Copyright © 2008 Earth Policy
Institute
Lester R. Brown
Over the last few years the nuclear industry has used
concerns about climate change to argue for a nuclear revival. Although
industry representatives may have convinced some political leaders that this
is a good idea, there is little evidence of private capital investing in
nuclear plants in competitive electricity markets. The reason is simple:
nuclear power is uneconomical.
In an excellent recent analysis, “The Nuclear Illusion,” Amory B. Lovins and
Imran Sheikh put the cost of electricity from a new nuclear power plant at
14¢ per kilowatt hour and that from a wind farm at 7¢ per kilowatt hour.
This comparison includes the costs of fuel, capital, operations and
maintenance, and transmission and distribution. It does not include the
additional costs for nuclear of disposing of waste, insuring plants against
an accident, and decommissioning the plants when they wear out. Given this
huge gap, the so-called nuclear revival can succeed only by unloading these
costs onto taxpayers. If all the costs of generating nuclear electricity are
included in the price to consumers, nuclear power is dead in the water.
To get a sense of the costs of nuclear waste disposal, we need not look
beyond the United States, which leads the world with 101,000 megawatts of
nuclear-generating capacity (compared with 63,000 megawatts in second-ranked
France). The United States proposes to store the radioactive waste from its
104 nuclear power reactors in the Yucca Mountain nuclear waste repository,
roughly 90 miles northwest of Las Vegas, Nevada. The cost of this
repository, originally estimated at $58 billion in 2001, climbed to $96
billion by 2008. This comes to a staggering $923 million per reactor—almost
$1 billion each—assuming no further repository cost increases. (See
data).
In addition to being over budget, the repository is 19 years behind
schedule. Originally slated to start accepting waste in 1998, it is now set
to do so in 2017, assuming it clears all remaining hurdles. This leaves
nuclear waste in storage in 121 temporary facilities in 39 states—sites that
are vulnerable both to leakage and to terrorist attacks.
One of the risks of nuclear power is a catastrophic accident like the one at
Chernobyl in Russia. The Price-Anderson Act, first enacted by Congress in
1957, shelters U.S. utilities with nuclear power plants from the cost of
such an accident. Under the act, utilities are required to maintain private
accident insurance of $300 million per reactor—the maximum the insurance
industry will provide. In the event of a catastrophic accident, every
nuclear utility would be required to contribute up to $95.8 million for each
licensed reactor to a pool to help cover the accident’s cost.
The collective cap on nuclear operator liability is $10.2 billion. This
compares with an estimate by Sandia National Laboratory that a worst-case
accident could cost $700 billion, a sum equal to the recent U.S. financial
bailout. So anything above $10.2 billion would be covered by taxpayers.
Another huge cost of nuclear power involves decommissioning the plants when
they wear out. A 2004 International Atomic Energy Agency report estimates
the decommissioning cost per reactor at $250–500 million, excluding the cost
of removing and disposing of the spent nuclear fuel. But recent estimates
show that for some reactors, such as the U.K. Magnox reactors that have high
decommissioning waste volumes, decommissioning costs can reach $1.8 billion
per reactor.
In addition to the costs just cited, the industry must cope with rising
construction and fuel expenses. Two years ago, building a 1,500-megawatt
nuclear plant was estimated to cost $2–4 billion. As of late 2008, that
figure had climbed past $7 billion, reflecting primarily the scarcity of
essential engineering and construction skills in a fading industry.
Nuclear fuel costs have risen even more rapidly. At the beginning of this
decade uranium cost roughly $10 per pound. Today it costs more than $60 per
pound. The higher uranium price reflects the need to move to ever deeper
mines, which increases the energy needed to extract the ore, and the shift
to lower-grade ore. In the United States in the late 1950s, for example,
uranium ore contained roughly 0.28 percent uranium oxide. By the 1990s, it
had dropped to 0.09 percent. This means, of course, that the cost of mining
larger quantities of ore, and that of getting it from deeper mines, ensures
even higher future costs of nuclear fuel.
Few nuclear power plants are being built in countries with competitive
electricity markets. The reason is simple. Nuclear cannot compete with other
electricity sources. This explains why nuclear plant construction is now
concentrated in countries like Russia and China where nuclear development is
state-controlled. The high cost of nuclear power also explains why so few
plants are being built compared with a generation ago.
In an illuminating article in the Bulletin of the Atomic Scientists,
nuclear consultant Mycle Schneider projects an imminent decline in world
nuclear generating capacity. He notes there are currently 439 operating
reactors worldwide. To date, 119 reactors have been closed, at an average
age of 22 years. If we generously assume a much longer average lifespan of
40 years, then 93 reactors will close between 2008 and 2015. Another 192
will close between 2016 and 2025. And the remaining 154 will close after
2025.
But only 36 nuclear reactors are currently under construction worldwide—31
of them in Eastern Europe and Asia. Although there is much talk of building
new nuclear plants in the United States, there are none under construction.
What these numbers indicate, Schneider points out, is that plant closings
will soon exceed plant openings—and by a widening margin in the years ahead.
The trend is clear. From 2000 to 2005, an average of 4,000 megawatts of
nuclear generating capacity was added each year. Since 2005, this has
dropped to only 1,000 megawatts of additional capacity per year.
Even if all reactors scheduled to come online by 2015 make it, the projected
closing of 93 nuclear reactors by then will drop nuclear power generation
roughly 10 percent below the current level. Unless governments start
routinely granting operating permits for reactors more than 40 years old, a
half-century of growth in world nuclear generating capacity is about to be
replaced by a long-term decline.
Despite all the industry hype about a nuclear future, private investors are
openly skeptical. In fact, while little private capital is going into
nuclear power, investors are pouring tens of billions of dollars into wind
farms each year. And while the world’s nuclear generating capacity is
estimated to expand by only 1,000 megawatts this year, wind generating
capacity will likely grow by 30,000 megawatts. In addition, solar cell
installations and the construction of solar thermal and geothermal power
plants are all growing by leaps and bounds.
The reason for this extraordinary gap between the construction of nuclear
power plants and wind farms is simple: wind is much more attractive
economically. Wind yields more energy, more jobs, and more carbon reduction
per dollar invested than nuclear. Though nuclear power plants are still
being built in some countries and governments are talking them up in others,
the reality is that we are entering the age of wind, solar, and geothermal
energy.
Copyright ©
2008 Earth Policy Institute
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