Nuclear power is just too costly
Nuclear: too hot to handle Climate Spectator, Giles Parkinson, 2 August 11, Recent reports about the potential of BHP Billiton to delay uranium production from its massive Olympic Dam project, and Resource Minister Martin Ferguson’s urging of the NSW coalition government to overturn the state’s ban on uranium mining, suggests differing views about the outlook for the nuclear industry.
That the much anticipated “nuclear renaissance” has been stalled – at least in western democracies – appears to be beyond doubt, at least in the short term.
But the medium- to long-term outlook is subject to much conjecture, and seems to depend on how you answer two questions: Who is going to want it? And who is going to pay for it?
In the immediate aftermath of the Fukushima nuclear crisis, we noted that the nuclear industry was unique among energy sources in that it relied on the indulgence of public opinion – unless, of course, you live in a country like China – to be built. This has been borne out by events in Germany and Italy, and the continuing angst in Japan.
But it’s not the only problem – even in those countries where nuclear is supported by the government, the question remains, who is going to pay for them? And it seems clear that the private sector is not.
Advocates for nuclear power in this country like to present the industry as the lowest-cost clean energy alternative to fossil fuels. But this ignores the fact that nuclear plants are massively expensive and involve huge up-front costs, invested well in advance of a commercial return because of the long lead times.
And it is completely dependent on government support. As Citigroup analysts pointed out in a2009 analysis on the economics of the nuclear industry, there hasn’t been a plant in the world built without the relevant government assuming much of the construction, operating and financing risk. There is not a single insurer, banker or construction company in the world that is willing to assume that risk.
France is often cited as the glowing example of low cost nuclear energy, but the French government effectively wrote off the capital investment of its nuclear fleet, meaning that the operating companies such as EdF and GDF Suez have been able to book what the International Energy Agency described as billions of dollars in “nuclear rent.”
Now, the assumption that nuclear will be cheaper than competing “clean” technologies such as coal with carbon capture and storage is being questioned again, particularly in light of the extra costs that will become an inevitable consequence of post-Fukushima safety reviews.
Nomura Securities analyst Kyoichiro Yokoyama last week released a detailed assessment of competing clean baseload technologies, in which he concluded that the cost of nuclear was considerably higher than that of even coal with carbon carbon and storage…..
“Some observers have noted that the cost of the various subsidies paid when nuclear plants are constructed is not factored in and it has also been pointed out that the estimation of costs associated with spent fuel has tended to be overly optimistic,” he wrote. “In many cases, the details of these amounts are unclear or unspecified, which makes calculating the actual cost of nuclear power generation somewhat problematic.”…….
Yokoyama said that, since the Fukushima Daiichi incident, an increasing number of people have been questioning the real cost of nuclear power generation.He drew on research from MIT that noted how the cost of disposing of spent fuel and numerous regulatory and political risks associated with operating licences, including gaining the approval of residents, meant the capital costs were considerably higher (around 2-3 percentage points) than for thermal generation. ……
http://www.climatespectator.com.au/commentary/nuclear-too-hot-handle
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