The secret about nuclear power

There are some contradictions about the US nuclear power industry which have rich potential for creating confusion among citizens, the press, and elected officials. For instance, nuclear power is cheap to operate, but wickedly expensive to build and repair. Ben Paulos takes a look.

A nuclear power plant on a river

Nuclear power is safe – unless there is an accident. (Photo by Photorush, modified, CC BY-SA 3.0)


“We dance round in a ring and suppose,
but the Secret sits in the middle and knows.”

– Robert Frost

The US nuclear power industry is in trouble, with as many as 15 to 20 plants at risk of closure, according to the Nuclear Energy Institute. This has spurred a flurry of advocacy by nuclear plant owners, assisted by some advocates concerned about the impact on carbon emissions if they are replaced by fossil fuels.

But nuclear’s long history has created a complicated landscape that makes easy answers hard to find.

For instance, nuclear power is cheap to operate, but wickedly expensive to build and repair. It is clean in terms of air pollution, but creates deadly radioactive waste. It is safe, unless there is an accident. It gets fewer direct federal subsidies than renewables, but has enjoyed decades of taxpayer funded research, job training, licensing, and finance, and would not exist without federally subsidized insurance.

Most ironically of all, it is strongly supported by free market conservatives, yet can only exist in a centrally planned economy where it is sheltered from any investment or market risk.

These contradictions have rich potential for creating confusion among citizens, the press, and elected officials.

But the people who actually make the decisions about our electric system are less confused.  As far as banks, regulators and utility executives are concerned, nuclear power is radioactive.

Dancing in a ring

There is a ring of advocacy around nuclear power, with groups like the Breakthrough Institute and Third Way, prominent climate scientist James Hansen, and ‘60s era environmentalist Stewart Brand helping the Nuclear Energy Institute and a few nuke-owning utilities. The advocates are driven by the idea that nuclear power is needed to reduce carbon emissions, since they think wind and solar are inadequate to the task. The industry is simply trying to extend the life of valuable assets in the face of competitive pressures.

For many years, the industry promoted a “nuclear renaissance” that would be ushered in by a new generation of advanced reactors – smaller and cheaper, with passive safety features – or by the generation after that, with exotic technologies like thorium. They were successful in winning supportive policies from Congress and some states, including R&D, loan guarantees, streamlined licensing, and a production tax credit (PTC), similar to one for wind power, worth about $850 million per year for new plants. Less touted but probably most important of all is “construction work in progress,” or CWIP, where state regulators force customers to pay for a plant before it is finished, since banks won’t make such a risky investment.

The problem with the renaissance was that few utilities were interested.

Two new projects are being built, but they use conventional technology, not advanced. In Georgia, the Southern Company is adding two more reactors to their Plant Vogtle. Original costs were estimated at $6.1 billion, but the project is three years behind schedule and 50 percent over budget. In South Carolina, the V.C. Summer plant is being built by South Carolina Electric & Gas and Santee Cooper, a state-owned utility. That two-reactor plant was estimated at $9.8 billion, but costs have risen to at least $12 billion. Both projects rely on CWIP, federal loan guarantees, and federal tax credits.

The Watts Bar plant was recently finished by the Tennessee Valley Authority – but 44 years after construction began. The project was launched in 1972 and suspended in 1985, only to be revived in 2007.

Rear guard actions

With the nuclear renaissance foundering, advocates have retreated to a more pressing concern, helping utilities keep existing plants alive. Wholesale market prices have fallen in many regions of the US, due to greater energy efficiency, flat demand, cheap natural gas from fracking, and the rapid growth of wind and solar power. Nuclear plants in competitive markets, especially smaller ones with just one reactor, are struggling to compete.

In recent years, eight plants have been closed or slated for closing due to poor economics.  Other plants, like San Onofre and Crystal River, have been closed in the face of massive repair bills.

To protect existing plants from the rigors of competition, the plan now for nuclear owners and proponents is to change the rules to bring in more revenues, or in their words, to “properly value the attributes” of nuclear power. One strategy proposed in New York and Illinois is to change state renewable energy mandates to “zero emission” mandates, making nuclear power eligible. New York is expected to issue a plan this summer while the Illinois legislature adjourned recently without taking action.

The secret

Outside the few utilities that own nuclear plants, there is very little interest in nuclear. The people who actually make the decisions about the power system – regulators and utility executives – have moved on.

In a recent industry survey by Utility Dive, executives put nuclear power near the bottom of their list of concerns.  Only 11 percent thought their utility should invest more in new nuclear generation, compared to 65 percent for storage and 47 percent for renewables.

Another survey by PWC found that globally, only 26 percent of utility executives thought nuclear power would have a “big impact” on their market by 2030, compared to 71 percent for energy efficient technologies and 60 percent for solar.

In a global trend toward competition in the utility sector, the financial risks of nuclear have made it the odd man out. Nuclear plants cost billions of dollars to build and repair and have lead times of ten years or more, making it impossible to predict what future revenues will be. If investors have to bear the risk of investment, rather than captive consumers, they won’t touch nuclear.

Wind and solar power are modular and quick, meaning they can be developed in any size with lead times of less than a year. Global trade in technology means they can survive the ups and downs of any individual market.  And heavy competition creates relentless pressure for improvement and cost reductions.

It’s been clear for some time that new nuclear is not competitive. The surprise now is that even existing nuclear plants can’t compete with gas, efficiency, and renewables.

While advocates argue that nuclear doesn’t get as much policy support as renewables – a debatable point – the problems go much deeper. The secret is that nuclear power is not compatible with 21st century markets and policies. No amount of dancing will change that.

Bentham Paulos is an energy consultant and writer based in California. His views are his own, and don’t necessarily represent those of any of his clients.

by

Ben Paulos

Bentham Paulos is an energy consultant and writer based in California. His views are his own, and don’t necessarily represent those of any of his clients.

12 Comments

  1. MGR says

    Just one tiny question:
    About the only country that is capable of thinking beyond short term capital interest and electoral terms is china, as widely recognized.
    How would you explain chinas extensive nuclear builtup plans over the next decades?

    Maybe they recognized that renewable sources won’t be capable to even replace a fraction of what is now 80 million barrels oil, even greater amounts of coal and cubic kilometers of gas consumed each DAY by 7 billion people with ever rising number and energy consumed per capita.
    All the modern “markets”, “policies”, “global anythings” and financial means you bring forward as arguments for renewables came into existence by our gigantic fossil energy subsidies and will vanish again as any drastic shrinking to levels maintained by “renewables” will not go linear but with partly or total collaps of complex societies and potential global conflict.
    Nuclear or potentially fusion is the only means by scale that could eventually keep up our lifestyle for some more decades.

  2. Nathanael says

    MGR: solar *is* fusion power. Yes, it’s the only means which can keep up our lifestyle for decades.

  3. mahdi says

    Jigar Shah was talking about the US nuclear issue in the Energy Gang Show. The result of RE-proponents (including himself) with nuclear industry resulted in the idea of having 11 USD/tCO2 carbon tax which would save current nuclear reactors.
    I think it is a great idea to use nuclear plant owners to materialize that. This would make wind and solar even more competitive.

  4. John Laband says

    Why won’t the nuclear industry face it’s problems squarely, instead it turns away. The waste legacy the huge cost the dangers of accident and planetary wide pollution?

  5. MGR says

    Agreed Nathanael, we can capture some fraction of the fusion power irradiated by the sun just as did the plants millions of years ago which now constitute the basis of our wealth. Other means to capture this power are hydro and wind.
    I would be very relieved if I could outright agree with your statement. Unfortunately I cannot as there are at least three decisive differences between capturing irradiation (created by fusion in the sun) and fusion itself on site (earth). It’s the “energy flow density”, the “availability on demand” and consequently the fundamental EROEI (energy returned on energy invested) as well.
    Just take rainfall being gathered by nature from small trickles into big streams where we can make use of its high “energy flow density” via hydro power. This is why hydropower is by far the most effective (highest energy flow density and EROEI) of all renewable sources and why wind and photovoltaic cannot compete with this.
    If P. Prieto and C. Hall with their EROEI study on photovoltaic fields in Spain come anywhere close to truth (which is quite likely as they, for the first time, use great amounts of photovoltaic field data and do extensive investigation “energy invested”) it is a disastrous and disenchanting fetch-back to reality for our believe in photovoltaic based future.
    The fundamental thermodynamic question when it comes to prosperity or collapse of our modern complex societies is the following: Can we keep up our daily “NET ENERGY FLOW TO SOCIETY”?
    This “net energy flow to society” can be expressed as function of “total installed (gross) power” and the EROEI of this installed power.
    In other words: “net energy flow to society” = “total installed gross power” * (1-(1/EROEI))]. The EROEI converts gross power (=total power feeded into the grid by any power plant) into net power (power left for consumption left society). Another important factor that decreases EROEI is the need of “storage” of fluctuating renewable power to make it follow human demand. Best grand scale electricity storage means available are pumped-storage power plants that reduce the EROEI by about 20%.
    To put it into a nutshell: With generally low EROEI for “renewables” (except hydro power) and the mentioned low energy flow density for wind and solar in particular, I cannot see how “renewables” shall in any scenario succeed to maintain our current gigantic fossil + nuclear based “net energy flow”.

  6. Vivi says

    @WGR:
    I wouldn’t hold up a government that built vast, superfluous ghost cities just to boost industrial employment and GDP for a few years, and which despite having much better information than was ever possible during the Western Industrial Revolution still chose to prioritize rapid growth over even basic environmental regulation – resulting in large percentages of water bodies now too toxic to drink or fish and swathes of fertile land too polluted with heavy metals to farm, as an example of good foresight and long-term planning. Similarly, nuclear reactors create a lot of near-term building activity and need huge amounts of cement (between that and the mining and long-distance shipping of the uranium, nuclear energy is hardly “zero emission” in terms of life-cycle analysis), which is of course good for the currently stalling Chinese cement industry. And if your citizens are literally asphyxiating from coal smoke in the cities, you have much more reason to try any alternative that produces at least no soot than the Western countries with their better pollution control have. Especially if you’re not democratically elected and you therefore can expect a violent revolution when the people finally get too pissed off with your rule. And of course, a government like the Chinese, with all media and health professionals state-controlled, knows that it can just suppress the news if there’s a serious nuclear accident and keep the resulting diseases and fatalities under wraps, so there’s not much political risk to maintainting a nuclear plant fleet in a non-democratic state. It’s not like people can see radioactive fallout with their own eyes the way they can see the coal smog. (The population of socialist East Germany only found out about the Chernobyl accident and the resulting fallout cloud from the Western media, and nobody found out about the several near-catastrophic accidents in the only big East German nuclear plant until the government was finally toppled. Then those badly maintained, error-prone reactors were immediately shut down. Japan isn’t even a one-party dictatorship with state-ownership of its nuclear plants, just a capitalist oligarchy-pretending-to-be-a-democracy much like the US, and yet their government still gets away with orwellian censorship and straight-up lying to the population regarding the radiation levels in the Fukushima area and the health effects on the affected people.)

    Besides all that, China needs to build new nuclear reactors for the same reason that the US and UK do: To keep up steady production of weapons-grade plutionium in order to be able to keep building and re-fueling nuclear bombs (you can’t just store them for decades without maintenance; the payload degrades below critical mass over time), and to have a fig-leaf civil career option for the next generation of nuclear physicists and engineers. (No teenager sets out to study with the goal of spending their life building weapons of mass destruction, so you need other possible career goals to get people started on that track. But once they’ve invested several years of time and effort, and maybe have kids already, then a deal with the devil in the form of a well-paid military job looks more tempting.)

    The West German Green party started out on an anti-nuclear platform in the 1970s partly because they were pacifists and particularly worried about nuclear weapons. (It was the height of the Cold War, remember.) And the fact that Germany has no nuclear weapons and no interest in building any is one of the major reasons why there is no strong nuclear lobby in Germany and an end to nuclear power plants was so much easier to negotiate politically, back in the late 1990s and early 2000s, than an end to coal power plants. The negotiations about an exit from coal are just starting now that people have started worrying about CO2-emissions. (The other major reason is that there are still tens of thousands of jobs in coal mining and the mining labour unions are old and strong and deeply connected to at least one of the major parties. In constrast, nobody but the two or three big utility corporations owning the aged German nuclear plant fleet – the last one had started construction before the Chernobyl accident and there have been no new ones planned ever since – really cared about keeping nuclear fission technology alive in Germany.)

  7. Hans says

    @ MGR: EROEI studies face a minefield of possible errors. The study you prefer is also not immune: http://bountifulenergy.blogspot.de/2015/05/six-errors-in-eroei-calculations.html.

    More importantly EROEI is not so important, because energy investment is not the same as human effort. Just as an illustration: Let’s we assume there is an infinite non-polluting energy source that can be ‘mined’ completely automatically, but the mining uses 50% of the energy it . Who cares about the waste? Society gets energy without having to do anything for it.

    It would be nice to have some measure that expresses the energy return on human effort investment. Oh, wait it already exists. It is called monetary cost. And you know what renewables win there from nuclear.

  8. Scott Sklar says

    The author wrote a great article, but, in fact, nuclear energy receives far more subsidies than renewable energy, and in some cases, when taken in aggregate, account for more than 100% of the facility costs. – Scott Sklar, The Stella Group, Ltd, & Adjunct Professor, GWU
    The Union of Concerned Scientists a released February 2011 report about the subsidies for nuclear power.   The report, “Nuclear Power: Still Not Viable Without Subsidies,” found that more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage. Added together, these subsidies often have exceeded the average market price of the power produced. The report also examines the subsidies for new reactors.

    Executive Summary: http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_summary.pdf
    Full Report: http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_report.pdf

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