Antinuclear

Why investing in new nuclear plants is bad for the climate

 the climate crisis demands urgency and requires such large investments that cost efficiency is of key importance.

Joule, Luke Haywood Marion Leroutier Robert Pietzcker, July 21, 2023

There has been a strong push to promote increased investments in new nuclear power as a strategy to decarbonize economies, especially in the European Union (EU) and the United States (US).

The evidence base for these initiatives is poor. Investments in new nuclear power plants are bad for the climate due to high costs and long construction times. Given the urgency of climate change mitigation, which requires reducing emissions from the EU electricity grid to almost zero in the 2030s (Pietzcker et al.¹), preference should be given to the cheapest technology that can be deployed fastest.

On both costs and speed, renewable energy sources beat nuclear.  Every euro invested in new nuclear plants thus delays decarbonization compared to investments in renewable power. In a decarbonizing world, delays increase CO₂ emissions.

Our thoughts focus on new nuclear power plants (not phasing out existing plants) in the US and Europe. In Europe, new nuclear power plants are planned or seriously discussed in France, Czechia, Hungary, Poland, Bulgaria, Slovenia, Sweden, and the United Kingdom. We do not focus on China, where government-set electricity prices and subsidized capital costs make it more difficult to contrast the profitability of different types of energy sources.

Nuclear energy is expensive

The cost overruns on recent nuclear projects are dramatic. In an international comparative assessment of construction cost overruns for electricity infrastructure, Sovacool et al. ² find that nuclear reactors are the investment type with the most frequent and largest cost overruns, alongside hydroelectric dams. 97% of the 180 nuclear reactor investment projects included in their analysis suffered cost overruns, with an average cost increase of 117% per project. 

More recently, the current estimate of the construction costs of the French Flamanville project stands at €13.2 billion up from an initial €3.3 billion (figures that do not even include financing costs, which the French audit office estimated at €4.2 billion up from an initial €1.2 billion) and those of the recently opened Finish Olkiluoto at €11 billion instead of €3 billion. “Construction costs are high enough that it becomes difficult to make an economic argument for nuclear,” Davis  finds. Similarly, Wealer et al.conclude that “investing into a Gen III/III+ nuclear power plant … would very likely generate significant losses.”

Why is nuclear so costly?

Construction costs are driven by safety. Nuclear accidents remain a possibility—and damages may be global. Rangel and Lévêque note that huge damages occurring at “low and uncertain probability” make it difficult to determine whether safety investments are cost-effective. The nuclear plants built relatively quickly in previous decades had lower safety. requirements. Policy makers’ preferences for safety makes sense given that nuclear power plant operators’ private insurance coverage is typically very limited.

Beyond construction costs, the cost of capital is a critical parameter for evaluating the viability of nuclear power. First, the very long construction times and delays generate particularly large financing costs for a given interest rate. Portugal-Pereira et al. report an escalation of capital costs worldwide due to increasing construction delays for the last generation of nuclear reactors constructed since the 2010s. The French court of auditors estimates that the cost of the French nuclear power plant Flamanville will increase from €13.2 billion to €20 billion once financing costs and delays are taken into account. Second, the historically high risk of default translates into higher interest rates. These two factors make the profitability of nuclear projects very dependent on financing conditions.

Finding an economic rationale for continued investment in new nuclear requires optimism regarding costs………………………………………….

Costs are not projected to come down very much even for the six new reactors planned to be built by 2035 (estimated to cost €52 billion in total, or €8.6 billion per reactor). The most recent EPR construction, Sizewell C in the United Kingdom, is also one of the most expensive projects at around €23 billion (£20 billion). This pattern of increasing costs over time has generated some interest in the literature (Lovering et al.⁷ and Eash-Gates et al.⁸). 

 Most of the candidate explanations (in particular, increased safety regulations) do not provide grounds for optimism for the future. In a wide-ranging review of different technologies, Meng et al.⁹ find nuclear power to be a “notable exception” where progress is overestimated with actual costs consistently higher than expected.

Small modular reactors (SMRs) may not be an exception: their advantages in terms of lower complexity may not translate into sound economics given lower energy production.  Glaser et al ¹⁰ note that even optimistic estimates require many hundreds of reactors to be built before electricity produced is cost-competitive compared with larger reactor designs. The potential of modularity to reduce costs appears limited in practice.

Nuclear power is not cost-competitive with renewables

Despite poor profitability, nuclear power is advanced as a good investment to fight climate change. However, today, the challenge for nuclear profitability does not come from coal or gas but from renewables. It is hard to overstate how strongly the costs of renewables have decreased (see Figure 1 on original) . Few publications have anticipated these cost decreases, and public debate is often based on outdated cost assumptions.

Baseload and flexibility

…………………………………….Shirizadeh et al. ¹² find that costs of storing variable renewable electricity production appear manageable, with storage costs of less than 15% of total costs associated with a fully renewable electricity grid for France. Pietzcker et al.¹ find that new nuclear constructions would not decrease the costs of achieving EU climate targets. Shirizadeh and Quirion ¹³ find that a 100% renewable system is very cost-effective for France. 

Taking into account wider economic impacts does not favor nuclear

………………………………….adding non-market benefits to the equation implies that non-market costs should also be considered. This is not easy: how should we account for nuclear waste? Nuclear waste is the unresolved problem of the nuclear industry. Cheap long-term storage for anthropogenic radioactive substances is elusive despite worldwide, decades-old efforts. In absence of any proven low-cost permanent storage technology, nuclear waste will have to be retreated regularly and stored in facilities above the ground. 

Costs would arise for many thousands of years. The importance of costs and benefits for future generations in today’s decisions has been a controversial topic for climate change policy, and it appears even more relevant for nuclear waste. Krall et al. ¹⁴ argue that SMRs may actually “exacerbate the challenges of nuclear waste management.”

Third, uranium mining causes pollution and radioactive exposure. As a report of the EU’s Scientific Committee on Health, Environmental and Emerging Risks notes, “almost 100% of the total eco-toxicity and human toxicity impacts over the whole nuclear life cycle is connected to mining and milling … While mining and milling is regulated [within the EU], 90% of what the EU need globally comes from 7 countries (none in Europe).” In Niger, for example, the systematic neglect of health and safety procedures in countries producing uranium for EU consumption persists despite evidence of “grave environmental impacts and rampant institutional failures.” ¹⁵

Finally, the continued development of nuclear energy could contribute to the risk of proliferation of nuclear weapons, as well as the risk of nuclear power plants being targeted in armed conflict, a permanent risk in Ukraine today.

Building new nuclear takes time we do not have

The business case and economics may be poor, but in light of the very real threat of climate catastrophe, should we not invest in all alternatives to fossil fuels? The problem is that building nuclear plants is slow and delivery is uncertain.

Even the International Atomic Energy Agency and Nuclear Energy Agency—organizations promoting the use of nuclear energy—assume construction times of around one decade, ¹³ whereas renewables can come online in a fraction of that time. Given lags in planning and regulatory approval, any new nuclear plants would come online too late to help decarbonize our economies on time. However, even this time frame appears optimistic:………………………………………..

Conclusion: In solving the climate crisis, new nuclear is a costly and dangerous distraction

………………………………………………………………..  the climate crisis demands urgency and requires such large investments that cost efficiency is of key importance……………………………… If governments and economic actors believe that nuclear power will come online at a certain date, they will not make alternative plans, and without alternative plans, the current carbon-intensive electricity system will remain in place—rendering climate targets unachievable.

References (many) ………………………..  https://www.cell.com/joule/fulltext/S2542-4351(23)00281-7

July 27, 2023 - Posted by Christina Macpherson | Uncategorized