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Stunner: New Nuclear Costs as Much as German Solar Power Today — and Up to $0.34/kWh in 2018

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"Stunner: New Nuclear Costs as Much as German Solar Power Today — and Up to $0.34/kWh in 2018"

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The future of nuclear power in addressing climate change is hotly debated. As a reliable form of low-carbon, baseload power, some see it as the only way to bridge to a clean energy future — depending on what your definition of “clean” is. But along with renewed concerns about safety issues after Fukashima, there are two major factors holding back new nukes in market economies that Climate Progress has analyzed repeatedly — Cost and insurability.

In this guest post outlining the rising cost of nuclear, author and renewable energy advocate Paul Gipe shows that solar electricity has become competitive with new nuclear.

The world’s beleaguered nuclear industry continues to take a battering. The “nuclear renaissance” juggernaut that once seemed unstoppable now appears dead in its tracks.

The cabinet of Germany’s conservative government on Monday voted to take the country out of nuclear permanently by 2022. Not to be outdone on the right, the country’s opposition parties say that’s not fast enough.

Bavaria’s conservative party has gone even further and says that while it was first in German nuclear power it will now be first in exiting nuclear. Bavaria, known as the “Texas of Germany” for its conservatism, gets more than 50% of its electricity from nuclear energy.

But it’s the sheer cost of nuclear that may overwhelm any industry “renaissance”.

Little data exists on the actual cost of new nuclear generation. Rumors persist in Ontario, Canada that the government’s delay in building its promised new reactors was due to “sticker shock” after receiving costly proposals.

Whatever the reason for delay, the actual cost of the proposals are being hidden from public view.

Thus, policy discussions are often dependent on studies of nuclear’s cost by organizations with a particular axe to grind.

One exception is the California Energy Commission (CEC), a public agency mandated with the task of periodically examining the costs of various electricity generation technologies that may be used in the state to meet demand.

There are four operating reactors in the state, two each in two locations. There is an addition 900 MW reactor that was decommissioned by the Sacramento Municipal Utility District (SMUD) after a plebiscite on June 7, 1989. California is unlikely ever to build another reactor. State law prohibits construction until a permanent waste repository is available.

Nevertheless, the CEC in its most recent Integrated Energy Policy Report (IEPR) examined the cost of electricity from 21 different central-station generation technologies. Such studies, say the CEC, are useful for comparing the relative costs between technologies. The actual cost of electricity to consumers can be quite different from these hypothetical studies.

The detailed study considered three forms of ownership: Merchant Plant, Investor-Owned Utility (IOU), and Publicly-Owned Utility (POU). Merchant plants are built to serve de-regulated markets and assume a high degree of market risk. They may not be able to sell all their electricity at any one time if their price is too high. Investor-Owned Utilities are the traditional private companies serving a regulated market. In California, Pacific Gas & Electric and Southern California Edison are IOUs. Publicly-Owned Utilities are municipal utilities, like SMUD. Publicly-Owned utilities pay fewer taxes and have access to lower cost financing than either IOUs or merchant plants.

The 186-page report, 2010 Comparative Costs of California Central Station Electricity Generation, found that a 1,000 MW Pressurized Water Reactor would generate electricity in 2018 from as little as $0.17/kWh to as much as $0.34/kWh.

The results of the CEC study are startling. Most renewable technologies today, even solar photovoltaics (solar PV), generate electricity for less than nuclear power in 2018. Only a municipal utility could generate nuclear electricity for less cost than than that of solar PV.

Currently Germany pays as little as $0.31/kWh for electricity from solar PV to as much as $0.41/kWh.

Though industry’s promises of “electricity too cheap to meter” have not materialized for either nuclear power or solar PV, the cost of solar-generated electricity today is equivalent to the cost estimated by the CEC for a nuclear plant beginning operation in 2018. All observers, even critics, expect the cost of solar PV to continue declining during the next decade. If solar PV is cheaper today than nuclear in the future, in all liklihood solar-generated electricity in 2018 will be less costly than that generated by nuclear power if the CEC’s estimates of nuclear costs are accurate.

[CP recently featured a piece that looked at the average construction costs for nuclear reactors in the U.S. and France. This data also suggests that the cost of building nuclear plants has gotten more expensive over time.]


Nuclear Uninsurable

In an unrelated study for the German Renewable Energy Association (Bundesverband Erneuerbare Energie), consultants in Leipzig found that nuclear reactors are effectively uninsurable.

While this has been common knowledge in the energy industry for decades, the question has again been raised in light of the costly disaster in Japan and claims by proponents of a nuclear “renaissance” that the technology is “safe”.

The 157 page report by Versicherungsforen Leipzig estimated that the premium necessary to insure a nuclear reactor from accident would cost from €0.14/kWh ($0.20/kWh) to a staggering €2.36/kWh ($3.40/kWh).

Thus, the cost to insure a nuclear reactor — at a minimum — would cost as much as the electricity itself from a nuclear plant built in California in 2018.

Earlier German studies of the cost for insuring reactors against catastrophic failure found similar results. A 1999 report for the European Commission, ExterneE, on the externalities of energy found that the external cost of nuclear power was €1.80/kWh ($2.59/kWh) largely due to the cost of insurance.

These studies indicate that the cost of nuclear energy is far higher than proponents have led policymakers to believe.

Renewable energy, even costly solar photovoltaics, begins to look like a bargain to consumers when realistic costs of new nuclear plants come to light.

Paul Gipe, Wind-Works

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Below are the earlier comments from the Facebook commenting system:

Climate Portals

Google Earth tool shows proximity of nuclear plants.

http://californiawatch.org​/dailyreport/google-earth-​tool-shows-proximity-nucle​ar-plants-10483

June 6 at 2:56pm

Kees van der Leun

California has a much beter solar resource than Germany (up to double), so PV power cost will be much lower (up to 50%) than in Germany.

June 6 at 7:32pm

James Newberry

Thank you very much Paul. This is astonishing data. Reminds me of Joe’s discussion of the global Ponzi scheme. I’m sure nine out of ten citizens have no idea of the magnitude of this financial fraud (insurance indemnification) promoted by nation-states. I suspect the figures would be similar for fossil fuels and the risk of cryosphere meltdown, that is if we considered our climate necessary for life on Earth. $100 dollars per GALLON is probably closer to full cost accounting.

But hey, who’s counting, except for the unfolding ecologic (and economic) disasters?

· June 6 at 8:15pm

Andrew Starcevic

And how reliable is the supply from solar? Well the Germans aren’t taking any chances. They’re building new coal plants.

June 6 at 8:43pm

Joseph Romm

That comment doesn’t compute.

June 6 at 9:17pm

Gordon Howell

All energy supply systems regardless of whether they supply heat, electricity or motive force need 5 things in order to be functional:
a) reliable energy supply
b) reliable power capacity (very different from energy)
c) reliable storage
d) reliable backup
e) flexible power delivery (and power does not mean :electricity” in the slightest)

The electricity grid as a whole provides all of the above. The grid alone provides d) because it aggregates the risk of failure amongst all generators.

Hydro electricity and electrical energy storage devices provide all of the above except d).
Solar PV electricity and wind electricity provides a) only.
Baseload electricity generators (nuclear-, coal-, natural gas- and oil-fired boilers) provide a), b), and c) but not d) or e).
Natural gas turbines provide a), b), c), and e).

I love what the Germans are doing. They have incredible industrial capacity to develop, commercialise and market products. They are putting themselves between a rock and a hard place in shutting down nuclear. Watch them — they will now have the motivation to develop reliable energy storage devices, which is what is need to provide for solar and wind. They will also look at biomass and geothermal electricity… and then sell all this to the world. They are now embarking on becoming the world’s next energy superpower.

June 7 at 5:07pm

Andrew Starcevic

Yes the Germans have incredible industrial capacity. Their experiment with renewables is exciting. But, like I said, they’re not taking any chances. They’re building 26 new coal fired power plants: http://www.dw-world.de/dw/​article/0,,2396828,00.html

June 8 at 5:16am

Gordon Howell

Hello Andrew: 26… well, yes, as your article of 2007 points out, they were building 26. Let’s see what they say within another 4 years. I see that the wind turbine generator / methane turbine generator combination is likely what we’ll need to be building a massive scales… a great combination of clean energy coupled with firm power (two completely different subjects) — a transition to the future that includes solar PV, solar TE, geothermal, biomass, biogas… the future looks clean. See www.hme.ca/aies for other comments.

· June 9 at 4:33pm

David Lewis

You’re losing all contact with reality. You should take on George Monbiot, author of Heat: How to Stop the World from Burning, a former anti nuclear guy like you, in a debate on the question of why do people opposed to nuclear power have to lie so much if the case is so strong that we shouldn’t use it?

June 7 at 1:05am

Gordon Howell

David, I’d be keen on understanding your comment better re “nuclear power have to lie so much”.

June 7 at 5:09pm

panthael

While nuclear is certainly pricey, and it’s great to see the price of solar dropping, is it really reasonable to try and do an apples to apples comparison on price for a baseload somewhat dispatchable resource versus an intermittent one?

Eventually I hope we can have a conversation about grid parity for renewable/energy storage combos, but that’s a long way away.

June 7 at 5:02am

Mike twotwo

Germany’s 39 “Key Elements of Energy Policy” here http://www.bmwi.de/BMWi/Na​vigation/energie,did=40500​4.html (in German) Google Translate works OK.
Pretty cool.

June 7 at 9:49am

me

Are there english translations available for the report by Versicherungsforen Leipzig?

June 7 at 2:35pm

Stephen Leahy

Different study, similar findings in my IPS May 6 article: Limited Liability – Nuclear Energy’s ‘Mother of all Subsidies’. “Experts estimate the U.S. nuclear industry’s liability cap of 10 billion dollars amounts to “an indirect subsidy of about 33 million dollars per plant per year over the lifetime of a nuclear plant,” according to a study published in Energy Policy in April.

If that 33 million dollars-per-plant-per-year​ indirect subsidy was instead used for loan guarantees for solar panel manufacturing plants, the U.S. would gain 5.3 trillion dollars worth of additional electricity over a 100-year time span, the study reported.”

http://stephenleahy.net/20​11/05/18/limited-liability​-nuclear-energys-mother-of​-all-subsidies/

June 8 at 3:01am

Norm Markosse

The externalized cost of insurance is even more astounding than the 2018 estimated cost of construction per kw/h.

June 8 at 9:32am

 

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