hundred percent supporter of John Parsons The Future of Nuclear Power study but in all I thought the paper was for the most part an accurate take on nuclear powers future in America.
I am not a big fan of the two other studies she sighted. It is from these two others studies where I felt a bias in her article appeared. First, the Benjamin K. Sovacool study( if that is what one would call this atrocity of scientific reasoning) which asserts “…for every dollar you spend on nuclear, you could have saved five or six times as much carbon with efficiency, or wind farms,.." is absolute hogwash. This study does not take into account the inefficiency of wind and solar. To start the best wind mills in the greatest locations only run at 30% efficiency and the best card board size solar panel can only light a few light bulbs. But what is worse is that solar and wind are not base load technologies. When they are not running which is often the case you must have separate carbon producing natural gas burning power plants to back them up or the electrical grid collapses. It is time people realize that with large scale production of solar and wind you must have large scale carbon producing natural gas plants to back them up.
However, it is true that the nuclear industry could do better at reducing their limited CO2 emissions. From mining the Uranium to building the nuclear plant all the way through to decommissioning the nuclear industry can, should, and will become more efficient at managing their Co2 emissions. I am sure when we as an industry do this we will find the savings more than out way the measures we will take to combat this wastefulness.
The final study and probably the most important one is the new study done in Spain by Pedro Linares and Adela Conchado. This study has some glaring problems. In fact the authors emit as much when they state that they can not price in an adequate price on a future carbon tax or what value nuclear power will have in a cap and trade system. There estimates I feel are on the low side like their estimate of 1% annual growth in electrical demand. They also must not have much faith GM’s Volt. LOL
The main problem I have with this Spanish study is it does not take into account the advantage time gives to the overall cost of a nuclear power plant. The study emits that the cost of running the plant and fueling is only 30% of the overall cost of a new nuclear power plant. In fact this number drops the longer you run a nuclear plant. It is not unrealistic to think that a new nuclear power plant will run for 100 years plus. So if the study would adapt their cost benefit analysis based on 50 years they would find the cost of nuclear is cheaper than today’s coal and falls at the same price per kilowatt as a 50 year old hydro plant. Nuclear however only uses just one square mile of space. Compare this to the space Lake Powel uses and you will see there is a cost saving in land use that makes nuclear the least expensive power source our world has to offer. I know I went on for awhile my friends so I have only one thing left to say and that is:
Viva the Nuclear Renaissance,
Jfarmer9
I would like to add a few
I would like to add a few things to what you said JFarmer9. Nuclear plants use far less than 1 square mile (640 acres). Depending upon the cooling requirements, such as the need for a cooling tower, location next to a lake, river or ocean, their size may vary from 50 acres/1000MW to several hundred acres/ 1000 MWs. The newer and larger wind turbines will require from 1-2 acres/MW and this includes the concrete pad, a construction pad and a substantial road that connects the machines. Solar varies from about 5-10 acres/MW depending upon whether the project is thermal or photovoltaic. Thermal requires a cooling infrastructure similar to a nuclear plant. If you consider the acreage required by energy produced then triple or quadruple the requirements of solar and wind (25-33% capacity factor) and add ten percent to the nuclear plant acreage.
I haven’t seen the studies you mention but did any of them mention that the wind turbines being installed now have a life expectancy of 10-20 years while the newer nuclear plants should last at least 60 years and perhaps longer?
I really don’t know what they mean by “non-competitive”. None of the alternative power sources such as wind or solar would last a minute without substantial government subsidies, feed-in tariffs and Renewable Portfolio Standards. In 2008 Arizona State University completed a study that estimated the costs of nuclear power at 60-70 USD per Mwh compared to solar’s 270 USD/Mwh. They didn’t make a comparison with wind power as that is not much of an option in the state of Arizona. Most of the wind-nuclear studies that I have seen estimate wind at 2x the cost that of nuclear. Of course that is without all the subsidies and all the other goodies.
Alej
Solving climate means reducing gov't natgas income
Nuclear energy's existing contribution to solving climate is taking billions of dollars out of the natural gas interests' pockets every week. Unfortunately, these natural gas interests include government.
That means essays that you have the best chance of getting paid to write are likely to be the least helpful in addressing the problem.
The lengthy, often-delayed-by-government nuclear plant construction history Shin mentions occurred when no loan guarantees were in effect. If government is forced to guarantee nuclear construction loans, the money it might make on natural gas, if it red-tapes the projects to death, it will have to hand over to the projects' creditors. This makes it easier for it to do the right thing, and let them be built.
Fortunately, no neighbour of a nuclear power plant has ever been harmed by nuclear waste, nor by a meltdown, and no such power plant has ever been involved in nuclear weapon proliferation. All of those supposed concerns are just fossil fuel money talking.
--- G.R.L. Cowan
(How fire can be domesticated:
http://www.eagle.ca/~gcowan/ )
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