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Thursday, October 2, 2014
- Climate change and the resulting need for low-carbon energy sources is driving the current interest in nuclear energy despite the industry's near universal legacy of staggering cost-overruns, technical difficulties and dependence on enormous government subsidies.
Government interest in new nuclear energy plants seems far more political than practical or economic in light of the fact that Europe's latest nuclear plant under construction in Finland is four years behind schedule and 50 to 70 percent over budget.
Any claims that nuclear is a viable low-carbon or clean energy source are negated by its extraordinary costs that have increased at least five-fold in the past decade.
"Nuclear energy has always been heavily subsidised by governments around the world," Ellen Vancko, a nuclear energy analyst at the Union of Concerned Scientists, a U.S.-based non governmental organisation.
Under proposed U.S. legislation to reduce greenhouse gas emissions (Waxman-Markey Energy Bill), billions more dollars are headed the nuclear industry's way in the form of research and development funding, production tax credits, and 20 billion dollars in loan guarantees.
Added to that a major push by some politicians in the U.S. Senate to dramatically expand government-backed loan guarantees to subsidise the construction of 100 new nuclear plants in the U.S. over the next 20 years, Vancko told IPS.
No nuclear energy plant has been built in the U.S. for the past 25 years simply because they are expensive to build.
Moreover, the U.S. government lost its appetite for funding nuclear because the industry's default rate on government-backed loans has been over 50 percent, according to the Government Accountability Office.
That meant U.S. tax payers have ended up paying off the industry's multi-billion dollar losses and, bizarrely, producing windfall profits for some power utilities, Vancko says in an interview.
And nuclear is even more expensive today.
In 2001, the industry estimated cost of a new plant to be 1,000 dollars per kilowatt (kW) or one billion dollars for a typical 1000 megawatt plant. In 2008 it was 7,000 to 9,000 dollars/kW, says Steve Thomas, professor of energy policy at the University of Greenwich in the U.K.
"Costs have risen to 9 or 10 billion dollars per plant and that does not include the cost of financing," Thomas said in an interview.
Financing costs could easily double the cost unless backed by government loan-guarantees, which would still add billions to the ultimate cost. And these costs do not include costs of uranium mining and processing, waste management and cleanup, or plant decommissioning.
These current industry cost estimates are not for the much-touted "Generation 4" nuclear technology and its claims of low-cost, hi-efficiency and safety. "Gen 4 reactors are 30 years away from implementation," Thomas says.
Ten billion dollars today buys nuclear reactor technology that is based on a 1980s design with some improvements in safety and efficiency, he said.
Meanwhile, there are stacks of studies that prove the fastest and cheapest ways to cut energy costs, boost energy security and reduce carbon emissions are through energy efficiency and alternative energy like wind and solar, Vancko says. "The U.S. could reduce its carbon emissions 50 percent by 2030 through energy efficiency alone."
(*This is the first of a two-part series on nuclear energy and subsidies by Stephen Leahy, international science and environment correspondent for IPS.)