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.
Licensing issues also drew out construction. "In the past, those were two separate licenses," says Parsons. "You would get a license to start construction and finish building, but at that point, you would need to apply for a new license to operate the plant – which created a lot of opportunity for these political fights to delay you after you had sunk your money but before you could turn it on and see any revenue."
The Nuclear Regulatory Commission is working on instituting new policies to address these issues. One is the creation of a license for a standardized design to expedite the application and construction process. Another, finalized in the past year, is a combined construction and operating license, which minimizes the delay between constructing and operating a plant.
A national carbon price, in the form of a future cap-and-trade system, will also influence nuclear energy's cost.
"Putting a price on carbon is probably one of the most important things to make it likely that nuclear will go forward," says Parsons. "Without a price on carbon, our numbers show that nuclear may not be the most inexpensive form of baseload electricity. But with the carbon price, it becomes competitive if nuclear can reverse its past history of construction problems."
Nuclear energy is often touted as non-carbon-emitting, although that is only true for the operation of an already-built nuclear plant. The construction of nuclear plants and the mining and processing of uranium ore mean that carbon dioxide is emitted before the plant begins operation.
A 2008 study calculated all the emissions associated with nuclear power and determined that nuclear energy is relatively clean compared to coal and natural gas-fired plants, but it is still two and six times higher than solar and wind, respectively. "So for every dollar you spend on nuclear, you could have saved five or six times as much carbon with efficiency, or wind farms," said the study's author, Benjamin K. Sovacool.
Under a cap-and-trade system, nuclear energy would be much more cost-competitive against coal and natural gas, though, two of the cheapest forms of electricity generation today. And unlike current wind and solar operations, it could serve as a baseload power source.
Parsons says that several factors mean that nuclear energy may soon see a renaissance:
First, fossil fuel prices are higher.
Second, the operating performance of American nuclear plants has improved, making them more economically efficient and safe. "You can see the results in that because when a number of nuclear plants came to the end of their licenses, they would normally have been decommissioned," says Parsons, "but the companies applied to extend their license. And for many of the plants, the companies invested money in expanding its capacity."
Third, worries about climate change have made people take a renewed interest in this cleaner-than-coal energy source. "Many people who were not interested in it before and many environmentalists who would have looked at it askance are giving it a fresh look because they are very, very worried about climate change," says Parsons.
Whether nuclear energy actually takes off is anyone's guess.
"We're in an in-between time right now," says Parsons. "We've made a lot of changes that ought to make this possible, but we haven't been able to follow through to prove that nuclear is an alternative that can make a big contribution. We're watching that happen right now. The answer is not yet in."
(Photo: Construction at Olkiluoto by Greenpeace/Nick Cobbing)