The staggering cost of new nuclear power  

Joe Romm at Climate Progress has a look at "energy too expensive to matter" (as The Economist once dubbed it) - that purveyed by the nuclear power industry, with its begging bowl held ever outwards looking for government guarantees and handouts - The staggering cost of new nuclear power.

A new study puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

This staggering price is far higher than the cost of a variety of carbon-free renewable power sources available today — and ten times the cost of energy efficiency (see “Is 450 ppm possible? Part 5: Old coal’s out, can’t wait for new nukes, so what do we do NOW?“).

The new study, Business Risks and Costs of New Nuclear Power, is one of the most detailed cost analyses publically available on the current generation of nuclear power plants being considered in this country. It is by a leading expert in power plant costs, Craig A. Severance. A practicing CPA, Severance is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission.

This important new analysis is being published by Climate Progress because it fills a critical gap in the current debate over nuclear power — transparency. Severance explains:

All assumptions, and methods of calculation are clearly stated. The piece is a deliberate effort to demystify the entire process, so that anyone reading it (including non-technical readers) can develop a clear understanding of how total generation costs per kWh come together.

As stunning as this new, detailed cost estimate is, it should not come as a total surprise. I detailed the escalating capital costs of nuclear power in my May 2008 report, “The Self-Limiting Future of Nuclear Power.” And in a story last week on nuclear power’s supposed comeback, Time magazine notes that nuclear plants’ capital costs are “out of control,” concluding:

Most efficiency improvements have been priced at 1¢ to 3¢ per kilowatt-hour, while new nuclear energy is on track to cost 15¢ to 20¢ per kilowatt-hour. And no nuclear plant has ever been completed on budget.

Time buried that in the penultimate paragraph of the story!

Yet even Time’s rough estimate is too low, as Business Risks and Costs of New Nuclear Power quantifies in detail. Here is the Executive Summary:

It has been an entire generation since nuclear power was seriously considered as an energy option in the U.S. It seems to have been forgotten that the reason U.S. utilities stopped ordering nuclear power plants was their conclusion that nuclear power’s business risks and costs proved excessive.

With global warming concerns now taking traditional coal plants off the table, U.S. utilities are risk averse to rely solely on natural gas for new generation. Many U.S. utilities are diversifying through a combination of aggressive load reduction incentives to customers, better grid management, and a mixture of renewable energy sources supplying zero-fuel-cost kWh’s, backed by the KW capacity of natural gas turbines where needed. Some U.S. utilities, primarily in the South, often have less aggressive load reduction programs, and view their region as deficient in renewable energy resources. These utilities are now exploring new nuclear power.

Estimates for new nuclear power place these facilities among the costliest private projects ever undertaken. Utilities promoting new nuclear power assert it is their least costly option. However, independent studies have concluded new nuclear power is not economically competitive.

Given this discrepancy, nuclear’s history of cost overruns, and the fact new generation designs have never been constructed any where, there is a major business risk nuclear power will be more costly than projected. Recent construction cost estimates imply capital costs/kWh (not counting operation or fuel costs) from 17-22 cents/kWh when the nuclear facilities come on-line. Another major business risk is nuclear’s history of construction delays. Delays would run costs higher, risking funding shortfalls. The strain on cash flow is expected to degrade credit ratings.

Generation costs/kWh for new nuclear (including fuel & O&M but not distribution to customers) are likely to be from 25 - 30 cents/kWh. This high cost may destroy the very demand the plant was built to serve. High electric rates may seriously impact utility customers and make nuclear utilities’ service areas noncompetitive with other regions of the U.S. which are developing lower-cost electricity.

Given the myriad low-carbon, much-lower-cost alternatives to nuclear power available today — such as efficiency, wind, solar thermal baseload, solar PV, geothermal, and recycled energy (see “An introduction to the core climate solutions“) — the burden is on the nuclear industry to provide its own detailed, public cost estimates that it is prepared to stand behind in public utility commission hearings.

Florida Power & Light has gone so far as to endorse nuclear power as a source of renewable energy. So, one way to tell if your policy maker is a Chernobyl zombie, their greenwash glows.

Such energy policy makers argue that one is naive to think that we could supplant a substantial portion of traditional power sources with renewable energy sources. For example, Triple Pundit opines that “only a fool would believe we could transition our energy infrastructure over the course of one presidential term.”

Yet, Triple Pundit further states:

And only a bigger fool would seek to stall progress by arguing this transition will be too difficult to integrate, and is therefor not worth doing. Especially when you consider the fact that almost all of our power needs can be generated from renewable energy resources.

And, it is an even more important clarification, since 8 years of Bush have left us desperately fighting to save the planet from catastrophic 5-7°C warming by 2100. With much higher global emissions than 8 years ago, and a lost decade of inefficient, polluting infrastructure built at a cost of many trillions of dollars, we now have much less time.

Furthermore, nuclear power plants have a long lead time from planning to power production and are capital intensive (at a time when capital funding is dwindling). OTOH, true renewable energy sources like wind, solar and geothermal can be brought on line in less time and with less capital outlay.

Pollution from another fuel from below ground, to include radioactive waste, presents more of a clear and present danger.