Reports of nuclear Renaissance were greatly exaggerated; efficiency is 10 times cheaper today, renewables “costs are dropping fast”
Even before the earthquake-tsunami one-two punch, the endlessly hyped U.S. nuclear revival was stumbling, pummeled by skyrocketing costs, stagnant demand and skittish investors, not to mention the defeat of restrictions on carbon that could have mitigated nuclear energy’s economic insanity. Obama has offered unprecedented aid to an industry that already enjoyed cradle-to-grave subsidies, and the antispending GOP has clamored for even more largesse. But Wall Street hates nukes as much as K Street loves them, which is why there’s no new reactor construction to freeze. Once hailed as “too cheap to meter,” nuclear fission turns out to be an outlandishly expensive method of generating juice for our Xboxes.
Since 2008, proposed reactors have been quietly scrapped or suspended in at least nine states “” not by safety concerns or hippie sit-ins but by financial realities. Other projects have been delayed as cost estimates have tripled toward $10 billion a reactor, and ratings agencies have downgraded utilities with atomic ambitions. Nuclear Energy Institute vice president Richard Myers notes that the “unrealistic” renaissance hype has come from the industry’s friends, not the industry itself. “Even before this happened, short-term market conditions were bleak,” he tells TIME.
I’ve been arguing for a long time that there was no nuclear Renaissance, that the industry ad failed to get its act in order and had priced itself out of the market (see my 2008 analysis, “The Self-Limiting Future of Nuclear Power“). Then back in October, Exelon CEO John Rowe explained that Low gas prices and no carbon price push back nuclear renaissance a “decade, maybe two.”
In short, nuclear power has gone from “too cheap to meter” to “too costly to matter” (see Exclusive analysis, Part 1: The staggering cost of new nuclear power).
The meltdown in Japan pulled back the veil on the grim underlying economics of nuclear power and certainly killed the myth that we can afford to skimp on review, oversight, and safety in an effort to save money.
In a must-read piece, “The Real Cost of Nuclear Power” (quoted above), Time explains what CP readers have known for years:
Around the world, governments (led by China, with Russia a distant second) are financing 65 new reactors through more explicit nuclear socialism. But private capital still considers atomic energy radioactive, gravitating instead toward natural gas and renewables, whose costs are dropping fast. Nuclear power is expanding only in places where taxpayers and ratepayers can be compelled to foot the bill.
In fact, the economic and safety problems associated with nuclear energy are not unrelated. Trying to avoid flukes like Fukushima Daiichi is remarkably costly. And trying to avoid those costs can lead to flukes.
The False Dawn
In 1972 a federal safety regulator, worried that GE’s Mark 1 reactors would fail in an emergency, urged a ban on containment designs that used “pressure suppression.” His boss was sympathetic but wrote in a memo that “reversal of this hallowed policy, particularly at this time, could well be the end of nuclear power” and “would generally create more turmoil than I can stand thinking about.” Four decades after this bureaucratic pressure suppression, Fukushima Daiichi’s Mark 1 reactors seem to have failed as predicted. And while newer reactors don’t have those problems, 23 Mark 1 reactors still operate in the U.S., including a Vermont plant that was relicensed for 20 more years the day before the disaster in Japan.
As Richard Caperton and I wrote last Monday for CNN: New reactors are intrinsically expensive because they must be able to withstand virtually any risk that we can imagine, including human error and major disasters. Why? Because when the potential result of a disaster is the poisoning “” and ultimately, death “” of thousands of people, even the most remote threats must be eliminated.
Time perhaps oversells the degree to which left wingers bought into the nuclear revival — “Left-wingers who used to bemoan the industry’s radioactive waste and corporate welfare now embrace it as an earth saver” — although a handful clearly did.
But there is no escaping the economics:
Nevertheless, investors refuse to bet on nukes. The steady increases in electricity demand that were supposed to justify new reactors have been wiped out by the global recession, and energy-efficiency advances could keep demand flat. Natural gas prices have plummeted, Congress appears unlikely to put a price on carbon, and the U.S. still lacks a plan for nuclear waste. It also turns out that building safe places to smash atoms is hard, especially after such a long hiatus. The U.S. has lost most of its nuclear manufacturing capacity; it would have to import Japanese steel forgings and other massive components, while training a new generation of nuclear workers. And though industry lobbyists have persuaded the NRC to ease onerous regulations governing everything from fire safety to cooling systems, it’s still incredibly tough to get a reactor built.
New nukes would still make sense if they were truly needed to save the planet. But as a Brattle Group paper noted last month, additional reactors “cannot be expected to contribute significantly to U.S. carbon emission reduction goals prior to 2030.” By contrast, investments in more-efficient buildings and factories can reduce demand now, at a tenth the cost of new nuclear supply. Replacing carbon-belching coal with cleaner gas, emissions-free wind and even utility-scale solar will also be cheaper and faster than new nukes. It’s true that major infusions of intermittent wind and solar power would stress the grid, but that’s a reason to upgrade the grid, not to waste time and money on reactors.
I have previously noted that nukes have gotten so expensive they may become troubled assets and ruin credit ratings. Time notes with some irony:
Anyway, there aren’t many utilities that can carry a nuclear project on their balance sheets, which is why Obama’s Energy Department, a year after awarding its first $8 billion loan guarantee in Georgia, is still sitting on an additional $10 billion. A Maryland project evaporated before closing, and a Texas project fell apart when costs spiraled and a local utility withdrew. The deal was supposed to be salvaged with financing from a foreign utility, but that now seems unlikely.
The utility was Tokyo Electric.
The bottom line in that nuclear power is wildly expensive — see Nuclear Bombshell: $26 Billion cost “” $10,800 per kilowatt! “” killed Ontario nuclear bid — and its not going to get cheaper (unlike renewables).
The industry’s defenders may ignore Fukushima Daiichi, but the industry will not. It’s serious about public safety, and meltdowns are bad for business; no company wants to lose a $10 billion reactor overnight. But additional safety measures cost money: in 2003 industry lobbyists beat back an NRC committee’s recommendation for new backup-power rules that were designed to prevent the hydrogen explosions that are now all over the news.
It may sound unrealistic to require plants to withstand a vicious earthquake and a 25-ft. tsunami, but nobody’s forcing utilities to generate power with uranium. One lesson of the past decade, in finance as well as nature, is that perfect storms do happen. When nukes are involved, the fallout can be literal, not just political.
And that’s not just a U.S. view. In Germany, the Conservative Die Welt writes:
Chernobyl was a special case. Nuclear energy was viewed with suspicion but it was accepted as long as modern democracies harnessed it with security precautions.
That is over now. Faith in redundant, coincidence-proof security precautions has been wiped out by Fukushima. The high-tech democracy Japan has shown what could happen if an Internet attack on German or French nuclear reactors were to happen as it did with the ‘Stuxnet’ program against the Iranian nuclear program. Or if a determined, technologically skilled terrorist group were to seize control of a power station. One knew it before. Seeing it has made the difference.”
So the Renaissance that never was is over. Now we need to focus on the serious job of reducing greenhouse gas emissions quickly and cost-effectively — see “With new nuclear power on pause, here’s a practical, affordable (and safe) clean electricity plan.”
- GOP wants 100 new nukes by 2030 while “Areva has acknowledged that the cost of a new reactor today would be as much as 6 billion euros, or $8 billion, double the price offered to the Finns.”
- CNN opinion: Japan and future of U.S. nuclear power, “The U.S. government and nuclear industry must take new actions to ensure that nuclear power is safe for the American public.”
- Energy’s greatest health risk comes from fossil fuels “” precisely why we need to hit the pause button on nuclear power