Nuclear Socialism

Up until about a week ago, nuclear energy had been broadly embraced as our great radioactive hope for a clean energy future. In the face of a scary and uncertain situation in Japan, the president and some Congressional Republicans have urged us to stay the course on nuclear energy despite renewed safety concerns. The truth is that even without the safety concerns we should forgo new nuclear reactors because they are fundamentally uneconomic. Nuclear reactors are a bad deal for the private sector and they are a bad deal for American taxpayers.

Nuclear construction has been stagnant since the 1970s. According to conventional wisdom this construction freeze was the result of public fears about nuclear safety following the crises in Chernobyl and Three Mile Island. This is only part of the story. What really happened is that the private sector was unwilling to finance nuclear reactors because they were too expensive and too risky. New nuclear plants cost $10 billion at a minimum and have a history of chronic cost overruns. Without a carbon tax or carbon cap and trade system in place, nuclear energy prices are at least 8.4 cents per kilowatt hour and cannot possibly compete with coal at 6.2 cents or natural gas at 6.5 cents. In addition, advances in solar technology are constantly improving the efficiency of solar panels that will very likely be competitive with other forms of power generation when considered over the future lifetime of a nuclear plant. Wind energy, even the relatively more expensive offshore type, has also been shown to be cheaper than nuclear.

In fact, despite France's often reported reliance on nuclear energy, Europe has also found nuclear energy to be costly compared to other renewable and is investing in wind and solar instead. Of all available technologies, nuclear is the least likely to survive in a market that priced risk and costs properly, which is why the market will not finance new plants. Politicians are attempting to artificially change these dynamics now by offering federal loan guarantees, a program that started under the Bush Administration and has continued under the Obama Administration. These loan guarantees mean that taxpayers shoulder the burden of loan defaults and cost overruns. Taxpayers underwrite the risks that investment firms are unwilling to gamble on.


http://www.huffingtonpost.com/krystal-ball/nuclear-socialism_b_837666.html