The Case Against Nukes

NUCLEAR POWER IS NOT THE ONLY WAY TO GENERATE A KILOWATT-HOUR
Nuclear Power Stations
Nuclear power stations as of 2002. For more recent data including a
table showing data on all active plants go to World Nuclear Association.
(Source: U.S. DOE)

While we tend to agree with Dr. Patrick Moore, founder of Greenpeace, and many others, that nuclear power development is a choice worth considering, what follows is a thoughtful financial analysis of the nuclear option that comes to a very different conclusion.

Citing recent cost estimates of just over $8.0 billion per gigawatt output, the author claims nuclear power is far more expensive than other energy options, including alternative energy. And if nuclear power really costs that much, the author is right.


The case for nuclear power has gotten a huge boost lately thanks to concern about CO2 emissions, but like many issues of policy and investment, concern about CO2 emissions is being used as a trump card that creates a distraction from other pressing questions. In areas where the conventional wisdom is fairly undifferentiated, such as the “smart growth” lobby, concern about CO2 emissions is used to completely kill any remaining debate, even though alternatives to so-called smart growth are absolutely not beyond debate. Similar criticism can be leveled against the early biofuel industry, where European carbon offset payments subsidized a global market for biodiesel where nothing of significance had existed before, financing massive rainforest destruction to grow oil palms. Waving the flag of CO2 alarm is not always furthering the right decisions.

A more relevant question would be to ask what is behind such astronomical costs for nuclear power in America. It is interesting the author’s focus isn’t to question the potential for nuclear power to be relatively safe. And given the track record of nuclear power in Sweden and France, it is credible to say nuclear power has gotten safer than ever – maybe even safe enough to change the minds of many who have previously opposed it. But if nuclear power is so expensive, why are they continuing to build nuclear power plants in those nations, and why is electricity relatively inexpensive in those nations? Could it be the sky-high price of nuclear power in the USA is due to the cost of acquiring government permits and and fighting environmentalist lawsuits? How many billions are for these intangible costs, and how many billions are actually needed to put steel in the ground?

Whatever the underlying reasons, nuclear power in the USA is very expensive, and a detailed look at just what those expenses are might be a good topic for a follow up. – Ed “Redwood” Ring

The Case Against Nukes – Nuclear Power is Not the Only Way to Deliver a Kilowatt-hour
by Craig Severance, October 3, 2008
Nuclear Power Plant Next to River
One kilogram of uranium fuel yields 20,000 times
more energy than one kilogram of coal
(photo: US EPA)

Speaking to the nation about the energy crisis recently, President Bush proclaimed, “if there was a magic wand to wave, I’d be waving it.” Bush then proceeded to wave the perpetual “magic wand” for energy, urging more nuclear power.

Candidate John McCain followed suit in his speech on global warming, linking his carbon emissions cap-and-trade proposal to massive subsidies for the nuclear power industry. We have seen this all before — a powerful lobby promoting itself as our energy solution, and receiving Federal billions. Corn ethanol has now received these subsidies for decades, though experts warned it would do little but divert food crops to fill our gas tanks. Today’s food price crisis is in part a fulfillment of these prophecies.

The nuclear industry has launched a major effort to convince Americans nuclear power is the solution to global warming. This public relations campaign can be traced directly to a 2003 MIT study, “The Future of Nuclear Power”, which recommended it. Why would public opinion matter? The MIT authors noted, “Today, nuclear power is not an economically competitive choice. Moreover, unlike other energy technologies, nuclear power requires significant government involvement because of safety, proliferation, and waste concerns.” They concluded nuclear power faced “stagnation and decline”, without billions in new government subsidies.

The U.S. nuclear industry has in fact been in stagnation for 30 years. The last nuclear plant built in the United States was ordered in 1978. The industry blames environmentalists for its collapse, yet government policies have always favored nuclear power.

WORLD ENERGY USE BY FUEL TYPE, 1980-2030
Nuclear Power Stations
Even if nuclear power were to experience significant growth,
it will still only produce a fraction of projected global energy.
(Source: U.S. Energy Information Administration)

Utility executives, not environmentalists, halted nuclear power’s expansion decades ago, because of extremely high costs. According to the U.S. Energy Information Administration, cost overruns for nuclear plants for the years 1966 to 1977 ranged from 200 to 380 percent.

The largest bond default in the history of the municipal bond market was a $2.25 billion bond used by the Washington Public Power Supply System to construct two nuclear power plants.

Nuclear power failed because, in the end, it is just one of many ways to generate electricity. In comparison with other choices, nuclear power proved to be one of the most expensive ways to produce a kilowatt-hour.

Nuclear power lost its market primarily to coal-fired power plants decades ago. However, coal is one of the largest carbon dioxide emitters, and now recent actions by state regulators, environmentalists and Wall Street have resulted in a virtual moratorium on new U.S. coal-fired power plants. The nuclear industry seeks to exploit this, by promoting the message that nuclear power is our only choice left – regardless of cost.

Some U.S. utilities are now proposing a new wave of nuclear plants. However, recent cost estimates are causing “sticker shock” – at least $9-$12 billion per plant, roughly double the $5 billion per plant estimated just last year. Few private projects in the history of the world have been so costly.

Making a leap from economical coal-fired plants, straight into buying a nuclear power plant is akin to shopping for a Rolls Royce, because your good old Chevy died. Sure, the Rolls Royce will get you around – but can you afford the payments? Will utility customers be happy to pay so much more for electricity?

At $9 billion for an 1100 megawatt nuclear plant, nuclear generating capacity is more than 12 times the price of the same power capacity in gas turbines, and 2 to 3 times more costly than comparable power output from wind farms. In addition to costing far more, the nuclear plants would not come on line for at least 10 years, delaying reductions in greenhouse gases by at least a decade.

Faced with such bad numbers, the nuclear industry has admitted it cannot find backing from Wall Street. Instead, the industry is turning to taxpayers. Congress has authorized $18.5 billion in Federally guaranteed loans for new nuclear plants. This will only be enough to fund two plants, so the industry is pushing for hundreds of billions more. The Congressional Budget Office has estimated the risk of default on these nuclear loans to be at least 50 percent. This massive new outlay for nuclear power would eclipse all public funds for all other energy sources combined.

The nation is now reeling from the aftermath of people buying homes they could not afford, because someone was reckless enough to loan them the money. Do we want our utilities to buy power plants they can’t afford?

The taxpayer funded banquet for the nuclear industry would not end with power plants. This initial pork would be followed by taxpayer subsidies for fuel enrichment, plant decommissioning costs, and perpetual taxpayer funds for thousands of years to maintain the nuclear waste.

There is another way. Most utilities across the country have adopted a strategy of prudence, recognizing we are finding our way to a renewable energy economy. These utilities are using gas turbines as an inexpensive way to add generating capacity needed to assure reliability of power supply. They then minimize actual fuel consumption, by purchasing wind and solar power and funding improved efficiency. Midwestern utility Xcel Energy, a leader in this approach, plans to reduce greenhouse gas emissions by 20% by 2020, while increasing output and keeping rates affordable.

Large solar electric farms are now being installed in the desert Southwest, and wind farms chiefly on the Great Plains. This is already making a big impact. Latest figures from the American Wind Energy Association show new wind farms made up about 30% of new U.S. generating capacity in 2007. Wind energy is now cost competitive even with coal. The U.S. Department of Energy recently announced wind energy can provide 20% of our electricity by 2030, equal to nuclear energy’s current proportion

The sun does not shine nor the wind blow all the time, so peak solar and wind power can be stored using simple compressed air technology, to provide a steady source of power. Mason, Fthenakis, and Zweibel, in their article “A Grand Solar Plan” (Scientific American, Jan. 08) show by 2050 these technologies, together with sporty new plug-in hybrid automobiles, can completely eliminate our need for imported oil, with renewables producing 69% of U.S. electricity. Additional technologies to provide even more clean energy include plasma generation plants that cleanly burn municipal waste, cellulosic or algal biofuels, geothermal, and ocean source generation. With no federal loan guarantees, billions in venture capital is flooding into renewable energy, a new growth industry.

We need not accept the message of fear that nuclear power is our only choice left. There are a lot of ways to generate a kilowatt-hour.

Craig Severance, CPA, is co-author of The Economics of Nuclear and Coal Power (Praeger, 1976). He is a practicing CPA in Grand Junction, CO, who has received the honor of “Top Ten Scorer” on the CO CPA Examination. He and his wife, Dr. Avis Severance, DO, own a “Net Zero Energy” medical office building with a 10 KW photovoltaic system that supplies all the energy used by the facility.

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20 Responses to “The Case Against Nukes”
  1. Jeppen says:

    I have no idea how the U.S. can get its costs up to $9 billion. Finlands fifth reactor, at 1,600 MW, costs about $4.4 billion, even though they pay extra for non-standard security design. That’s $2,750/kW, which is significantly cheaper than wind. (Wind power is about $1,300/kW, but averages only 33% of capacity whereas nuclear plants do 90%+.)

    Perhaps wind would be preferable anyway, but unfortunately, it doesn’t really scale beyond 20% of total production due to its intermittance. (Perhaps electric cars will improve that figure somewhat.) And nothing else in the renewable sector is reasonable, cost wise, or also doesn’t scale.

    So both wind and nuclear should be built as fast as possible, to enable us to shut down coal plants. Using only one of these technologies will create larger bottlenecks and price inflation in that technology, and we won’t get rid of coal as fast.

  2. JN2 says:

    Jeppen, I think you’ll find that the cost is 4.4B Euros, or $6.0B US dollars. This is approx $3,750/kW which (at 90% capacity) is more expensive than wind (at 33%). And I believe that nuclear’s fuel and maintenance cost are higher than wind too…

  3. Rod Adams says:

    There are so many inaccurate statements in Mr. Severance’s “analysis” that is it hard to figure out where to begin.

    Perhaps one place would be to share some facts about electric power production costs (in cents per kw-hr) in the US in 2007 from sources of electricity that together make up more than 92% of the market:

    Coal (48.5%) – 2.47
    Gas (21.8%) – 6.78
    Nuclear (19.4%) – 1.76
    Petroleum (1.6%) – 10.26
    (note: taken together, wind, solar and geothermal produced about 1.1% of the US electricity supply in 2007. )

    (The costs are from Global Energy Decisions, the market share portions come from the DOE’s Energy Information Agency (Table 1.1. Net Generation by Energy Source: Total (All Sectors), 1994 through May 2008. To break out details for “other renewables” I used table 1.1A)

    Wind and solar are intermittent and diffuse. They require enormous collectors, reliable back-up power systems, new transmission corridors through scenic area, continuous subsidies, and mandated utility purchases through a back-door subsidy program called the Renewable Portfolio Standard. We all pay the excess costs NOW.

    The Production Tax Credit by itself costs taxpayers more for each kilowatt-hour generated (2 cents) by wind or solar than EVERYTHING a nuclear kilowatt hour costs electric utilities to produce. The wind and solar industries just got an 8 year extension on this subsidy, and the beneficiaries are such tiny little companies as GE (largest wind turbine manufacturer in the US), BP (formerly known as British Petroleum and one of the largest solar panel makers in the world), and BP Capital (that is Boone Pickens’s venture capital fund and is not associated with British Petroleum.)

    The “renewables” industry’s lobby group has been working for years to get that extension passed. Its expenditures in that area make those of the nuclear power industry look tiny.

  4. Jeppen says:

    JN2, no, I’m talking about US dollars and stand by my figures. Sure, nuclear has to devote a bit more (not much) to operation, maintenance and decommissioning, but on the other hand, wind needs more backup generation capacity and more investments in the grid.

    As I said, I think both are viable at this point, but only nuclear really scales. So if we are in agreement that coal is worse, there is really no alternative. Rod Adams gave us a breakdown of electricity production in the US. We should aim for it to change to:

    Wind: 20%
    Natural gas: 20%
    Hydro: 7%
    Nuclear: 53%

    This would mean an expansion of nuclear from 19% to 53%, or about 150 new reactors. Even this is stretching it with regard to wind – please remember that with a mean of 20%, it sometimes generates 60% of local needs and sometimes 0%. The ordinary hydro and gas won’t be able to always smooth things out, so we’d need reserve capacity sometimes and may actually have too much power sometimes and will need to let some go to waste.

    If we start to use electric cars, or if we start generating liquid fuels from electricity – we can do electrolysis to get hydrogen and then convert hydrogen to methanol – then wind might play a larger role than 20%.

  5. fireofenergy says:

    Plenty of alternatives. Most are just as or more expensive than nuclear. Wind, though, is cheaper but you don’t have storage. PV is sure to come down (it already has but is priority, kept high) and again, no electrical storage. There is only one source of unlimited clean energy currently deployable: Solar Power Towers. This is the only AE sorce that can delever 24/7 by use of molten salt.

    People who think that coal and nuclear are the only major choices have been listening to the government far too long and have not done their homework. Many promising startups include the owners of the troughs and the people behind Solar two, both built in CA “decades” ago. (Luz II and SolarReserve) Stupid candidates want to heavily subsidize nuclear. This article references the MIT study, which points that nuclear is far too nonrenewable. Large scale solar power towers (or Concentrated Solar Thermal – CST) actually cost less than nuclear. Period!

  6. Rod Adams says:

    fireofenergy – You are being disingenuous to claim that Luz II and SolarReserve show anything close to 24/7 reliability for solar energy. At best, their molten salt storage systems last only a couple of hours.

    They do have natural gas back up, however, so the capital investment in the steam turbine system can be used as long as the utility does not mind buying natural gas. As the data I posted earlier shows, the average price of natural gas fuel for electric power production in 2007 was somewhere close to 6.78 cents per kilowatt hour. (With natural gas generators, the cost of fuel represents about 90% of the total generation cost.)

    The sun sets every single day. During the first couple of hours in the morning and the last few hours in the evening, the sun’s elevation is so low in the sky that the power received is not very useful. At best, solar collectors are capturing energy for about 8 hours per day. If you happen to have clouds overhead, all bets are off.

    We build electrical power plants partially to insulate our “naked ape” bodies from the vagaries of the weather. Building systems that are completely dependent on the sun and wind is a huge step backward in human technology evolution.

    Of course, if your only source of information is the sales literature of the solar energy companies, you might have a different perspective than those of us that live in the real world and watch a lot of sunsets and sunrises.

  7. fireofenergy says:

    Rod,
    Then what are we to do? Use up all the uranium and fossils, (and go way backwards into decline). Then it will be too late to build CST. Yes, I admit that I am rather hopeful when it comes to reading their solar stuff, (comes from liking the space program). You see, A large SPT will have to utilize nuclear class steam genorators and will be able to store heat for more than a day. With thousands spread about the Southwest, shear size will overcome intermittancy. Only a backwards ideology would resort to currently perceived limitations.

  8. fireofenergy says:

    Is this one childish? Billions of large mirrors (from decommissioned solar thermal after something better came along) totaling over 50,000sq mi worldwide in the 2030′s no longer point to the generators, but instead, straight up to collectively mimic a giant sunshade in space necessary to reduce negative albedo (melting icecaps). Is anyone willing to do the math…

  9. fireofenergy says:

    Ok, I’m getting way off topic. (But this is important…) The total Earth surface is about 200 million sq miles. Assume that the 50,000 of mirrors are spread about likewise. The poles recieve very little intensity per unit of area. Since I don’t know the trig to figure exactly, will assume the surface as being “0″ at the poles and 100% at the equator. Thus 100 million / 50,000 = 1/20th of 1% difference. Also, the deserts are already a lighter color than the oceans.

    Conclusion: If just 1% could do the job of lessening albedo to the point of reversing the melting of the icecaps, we would still need upwards of a million sq mi of highly reflective material. Wrapped around the Earth it would only be 40 miles wide!

    The point is, if we have to revearse GW, I thought we might need all those mirrors anyways… and I just hate the thought of having to rely upon heavily subsidized nuclear (Mc Cain wants to subsidize it to the tune of $5 per watt!) At least with the solar thing, it would only be partially subsidized. My effort is to not waste it on expensive, non energy storing PV either!

  10. Luke says:

    fireofenergy:

    Use up all the uranium? How long do you think that is going to take?

    There is sufficient uranium on the earth (as well as thorium and then deuterium too) to provide ample energy for many, many thousands of years. One credible estimate in fact estimates world reserves of uranium as lasting for five billion years, as long as the sun will live.

    Nuclear energy is no less a “non-renewable” resource than the hydrogen inside the sun and stars is a “non-renewable” resource – of course, the second law of thermodynamics tells us that every energy resource is really “non-renewable”.

  11. fireofenergy says:

    Good point, I’m reading ’bout thorium now… we can figure on deuterium later if fusion comes along…

  12. Craig Severance says:

    The Author Replies:

    Some of the comments posted unfortunately show some of the confusion and downright misinformation that the nuclear p.r. campaign has spread the last couple of years.

    1) 2c/kwh is just the Operating & Maintenance costs — for reactors built some 30 years ago that have already fully amortized off their entire capital costs. The cost of construction of the nuclear plant is the largest cost. Not including that is like saying your entire housing cost is just your water bill, and ignoring your mortgage payment.

    2) A lot of confusion surrounds $/KW numbers flying around. Latest “2007 Dollar Overnight Costs” from Florida Power & Lights’s Turkey Point 6&7 proposed reactors were estimated by FP&L to be in the range of $3,600 to $4,600/KW of capacity. That’s not the full cost, however, unless you can figure out how to actually build a nuclear power plant “overnight”. Its a standard “starting point”, using what is known or estimated on “today’s prices” and without any future escalations in costs over the 10-year course of construction. It is always necessary to plot out the expected % of construction each year, and how much today’s prices will increase by then. You also have to include interest during construction.

    3) When you include FP&L’s (very conservative) expected price escalations over the 10 years, and the interest they project, FP&L shows total “all-in costs” — in other words the actual dollars they will recover from ratepayers — in a range of $6,400 – $8,100/KW — thats how you get $9 billion for an 1100 MW reactor. (They also examined 1500 MW reactors which would cost as much as $12 Billion each, but you’re talking same $/KW range.)

    4) No one actually knows how much these new nukes will cost, as they are all “demonstration plants” of entirely new designs. Incidentally, the Finnish reactor is EU’s first new generation nuke and its already over 2 years behind schedule, and cost estimates have already been revised upward 75%.
    4) I am now plotting this new information into some ranges of cents/kwh for when the reactors finally come on line. In some states (FLA & SC are some I know) the utility is going to charge ratepayers every year of the 10 years for very substantial Cost Recovery or CWIP charges. Progress Energy in FLA just announced a 31% rate increase for 2009, about 1/3 of which is just to fund new nuclear plant project costs. Much more will come as this early stage normally incurs a very small % of total project costs. This is for kwh to be delivered at least 10 years from now.

    5) Many people have a hard time getting their minds around Amory Lovins’ “Negawatts” concept of having utilities make money & charge ratepayers for reducing loads through efficiency. At least with those programs, people are seeing tangible benefits now. The nuclear industry is (literally) now raising electric rates in some states for “No-Watts” programs — in other words, no kwh generated, and no conservation or renewable program to benefit you now, and a promise of kwh in about a decade. “I will gladly pay your Tuesday….”?

    5) Renewable energy and energy efficiency advocates and businesses should consider the utility service areas where nuclear plants are proposed, to be prime candidates for opportunity. If your utility raised its rates 31% in one year, wouldn’t you start looking for ways to cut your usage?

    More to come in a few weeks. This will be my only post until the new study is done.

  13. fireofenergy says:

    I thought that MIT study concluded less than fifty years for only 20% worldwide demand from uranium… It’s not worth the risks either since nobody knows what to do with the wastes.
    SPT’s, if large and distributed enough, can provide ALL the power humanity needs. They will also create many more jobs, less to OPEC due to e-cars (oh, more jobs) and so, our electricity will go up a little, ’bout the same as with any other new non-fossil plant. But definately not as much as a fossil fueled depletion!

  14. Pluto Boy says:

    The US Department of Energy issued a news release on October 2 in which it made a plea for more government subsidies for new nuclear plants, in the form of loan guarantees. DOE wants more than $100 billion more in such subsidies. The taxpayer will eat the cost of those utilities which default & GAO estimates that could be 50% of projects. Guess its the season of bailouts and handouts… In the news release, DOE estimated the cost of a new reactor at $9 billion so now they are on record with a figure. Watch it go way higher. See DOE news release on the DOE website at:
    http://www.energy.gov/news/6620.htm

  15. Rod Adams says:

    @Craig – I fully recognize that the 1.76 cents per kilowatt hour (why do you add more than 10% by rounding up?) is operations and maintenance cost and does not include the initial capital outlays.

    Here is a rhetorical question for careful, critical thinking – if nuclear plants are so darned expensive, why is it that the plants that are operating today are essentially all paid off and still have 25-40 years remaining before they will be decommissioned? After all, electricity prices during the past 30 years have been relatively low and pretty steady. How did the utilities collect enough money to pay off the plants?

    Craig – you were one of the people in the late 1970s who warned us all about how terribly expensive nuclear power would be. Compared to the fossil fuels that compete with nuclear power, how accurate has your prediction been?

    Does anyone wonder just what our energy supply situation would look like today if we had simply completed the additional 100 or so projects that were cancelled in the 1980s when it looked like there was enough cheap gas and coal to make nuclear power uneconomical? How much cleaner would our air be today if the rest of the world had also continued building nuclear plants instead of taking a 30 year detour through additional coal and gas consumption?

    Finally, just imagine how much less prosperous the fossil fuel industry would be today if their – perhaps unwitting – allies like Craig Severance had not been so successful in helping to slow the development of the only competitor that has ever taken market share from fossil fuel.

  16. Rod Adams says:

    Craig:
    It has been four weeks since your post promising a new study “in a few weeks”. How is the effort coming? I am one of those poor dummies who has difficulty getting his mind around Amory Lovins’s negawatts proposals – I just cannot get my spreadsheets and calculator to spit out compatible results given his assumptions.

    Maybe it is simply operator error or maybe I need a more complete explanation than what I have been able to find after about 15 years of intermittently reading his body of work. Perhaps my problem is that I need to better focus my studies and ONLY read Lovins while tossing out all those troublesome text books and reference materials that I have gathered over the years.

  17. Cyril R. says:

    Hmm, even @ 8,100 / kWh that is a lifetime levelised cost probably somewhere in the 10-15 cents/kWh depending on interest rates, capacity factor, reactor lifetime and production costs. Higher than the national average spot price in the USA but not prohibitive IMHO. On the other hand, investors can’t make any decent return on investment with such high levelised cost. Negawatts do tend to be much easier and cheaper, for now, so that’s where most of our attention should go to over the next several years at least.

  18. Cyril R. says:

    Eh, that’s 8,100/kWe, not kWh

    I always hate it when people mix these things up, now I’m doing it myself…

  19. Craig Severance says:

    I should post a link to the updated study I completed, which was web-published by Center for American Progress in early January 2009:

    http://climateprogress.org/2009/01/05/study-cost-risks-new-nuclear-power-plants/#more-4573

    It ended up with total “All-In” Costs for new nuclear power construction most likely being in the range of $10,550/KW, and total Cost/kWh in the first year of full operation likely to be from 25 to 30 Cents/kWh (nominal dollars) Generation costs (not counting transmission & distribution).

    The Study was well received and was cited on CNN.com, BusinessWeek.com, WSJ Environmental Capital, bnetnews/energy, Grist, The Daily Kos, etc. and even spread around Europe with the story translated into French, German, Italian, Polish and Portugeuse, from what I have seen so far.

    Perhaps with the recent action where $50 Billion in Federal Loan Guarantees for nuclear was actually stripped off the Stimulus Package in the House/Senate Conference Committee, we may now be able to see if the nuclear industry can compete without these massive Federal subsidies.

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