The monetary cost of nuclear power (not the nuclear industry hype)

THE ECONOMICS OF NUCLEAR REACTORS: RENAISSANCE OR RELAPSE?

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FINDINGS
Within the past year, estimates of the cost of nuclear power from a new generation of
reactors have ranged from a low of 8.4 cents per kilowatt hour (kWh) to a high of 30 cents. This
paper tackles the debate over the cost of building new nuclear reactors, with the key findings as
follows:
• The initial cost projections put out early in today’s so-called “nuclear renaissance” were about
one-third of what one would have expected, based on the nuclear reactors completed in the
1990s.
• The most recent cost projections for new nuclear reactors are, on average, over four times as
high as the initial “nuclear renaissance” projections.
• There are numerous options available to meet the need for electricity in a carbon-constrained
environment that are superior to building nuclear reactors. Indeed, nuclear reactors are the worst
option from the point of view of the consumer and society.
• The low carbon sources that are less costly than nuclear include efficiency, cogeneration,
biomass, geothermal, wind, solar thermal and natural gas. Solar photovoltaics that are presently
more costly than nuclear reactors are projected to decline dramatically in price in the next
decade. Fossil fuels with carbon capture and storage, which are not presently available, are
projected to be somewhat more costly than nuclear reactors.
• Numerous studies by Wall Street and independent energy analysts estimate efficiency and
renewable costs at an average of 6 cents per kilowatt hour, while the cost of electricity from
nuclear reactors is estimated in the range of 12 to 20 cents per kWh.
• The additional cost of building 100 new nuclear reactors, instead of pursuing a least cost
efficiency-renewable strategy, would be in the range of $1.9-$4.4 trillion over the life the
reactors.
Whether the burden falls on ratepayers (in electricity bills) or taxpayers (in large subsidies),
incurring excess costs of that magnitude would be a substantial burden on the national economy and
add immensely to the cost of electricity and the cost of reducing carbon emissions.

Cooper Report:
http://www.vermontlaw.edu/it/Documents/Cooper%20Report%20on%20Nuclear%20Economics%20FINAL%5B1%5D.pdf

The staggering cost of new nuclear power
http://climateprogress.org/wp-content/uploads/2009/01/nuclear-costs-2009.pdf

A new study puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

This staggering price is far higher than the cost of a variety of carbon-free renewable power sources available today — and ten times the cost of energy efficiency (see “Is 450 ppm possible? Part 5: Old coal’s out, can’t wait for new nukes, so what do we do NOW?“).

The new study, Business Risks and Costs of New Nuclear Power, is one of the most detailed cost analyses publically available on the current generation of nuclear power plants being considered in this country. It is by a leading expert in power plant costs, Craig A. Severance. A practicing CPA, Severance is co-author of The Economics of Nuclear and Coal Power (Praeger 1976), and former Assistant to the Chairman and to Commerce Counsel, Iowa State Commerce Commission.

Cooper: Escalating Nuclear Reactor Costs Seen in Major Reversals for Industry on Wall Street and in Texas, Canada
Tue Jul 7, 2009 10:30am EDT
http://www.reuters.com/article/idUS142854+07-Jul-2009+BW20090707

Ratings Warning From Moody`s Followed by Mothballing of New Reactor Plans in
Texas and Ontario; Developments in Line with Cooper Report from June Projecting
Trillions in Excess Costs for Nuclear, Compared to Combination of Renewables and
More Efficiency.
WASHINGTON--(Business Wire)--
Three major developments in the nuclear power industry in late June underscore
the key findings of the "The Economics of Nuclear Reactors," a report released
on June 18, 2009 by economist Dr. Mark Cooper, a senior fellow for economic
analysis at the Institute for Energy and the Environment at Vermont Law School.
The Cooper report finds that it would cost $1.9 trillion to $4.1 trillion more
over the life of 100 new nuclear reactors than it would to generate the same
electricity from a combination of more energy efficiency and renewables.

Available online at
http://www.vermontlaw.edu/Academics/Environmental_Law_Center/Institutes_and_Initiatives/Institute_for_Energy_and_the_Environment/New_and_Noteworthy.htm,
the Cooper analysis of over three dozen cost estimates for proposed new nuclear
reactors shows that the projected price tags for the plants have quadrupled
since the start of the industry`s so-called "nuclear renaissance" at the
beginning of this decade - a striking parallel to the eventually seven-fold
increase in reactor costs estimates that doomed the "Great Bandwagon Market" of
the 1960s and 1970s, when half of planned nuclear reactors had to be abandoned
or cancelled due to massive cost overruns.

Cooper said that three late June developments provide new evidence of the
validity of the cost-related concerns documented in his report:

* On June 30, 2009, Exelon cited "economic woes" as a major factor in postponing
for up to 20 years plans to build two nuclear reactors at its site in Victoria,
Texas. (See
http://www.victoriaadvocate.com/news/2009/jun/30/gs_exelon_070109_56587/?business&local-news
for local coverage of the decision.)
* On June 29, 2009, the Government of Ontario announced that it has suspended
the competitive bidding process to procure two replacement nuclear reactors
planned for a Darlington, Ontario site. As the New York Times reported: "Two
years into a $20 billion nuclear upgrade project meant to replace aging reactors
with next-generation technology, the Ontario government postponed the entire
process on Monday, citing excessive cost and uncertainties involving the
ownership status of the sole Canadian bidder … Yesterday`s move is a setback for
the Atomic Energy of Canada Limited, the 57-year-old government-owned
corporation that has built all of Canada`s reactors and could soon be sold off
to a private investor." (See
http://greeninc.blogs.nytimes.com/2009/07/01/ontario-puts-nuclear-expansion-plans-on-ice/.)

* On June 23, 2009, Moody`s Investor Services issued a report titled "New
Nuclear Generation: Ratings Pressure Increasing." The summary to the report
included the following: "Moody's is considering "taking a more negative view for
those issuers seeking to build new nuclear power plants … Rationale is premised
on a material increase in business and operating risk … most utilities now
seeking to build nuclear generation do not appear to be adjusting their
financial policies, a credit negative. First federal approvals are at least two
years away, and economic, political and policy equations could easily change
before then …" Cooper pointed out that even though Moody`s concludes that
reactors might be financially viable once operating, the barriers to actual
permitting and affordable construction may make it impossible to reach the
operational new-plant phase. See the report summary at
http://www.alacrastore.com/storecontent/moodys/PBC_117883 and a related news
story at
http://money.cnn.com/news/newsfeeds/articles/djf500/200906250936DOWJONESDJONLINE000658_FORTUNE5.htm.

Institute for Energy and the Environment at Vermont Law School, South Royalton,
VT.
Ailis Aaron Wolf, (703) 276-3265
aawolf@hastingsgroup.com

Copyright Business Wire 2009

Nuclear Bombshell: $26 Billion cost — $10,800 per kilowatt! — killed Ontario nuclear bid
http://climateprogress.org/2009/07/15/nuclear-power-plant-cost-bombshell-ontario/

We knew new nukes were absurdly expensive (see “Areva has acknowledged that the cost of a new reactor today would be as much as 6 billion euros, or $8 billion, double the price offered to the Finns.”). Now we know they are literally unaffordable.

Our friend and fellow blogger, Tyler Hamilton — who actually has a real job as senior energy reporter for the Toronto Star — published this stunning news in Canada’s largest daily newspaper:

The Ontario government put its nuclear power plans on hold last month because the bid from Atomic Energy of Canada Ltd., the only “compliant” one received, was more than three times higher than what the province expected to pay, the Star has learned.

Sources close to the bidding, one involved directly in one of the bids, said that adding two next-generation Candu reactors at Darlington generating station would have cost around $26 billion.

It means a single project would have wiped out the province’s nuclear-power expansion budget for the next 20 years, leaving no money for at least two more multibillion-dollar refurbishment projects.

“It’s shockingly high,” said Wesley Stevens, an energy analyst at Navigant Consulting in Toronto.


So nuclear bombshells have now been dropped on Canada, Finland, Turkey (see “Turkey’s only bidder for first nuclear plant offers a price of 21 cents per kilowatt-hour“) and this country (see “What do you get when you buy a nuke? You get a lot of delays and rate increases….”).

Now you may be saying, wait a minute, Joe, hasn’t Areva said it would deliver a single plant for $8 billion, so that should work out to a Walmart-style $16 billion price, rather than AECL’s Tiffany-style offer. Hamilton has more juicy details:

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