Posted by Big Gav in nuclear power
The SMH has a look at the economics of nuclear power - Nuclear economics just don't add up.
In Europe there are two nuclear plants under construction, one in Flamanville, France and one in Olkiluoto, Finland both by France's state-owned Areva. Both have been subject to significant troubles, partly related to being the first-build of the most evolved advanced model in production, Areva's EPR, which was supposed to be simpler, more efficient, cheaper and faster to build. In Finland's Olkiluotu a 50 per cent blowout in costs (to $US6.4 billion so far, lawsuits pending) and doubling in construction time (from 3.5 years to at least seven years) is typical of nuclear projects over the decades. Today Areva concede that construction of a similar reactor of 1.6 gigawatts would be $US8 billion ($A9 billion).
The reasons why nuclear plants routinely run into such troubles are that it is hugely capital intensive so delays greatly add to the cost of capital long before any revenue is generated. Construction is extremely complex, which is greatly compounded by safety regulation — this was another major cause of the slowdown at Olkiluoto. For these reasons the industry prefers to use "overnight" costs, which are the costs as if a plant was constructed overnight at today's prices.
Dr Ziggy Switkowski, chairman of the Australian Nuclear Science and Technology Organisation (ANSTO), has said that Australia should build 50 reactors though this assumes a doubling of electricity consumption by 2050. Dr Ian Smith suggested, when chief executive of ANSTO in 2008, that Australia could realistically construct six to 14 plants but this would still provide only 10-20 per cent of total electricity requirements.
Australia's current electricity consumption is almost 40 gigawatts from installed capacity of about 50 gigawatts. So, to replace most of this would require about 25 reactors of the EPR design, each of 1.6 gigawatts (or 40 of the Westinghouse AP1000 1 gigawatt design). This could cost about $225 billion in today's money, or close to half a trillion dollars for 50 reactors. Using Smith's more modest suggestions the cost could be up to $126 billion but displace a lot less coal burning. Switkowski may be correct in the sense that why create all these contentious issues and still not substantially solve the problem? This points to another weakness: with nuclear it appears to be an all-or-nothing gamble with hundreds of billions of dollars.
Nuclear advocates always cite "next-gen" designs and purported much swifter and cheaper construction but the figures given above are the actual costs of the plants being constructed in Europe today, not even the much higher industry estimates reported by Grunwald for the proposed US plants. The timetable of this construction is anyone's guess except that history warns us to be pessimistic. By comparison China plans for 50-60 of the simpler, smaller Westinghouse design by 2030, but nuclear will still account for only about 4 per cent of their energy needs.
Those are just the construction costs. As is well known, liability insurance needs to be covered by government. The other big cost is the decommissioning of reactors. Even with many of the world's 439 existing reactors approaching the end of their productive lives, so far none have been decommissioned. The world's first commercial nuclear power generator, Calder Hall at what is now called Sellafield (previously Windscale), was turned off in 2003. It has been estimated by the UK industry that full decommissioning of Calder Hall, if ever done, will cost about $2 billion at today's prices. Meanwhile, old plants need continuous maintenance and high-security against decay and incursion including against potential terrorists.
But the biggest cost, especially for Australia, could be the opportunity cost of throwing these vast sums into an old technology dominated by other countries, rather than investing in new renewable technologies and industries of the future. From relatively modest funding Australia has already produced world-beating solar-photovoltaic and solar-thermal technologies, even if both have moved offshore due to lack of investment support. Geothermal power has just received government grants, which will allow full prototypes to be tested in a few years. Many scientists believe that it is inevitable that these technologies will be viable, provide so-called baseload power cost-competitively, and that their maturation would be faster than the typical construction schedules of nuclear power stations if comparable budgets and subsidies were deployed.
Is this any different to the claims by the nuclear dreamers such as Brook and Nicholson? Emphatically yes. The nuclear industry is not a new one but an old mature one. For more than 50 years it has consistently over-promised and under-delivered, yet its advocates continue to propose that governments should provide massive subsidies to nuclear construction, provide unlimited liability insurance, assume most of the decommissioning costs and — after 50 years — continue to search for the elusive "permanent" storage of high-level waste.
There are not minority views and indeed are not contested by the nuclear industry, or the Wall Street Journal, or Lazards the merchant bank. Or many scientists. Here is commentary from the world's top science journal Nature (W.Patterson, Vol 449, 11/10/07): "As climate and fuel security dominate the energy agenda, the battle between traditional and innovative electricity intensifies around the world, notably in fast-growing economies such as China. After half a century, nuclear power is the ultimate in tradition. It needs climate more than climate needs it. To avert catastrophic global warming, why pick the slowest, most expensive, most limited, most inflexible and riskiest option? In 1957, despite the Windscale fire, nuclear power was worth trying. We tried it: its weakness proved to be economics, not safety. Now nuclear generation is just an impediment to sustainable electricity."
It is a clear enough choice. The economics and the long time to approve and build show nuclear is not the smart choice, arguably for the world but certainly not for Australia with its plentiful resources in renewables (solar, wind, wave, tidal, geothermal).
The real question for Australia is whether we have what it takes to grasp the opportunities.