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Sunday, September 22, 2013

The "Nuclear energy costs too much" argument

Photos via Wikipedia commons


Amory Lovins: "...so hopelessly uneconomic that one needn’t debate whether it’s clean and safe."

Joseph Romm: "... too expensive to matter for the foreseeable future."

Bill McKibben: "...like burning $20 dollar bills to make electricity."

Some recent headlines: Wind Energy Company to Pay $1 Million in Bird Deaths and  Costs Derail Giant UK Offshore Wind Farm


Two typical estimates to replace home electricity use with solar 10/13/2013

The above solar estimates come from one of several websites that offer estimates based on where you live. These websites are designed for solar contractors to drum up business. They are not going to offer high estimates. Go ahead and click here to get an estimate for your home.


 Source for above graphics


Let's talk capital costs

Average cost (sans subsidies) of solar for above estimates = $54,242 per home, ($65,353 +$ 39,131)/2.

Average cost of a new $9 billion 1100 MWe nuclear power plant per home = $10,078 per home, ($9,000,000,000/893,000 homes).

I've always been a big fan of solar ...but damn. That's five times as expensive as nuclear. There's also something appealing about just having three wires coming to my house instead of being personally responsible for tens of thousands of dollars worth of solar panels on my roof. 

Never mind for now the fact that the nuclear will also produce power 24 hours a day.

In addition to the up-front capital costs (see above pictures), utilities will eventually have to start charging you for use of the grid to disperse the electricity your solar power produces. Somebody has to pay for all of those power lines, backup power plants, and transformer stations.

UniSource Energy in Arizona for example, which is highly supportive of solar, is one of many utilities that already charges solar panel owners rent for the grid. One fee called the "Delivery Services" would  add about $20 to a $110 bill (depending on kWh used) and another fee called "Green Energy Charges" adds roughly $10 more for a total of about $30 per bill to allow your solar panels to share the grid.

You will also be stuck with the costs of maintenance when a wire comes lose, or inverter fails, monitoring system goes dead, cleaning, and on and on. If you paid cash, you will be losing the interest that money would have earned, and of course, if you borrowed money, you will be paying interest on it. I may yet put solar on my house, but if I do, it is very unlikely to ever pay off.

Other than up-front capital costs, what does "cost too much" mean exactly? In a nutshell it means that it costs more than other alternatives, like natural gas (a fossil fuel that emits 30 times more green house gas emissions than nuclear).

Thanks to a great deal of very sound critique from the internet, most (but not all) of the more visible anti-nuclear energy proponents (see above photos) have largely, slowly, grudgingly, abandoned the grossly exaggerated danger and waste arguments against nuclear energy. They now hang their collective hats on the cost argument; new nuclear power plants are more costly to build (capital intensive) than fossil fueled power plants, natural gas in particular.

However, the dishonesty inherent in this argument is twofold:

1) Wind and solar also cost more than fossil fuels.

2) They are only talking about construction costs. Construction costs are irrelevant if the result is a net profit (like rent received on a skyscraper). Although horrifically expensive to build (and horrifically environmentally damaging) Grand Coulee and Hoover dams have been very profitable. This has been true with few exceptions for nuclear power plants as well.

What do Lovins, Romm, and McKibben all have in common? Crystal balls. They can see into the future. They are so confident that nuclear power can't produce gargantuan amounts of cost competitive low-carbon energy as it has done for the past half-century, they are (unlike NASA scientist James Hansen, author of Storms of My Grandchildren) willing to bet our children's and grandchildren's futures on it for us. Thanks guys! At the same time they can see the cost of solar going from three or four times the cost of nuclear to ...too cheap to meter?

For those who would rather displace nuclear with renewables instead of displacing fossil fuels with them, consider reading the "we don't need nuclear energy because renewables can do it all" argument. A recent study by the National Renewable Energy Lab concluded that it may be possible to replace about a third of our energy use with renewables ...if we can increase by an order of magnitude the use of geothermal, biomass, solar, and wind by 2050. When the NREL demonstrates renewables alone can't displace fossil fuels (on purpose or not), you can pretty much hang your hat on it. Once the use of renewables have maxed out, further reduction in fossil fuel burning will have to come from nuclear power ...or some other low carbon energy source yet to be invented.
 
About those solar estimates

The internet is rife with websites that will estimate the cost of a solar installation for your home because they want your business. They are not going to give you a high estimate that may scare you away ...if they can help it. But it's only an estimate. For example, they don't ask if your roof slopes the right way or is even big enough. Google "solar cost estimator." I chose one of the sunniest cities (Tucson) and one of the cloudiest (Seattle). Sunnier places will require fewer solar panels.

These websites also tell you what subsidies you might be eligible for and go to a great deal of effort  to convince you that, over time, your solar panels (like nuclear) will eventually pay off.

Typically, to prevent sticker shock, they also, by default, estimate replacement of only 50% of your electrical use. You have to change the default value to 100% to get the full cost. The Seattle installation is eligible for $34,000 in government subsidies. The Tucson installation is eligible for $14,000 worth of subsidies. I mention the subsidies only because there is another anti-nuclear energy argument out there claiming that nuclear energy is more heavily subsidized ...when it actually isn't.

Similar arguments apply to solar hot water, which is far more efficient than solar photovoltaic. Although I'd love to put a solar hot water system on my home the next time my water heater needs replacement, I will probably just buy another $350 (low capital cost) hot water tank rather than investing $9,000 or so (high capital cost) for solar hot water. If I were paying a few hundred dollars a month to heat my hot water with natural gas, I just might risk the solar, but we only pay about $20 a month.

$9,000 / ($20/month x 12 months/year) = 37 years to break even.
$9,000 / ($200/month x 12 months/year) = 3.7 years to break even.

Installers always insist that the system will pay for itself over time and go to great lengths to demonstrate how, but they are no better at predicting the future than I am. The safe bet is to buy another $350 natural gas fired hot water tank. Your typical plumber, if called to fix solar hot water problem, is likely to be clueless. The cost of keeping that system running is going to be significant.

Likewise, cheap natural gas is also a major reason why investors are hesitant to fund a nuclear power plant which can run for half of a century but, like solar hot water, requires a big investment up front that will take a significant amount of time to pay off ...or not, depending on things like the price of natural gas.

So much for capital costs.

What other kinds of costs are involved? Nuclear power plants can be profitable for many decades. But nothing lasts forever. Our nuclear power plants are getting old and with age comes higher maintenance costs. Wind turbines and solar panels also get old, and don't last nearly as long as a nuclear power plant. Their day will come as well and somebody will pay a fortune to have worn out panels taken off their roof to the nearest landfill.

Wind

I'm less of a fan of wind than I am of solar, primarily because turbines too often get placed where they devastate local raptor and bat populations. Never mind what they do to natural landscapes.

Does wind also cost more than other alternatives? Google the term "wind too expensive." I stopped looking at 40 pages deep. Why else would investment in wind come to a halt with any suggestion that the wind subsidy should not be renewed yet again (five times and counting)?




Snippets from Bloomberg Sustainability:
The British government has set the industry a goal of reducing its costs to 100 pounds ($167) a megawatt-hour by 2020. New Energy Finance estimates it’s currently as high as $246, or 147 pounds, and is unlikely to meet the target.

“Big German companies have lost their cash-cows, because Angela Merkel said they have to close down their nuclear power stations,” Stamer said. “That’s where they earned their money that they could then go off and invest in offshore wind.” He said even reaching 6.5 gigawatts will “take a lot of work.”

New projects tend to be further from shore and in deeper waters. That means costs are rising, and utilities can no longer afford to shoulder the cost of projects themselves, said Ben Warren, an environmental finance partner at Ernst & Young.

Three utilities yesterday scrapped an expansion of the world’s biggest offshore wind farm in the Thames estuary, east of London. That capped three months when each of the six largest U.K. utilities retreated from marine energy projects...

“It’s either the cost because of the technical challenges or the environmental issues” that’s thwarting projects, Keith Anderson, chief executive officer of Iberdrola SA’s ScottishPower Renewables unit, said in an interview. “There’s a bit of realism that unless we can deliver these projects for a lower price, then it’s unrealistic to expect to continue to get political and government support...”

Prime Minister David Cameron’s government has set incentives for offshore wind through 2019, hoping to stimulate clean-energy jobs ...Those ambitions are being chipped away as developers better understand the costs of the projects. Utilities have canceled as much as 5,760 megawatts of planned capacity since Nov. 26, when RWE AG dropped its 1,200 megawatt Atlantic Array.


Wind (or grid tied solar for that matter) does not and cannot exist as a stand-alone power source. It has to be connected via the grid to natural gas power plants that can take over when the wind dies, otherwise it has no value at all. Because wind turbines are essentially a component of a gas turbine power plant, wind is not really fully renewable. The advantage of a hybrid (car or wind/gas turbine) is that it will use less fossil fuel. The disadvantage is the higher sticker price ($40K for a Volt).

Consider reading this well-sourced article: Wind Power Costs in U.S. Are Six Times Higher Than Claimed.

Bottom line; low carbon sources of electricity (nuclear, wind, and solar) presently cost more than electricity produced by natural gas (thanks to the present low cost of natural gas).

If nuclear energy deniers throw a party when a utility decides to close a nuclear power plant like Vermont Yankee because it presently can't compete with today's low natural gas prices, they think they are celebrating a victory for renewable energy. In reality, they are celebrating a victory for a fossil fuels.  Nuclear energy does not compete with renewables because it is used for baseload power.

Nuclear isn't more expensive than wind and solar. If these guys really could predict the future cost of any energy source, they would be worth billions by now. End of story.
 

6 comments:

  1. Anonymous7:38 AM

    I'd be careful making the economic argument without accounting for the total costs of the respective technologies. It is often claimed that nuclear is just too expensive and this may be true but not without being shown via full disclosure. That is, the fuel, operating, waste management, insurance, subsidies etc. costs should be included. Fuel costs can fluctuate for nuclear plants, operating costs can be substantial, long term waste management can be astronomical, insurance premiums are high, and the industry as a whole continues to be subsidized by taxpayers despite being mature and profitable. All of these boxes should be evaluated for nuclear alternatives, including fossil fuels, which are also mature and profitable as well as subsidized. The fact of the matter is that we do not know what the true costs of these things are because there's a special kind of math that gets done in order to obfuscate them and maintain the status quo rather than charting a course built upon attaining true sustainability. Indeed, Vermont Yankee closed because it was unable to compete with, among other things wind and natural gas, but it is also a very old, small, single unit plant. Similarly, Kewaunee in WI has also been shuttled for the same reason and Oyster Creek in NJ will be soon as well. Alternatives have a very compelling argument when it comes to their lack of fuel and waste management costs as well as their inherent environmental benefits. And there's also no reason to approach the argument as an either or one. We currently get about 10% of our energy from nuclear, about the same as we get from hydro and renewables combined. We get about 40% from coal and its a far more devastating practice than any of the others, e.g., mining decimates local habitats and the enormous amounts of waste product, including radioactive effluents present serious health and environmental concerns that go unchecked. There is no panacea, including nuclear, but if there is an argument to be made, an economic one is the right one to make but it must be done with full disclosure and some weighting for environmental benefit and sustainability.

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  2. Anonymous7:41 AM

    And keep in mind that the waste managements fees for nuclear are not currently included in the prices. Once the spent fuel and waste leaves the reactor, it goes from being a ratepayer's problem to a taxpayer's problem and there is currently no alternative to Yucca Mtn to store the stuff other than on surface lots at the plants, which isn't a very well thought plan either. The waste needs to be addressed.

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  3. Anonymous commenter said:

    "The fact of the matter is that we do not know what the true costs of these things are because there's a special kind of math that gets done in order to obfuscate them ... "

    This is true regardless of which side you are on. Right? The only part of the cost argument not subject to biased assumptions is what you paid to get the system up and running sans subsidies. It costs somewhere between three and five times more per unit energy produced to put solar on your roof than to build a nuclear plant. There is simply no denying that. Here is another study that shows the same result:

    http://thebreakthrough.org/index.php/voices/michael-shellenberger-and-ted-nordhaus/no-solar-way-around-it/

    That high upfront cost is what keeps investors at bay. This is the part of the cost argument that nuclear energy deniers concentrate on. However, the cost is so high for solar that even with subsidies that approach half of the total cost, few people are willing to spend tens of thousands. Both sides of the argument easily show their preferred source of energy will be more cost effective in the future by simply picking favorable assumptions about operating costs and prices. But nobody can predict the future. On the other hand, nuclear is the only source with a half-century long proven track record of providing competitively priced power.

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  4. Anonymous commenter said:

    "That is, the fuel ..costs should be included ...Fuel costs can fluctuate for nuclear plants..."

    This is even more true for wind and solar. When the wind dies or the sun does not shine, natural gas power plants turn on and begin consuming fossil fuels. Wind and solar are components of a natural gas hybrid power system. The cost of operating that hybrid system goes up along with the price of natural gas. It is simply untrue that wind and solar do not require the burning of fossil fuels to be viable.

    Anonymous commenter said:

    "...operating costs can be substantial..."

    Wind turbines last roughly half as long as a nuclear power plant. It can cost up to $10,000 to replace the inverter for a home solar panel system. In fact, home owners are typically warned to expect to replace it at some point, like a gas furnace or dish washer.

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  5. Anonymous5:50 AM

    I think you are making some presumptuous claims. The fact is that fossil fuel and nuclear projects entail an enormous amount of fuel and waste whereas wind and solar require only that which is necessary to produce the generators. The nuclear waste confidence ruling, for instance, demonstrates the lack of stability and clarity on the nuclear waste issue as well as the costs. Costs estimates are also not as clear as some claim. More often than not, the costs cited for nuclear are extrapolated from plants either built over 30 years ago or built elsewhere and then pegged against state of the art wind and solar projects and in all cases fail to subtract how much of these costs are represented by litigation alone. It is simply not an honest discussion if we continue to cherry pick circumstances and numbers. For instance, comparing decrepit nuclear plants vs. state of the art solar and wind or residential/small scale solar and wind to massive baseload nuclear and coal. And keep in mind that wind and solar, when paired with a storage or backup system, do compete with other forms, albeit at a higher cost. Suffice it to say that this debate has been completely distorted and confused by the various biases and special interests involved. There is no panacea, including nuclear or solar and wind but taken as a whole, we have enough resources and technological know-how to develop more sustainable energy policies and that is what the focus should be, not picking winners and losers.

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  6. Anonymous commenter said:

    "I think you are making some presumptuous claims"

    And I think you are making some presumptuous claims. Comments like that area waste of time, energy and space.

    "The fact is that fossil fuel and nuclear projects entail an enormous amount of fuel and waste whereas wind and solar require only that which is necessary to produce the generators."

    Your argument was made moot by a recent study by the NREL which demonstrated that renewables can't do it all. We need renewables and nuclear.

    See The "We Don't Need Nuclear Energy Because Renewables Can Do It All" argument

    Words like "enormous" have no precise meaning. When put into perspective, all of the waste generated by nuclear energy production in last half century would fill a football stadium a few feet deep. The fact that it is being stored in their own parking lots because anti-nuclear ideologues have stifled efforts for a government repository is all the evidence needed for how little waste it produces. A piece of nuclear fuel the size of an ashtray provides enough power for an average American for a lifetime.

    "The nuclear waste confidence ruling, for instance, demonstrates the lack of stability and clarity on the nuclear waste issue as well as the costs."

    We can all thank the anti-nuclear ideologues for the fact that we still don't have a National waste repository.

    "Costs estimates are also not as clear as some claim."

    That is as true for renewable energy enthusiasts as it is for other enthusiasts.

    "More often than not, the costs cited for nuclear are extrapolated from plants either built over 30 years ago or built elsewhere and then pegged against state of the art wind and solar projects and in all cases fail to subtract how much of these costs are represented by litigation alone."

    None of that statement is correct.

    "It is simply not an honest discussion if we continue to cherry pick circumstances and numbers. For instance, comparing decrepit nuclear plants vs. state of the art solar and wind or residential/small scale solar and wind to massive baseload nuclear and coal."

    Says the pot to the kettle ; )

    "And keep in mind that wind and solar, when paired with a storage or backup system, do compete with other forms, albeit at a higher cost."

    Affordable storage for wind and solar is a myth. Read:

    Pumped hydro storage will eliminate wind and solar intermittency ...really?

    "Suffice it to say that this debate has been completely distorted and confused by the various biases and special interests involved."

    This is true, and goes without saying, however, reality is there if you look for it.

    ReplyDelete

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