The Flawed Economics of Nuclear Power
by Earth Policy Institute
Environmental News Network, October 29, 2008
While the world's nuclear generating capacity is estimated to expand by only
1,000 megawatts this year, wind generating capacity will likely grow by 30,000 megawatts.
"Over the last few years the nuclear industry has used concerns about climate change to argue for a nuclear revival. Although industry representatives may have convinced some political leaders that this is a good idea, there is little evidence of private capital investing in nuclear plants in competitive electricity markets," says Lester R. Brown, President of the Earth Policy Institute, in a recent release, "The Flawed Economics of Nuclear Power". "The reason is simple: nuclear power is uneconomical."
In a recent analysis, "The Nuclear Illusion," Amory B. Lovins and Imran Sheikh put the cost of electricity from a new nuclear power plant at 14¢ per kilowatt hour and that from a wind farm at 7¢ per kilowatt hour. This comparison includes the costs of fuel, capital, operations and maintenance, and transmission and distribution. It does not include the additional costs for nuclear of disposing of waste, insuring plants against an accident, and decommissioning the plants when they wear out.
The United States, which leads the world with 101,000 megawatts of nuclear-generating capacity, proposes to store radioactive waste from its 104 reactors in the Yucca Mountain nuclear waste repository, northwest of Las Vegas, Nevada. The cost of this repository, originally estimated at $58 billion in 2001, climbed to $96 billion by 2008. This comes to a staggering $923 million per reactor, assuming no further repository cost increases. (See additional data.)
In the event of a catastrophic accident, every nuclear utility would be required to contribute up to $95.8 million for each licensed reactor to a pool to help cover the accident's cost. The collective cap on nuclear operator liability is $10.2 billion. Anything above this would be covered by taxpayers.
Another huge cost of nuclear power involves decommissioning the plants when they wear out. Recent estimates show decommissioning costs can reach $1.8 billion per reactor. In addition, the industry must cope with rising construction and fuel expenses. Two years ago, building a 1,500-megawatt nuclear plant was estimated to cost $2-4 billion. As of late 2008, that figure had climbed past $7 billion, reflecting the scarcity of essential engineering and construction skills in a fading industry.
Nuclear fuel costs have risen even more rapidly. At the beginning of this decade uranium cost roughly $10 per pound. Today it costs more than $60 per pound. The higher uranium price reflects the need to move to deeper mines, which increases the energy needed to extract ore, and shift to lower-grade ore.
The high cost of nuclear power also explains why so few plants are being built compared with a generation ago. In a Bulletin of the Atomic Scientists article, nuclear consultant Mycle Schneider projects an imminent decline in world nuclear generating capacity. He notes there are currently 439 operating reactors worldwide. To date, 119 reactors have been closed, at an average age of 22 years. If we assume a longer average lifespan of 40 years, then 93 reactors will close between 2008 and 2015. Another 192 will close between 2016 and 2025. The remaining 154 will close after 2025.
Only 36 nuclear reactors are currently under construction worldwide-31 of them in Eastern Europe and Asia. Although there is much talk of building new nuclear plants in the United States, there are none under construction.
Despite all the industry hype about a nuclear future, investors are pouring tens of billions of dollars into wind farms each year. And while the world's nuclear generating capacity is estimated to expand by only 1,000 megawatts this year, wind generating capacity will likely grow by 30,000 megawatts.
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