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Cost, Not Japan Crisis, Should Scrub Nuclear Power

| Written by John Farrell | 3 Comments | Updated on Mar 17, 2011 The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/cost-not-japan-crisis-should-scrub-nuclear-power-2/
please ignore this image
explosion at Japanese nuclear reactor

The plumes of smoke rising from Japan’s Fukushima Daiichi nuclear reactor create a visceral reaction.  But the crisis should not persuade Americans to abandon nuclear power. 

Instead, Americans should abandon nuclear power for its prohibitive and un-competitive costs.

The wildly escalting costs of nuclear plants under construction in the U.S. are a perfect example.  A pair of proposed nuclear power plants in Florida have “overnight” costs of $3,800 per kilowatt, but since nuclear power plants actually take eight years to construct, the total estimated project costs are closer to $6,800 per kilowatt (kW) of capacity.  This figure is reinforced by an estimate for Progress Energy’s two new units ($6,300 per kW $8,800 per kW), and Georgia Power’s new plants ($4,000 per kW $6,335 per kW), both still incomplete. 

As Mark Cooper notes in his thorough analysis of the so-called nuclear renaissance, this is nothing new.  Most nuclear projects haven’t come in on budget, or even close.

But let’s be generous for a moment and assume the U.S. utilities can hold to their current cost estimates.  What do those costs mean to consumers?  At $6,500 per kW, the expected cost of nuclear electricity is over 15 cents per kWh ($150 per MWh).

At that price, investment bank Lazard estimates that only two technologies are more expensive than nuclear (crystalline silicon solar PV and natural gas peaking plants).  But solar PV has significant near-term cost reduction potential and “gas peaking” only refers to the way we use natural gas, not its inherent cost (see Gas Combined Cycle).  In the time it would take to build a nuclear plant (6-8 years, optimistically), every commercial energy technology could produce electricity for less.

Subsidies can change the picture – the picture most Americans have of nuclear, that is.  The Union of Concerned Scientists recently reported that nuclear subsidies total nearly 7 cents per kWh, twice what a typical wind power plant receives and similar to the federal incentives offered for solar power.  It’s time to let the market pick our winners, not outrageous government subsidies for nuclear power.

Beyond its (escalating) costs and huge subsidies, nuclear power also reinforces a centralized grid paradigm where the financial winners are utilities who pass through cost increases onto the backs of ratepayers (sometimes before the plant begins operations).  Did we mention that Florida Progress will require $3 billion in transmission upgrades to accommodate its new nuclear plants?  Compare that to distributed renewable energy sources that can often interconnect to the grid with a minimum of infrastructure upgrades.

The crisis in Japan is terrible, but we shouldn’t eschew nuclear power for its ability to cause immensely disproportionate harm during natural disasters.  Instead, we should abandon this costly boondoggle for more cost-effective and renewable energy sources.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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  • http://taihendaro.cynic.net/ Curt Sampson

    It’s not unreasonable to subsidise new forms of power in order to get us to the point where we’ve explored the design space reasonably well and can find out the true long-term costs of it. Nuclear is not at that stage yet for various historical reasons, including an early rush to get any sort of civil power plant at all running (which meant that reactor design originally designed for a submarine was used) and GE and Westinghouse being quite interested in avoiding any other designs in order to reduce competition. We have plenty of reactor designs that shut down nicely on their own without external power, for example, but resistance to nuclear power has nearly stalled that research and its commercialization over the last three decades.

    As for the costs of plants, they don’t need to cost nearly as much to build, and in fact they used not to (and sometimes–if very rarely–still don’t). Because building a reactor is very capital intensive, the greatest cost issue is the time between initial design and commercial operation. If protesters of various sorts can slow down that process by a couple of years, they can double the cost of the plant. Throw in a constantly changing regulatory environment that forces redesign and rework, and now you’ve got a plant that costs three or four times what it should. Simply fixing this environment would bring capital costs for nuclear plants down to much more reasonable levels.

    You can full details on this in the chapter Costs of Nuclear Power Plants — What Went Wrong? from Bernard Cohen’s book The Nuclear Energy Option.

    As for subsidies, if we’re going to cut any, we should cut the subsidies to coal, which neither needs them or should have them. Coal is effectively subsidised in two ways: there are far fewer restrictions on how they deal with their waste and they are held to much less stringent safety standards than nuclear power. Force coal to be as clean and safe as nuclear and its costs would skyrocket.

  • Anonymous

    I would like to know how your cost projections play into the fact that the construction of the facilities is the major up front cost factor in nuclear energy. Your cost projections seem to be far less than reality given a reactors 40+ year life span.

  • John Farrell

    The costs I’ve quoted in the piece are levelized costs, divided over the expected lifespan of the power plant. The upfront costs are the big issue, but ongoing operations, maintenance and fuel are also an issue, as is storage and protection of spent fuel.