written 24 March, 2018
published
31 Mar 18
This third
article on nuclear power focuses on economic costs.
The
earthquake and tsunami at Fukushima in 2011 showed that, within hours, a nuclear
facility could transform from a $60B asset to a $700B, multi-decade, liability.
But nuclear power has never made
economic sense.
To justify
the billions of dollars invested in developing the atom bomb during WW2, the US
government created the Atoms for Peace program in 1954, promising atomic energy
"too cheap to meter". Because
of potential liability issues, no bank was willing to invest in this new
technology, so the Price Anderson Act was legislated to limit corporate liability
to $450M per reactor accident. Capitalizing profits, and socializing losses,
is a mark of dualistic economics.
As another
corporate subsidy, the government took on the responsibility for the disposal
of the high level radioactive waste, charging a modest fee to the
utilities. The disposal fund currently
totals $30B, but the disposal problem remains unsolved, with more than $40B
spent on the defunct Yucca Mountain facility.
There is an
inherent conflict between safety and cost.
When the first reactors were being designed, nuclear power was not well
understood, and the constant design changes were expensive. A decision was made to include a known weakness
in the design in order to expedite construction. The Fukushima reactors are a version of that
design, and their containment failure, after total loss of cooling water, was a
risk known for decades. There are 35
reactors of this design currently in operation, including 23 in the US.
In the 70s,
when nuclear power was all the rage, Washington Public Power System committed
to build 5 reactors. By 1983, with only one
plant completed, cost overruns, construction delays, and declining demand forced
a mid-construction halt on two plants, and complete cancelation of the last two
planned plants. This caused the largest
default on municipal bonds in US history. Similar delays and cost overruns on current
projects in Georgia and South Carolina, caused Westinghouse to declared
bankruptcy last year, and the parent company, Toshiba, was forced to sell
lucrative chip divisions to stay solvent.
Customers have been billed for years for nuclear power they will never
receive.
In
California, the San Onofre reactors were shut down due to unexpected expenses
for steam generators failures, leading to discussion about who will pay remaining
debt and decommissioning costs, the ratepayers or the stockholders. At Diablo Canyon, the remaining reactors operating
in the state, PG&E agreed to a shut down when the license expires in 2024,
and invest in renewables instead. Operating
an existing nuclear plant is no longer cost-effective compared to other power
sources, and six US reactors have been shut down in the last 5 years. Last year alone, 10,000 MW of solar was
installed in the US.
A standard
1000 MW nuclear plant, operating at 90% for 40 years, will cost about $10B to
build, another $1B to be refueled every 18 months, and at least $750M to
decommission. This gives a lifetime
power cost of $0.038/KWhr. A utility
scale solar array can be installed for $1.34/W, operate for 20 years, averaging
5 hr/day full capacity. This gives a
lifetime power cost of $0.037/KWhr.
Nuclear
plant construction costs have consistently run over budget and time schedule,
because they are complicated, unique designs, not modular. The costs of decommissioning are only
estimates, since none of the large reactors have ever been completely
decommissioned to greenfield status. The
storage of high level wastes has yet to be solved anywhere on the planet.
The primary
design challenge with solar power is intermittent production, but the recent
developments in storage battery technology are beginning to address this
issue. The modularity of both solar and
storage are well suited to mass production, which makes costs drop over
time. The other advantage is
scalability, which means that solar and storage can be designed to fit very
specific needs and grow as the needs change. Nuclear plants are large, centralized, and
capital intensive. This toxic, obsolete power
source is at odds with a world that is moving to smaller decentralized systems
of modest means.
