Sowell's Law Blog: The Truth About Nuclear Power

Subtitle: A Few More Reasons Nuclear Cannot Compete

This article discusses a few economic issues including project cancellations due to unfavorable economics, the desperation of reactor vendors, nuclear advocates tout low operating costs and ignore capital costs, nuclear utilities never ask for a rate decrease when building a new nuclear plant, and high nuclear costs are buried in a large customer base. Future articles will discuss nuclear safety, research into new forms of nuclear power, and the driving force behind countries that choose nuclear power in spite of its numerous and serious disadvantages.

Previously, the articles on The Truth About Nuclear Power emphasized the economic aspect by showing that (one) modern nuclear power plants are uneconomic to operate compared to natural gas and wind energy, (two) they produce preposterous pricing if they are the sole power source for a grid, (three) they cost far too much to construct, (four) use far more water for cooling, 4 times as much, than better alternatives, (five) nuclear fuel makes them difficult to shut down and requires very costly safeguards, (six) they are built to huge scale of 1,000 to 1,600 MWe or greater to attempt to reduce costs via economy of scale, (seven) an all-nuclear grid will lose customers to self-generation, (eight) smaller and modular nuclear plants have no benefits due to reverse economy of scale, (nine) large-scale plants have very long construction schedules even without lawsuits that delay construction, (ten) nuclear plants do not reach 50 or 60 years life because they require costly upgrades after 20 to 30 years that do not always perform as designed, (eleven) France has 85 percent of its electricity produced via nuclear power but it is subsidized, is still almost twice as expensive as prices in the US, and is only viable due to exporting power at night rather than throttling back the plants during low demand, (twelve) nuclear plants cannot provide cheap power on small islands, and (thirteen) US nuclear plants are heavily subsidized but still cannot compete. Links to previous articles are found at the conclusion of this article.

Cancellations Due To Economics

Several planned projects were cancelled due to unfavorable economics, including the South Texas Nuclear Project expansion. That project was to double the existing plant output by installing two more reactors. A Japanese firm made several cost estimates to the prospective owners, with each estimate higher than the last. At $17 billion, the vendor admitted they had not provided the final figure. The project collapsed. The cities of Austin, and San Antonio were approached as potential owners and customers, however Austin (wisely) said an emphatic NO. San Antonio signed on for a while, but finally said No also after no final project cost was to be had from the vendor.

Desperate Reactor Vendors

Reactor vendors are desperate to sell plants and subsidize new plants in UK, Turkey, and India, perhaps also in China. This was mentioned briefly in Part 11, which discusses the French nuclear industry. A French firm contracted with India to provide a multiple-reactor power complex, but had to agree to only 10 cents per kWh as the sales price (they asked for 16 cents) and had to sweeten the deal by financing the construction at only 4.8 percent interest over 25 years.

[Update - 6/24/2014: Russia's Rusatom also is desperate to sell nuclear plants and signed a sweetheart deal with Hungary to finance two new reactors - 80 percent of the construction cost at approximately 4 percent interest over 21 years, beginning after plant startup. "Hungary will be required to repay its debt in euros -- at variable rates of 3.95-4.95 percent interest -- over a term of 21 years, starting after the new blocks are commissioned." see link --- end update]

Bait and Switch

Nuclear proponents emphasize low operating costs but ignore high capital costs. This is like buying a new car that gets 1,000 miles per gallon. Sure, the operating costs would be fifteen gallons of fuel per year, or roughly $60 in the US at current prices. That is the price of one tank-full for most modern cars. But, the car payments would be ten times what a normal car would cost. Instead of $500 per month, the bank will charge $5,000 each month. Few consumers would choose such a car because they simply cannot afford to pay $5,000 per month for a car. Yet, this is exactly what nuclear proponents are advocating for their nuclear power plants. Even the older, paid-for plants cannot compete in today's and the foreseeable future's market on low operating costs.

Never a Rate Decrease

To the best of my knowledge, no utility has ever asked for a rate decrease to build a nuclear plant. If nuclear power could really be produced for 2 or 3 cents per kWh, one would expect that the customers would see their power bills decrease when the nuclear plants are built. Instead, high power prices are disguised by burying them in a huge customer base. Perhaps that is the reason that, again to my knowledge, nuclear plants are not merchant plants but are owned by the utilities themselves. A merchant plant would need to sell its power on a contract to the utility. That contract would necessarily have the price much higher to recover the capital costs and the operating costs.

Conclusion

The articles thus far have provided at least 20 reasons why nuclear power plants are uneconomic and therefore should not be built nor operated. The main issue is the use of nuclear fuel pellets to provide heat for the water to boil to steam. All else follows from that. The plants are huge to obtain economy of scale, they are more costly to increase safety, they have larger equipment and pipes because more steam flow is required for the same output of electricity, prices must be much higher but are disguised or buried among a huge customer base, they use too much water for cooling, and even France has multiple problems even after massive subsidies for decades, plus many, many other reasons described in the first 13 articles.

Previous articles in the Truth About Nuclear Power series are found at the following links. Additional articles will be linked as they are published.

Part One – Nuclear Power Plants Cannot Compete

Part Two – Preposterous Power Pricing if Nuclear Power Proponents Prevail

Part Three – Nuclear Power Plants Cost Far Too Much to Construct

Part Four – Nuclear Power Plants Use Far More Fresh Water

Part Five – Cannot Simply Turn Off a Nuclear Power Plant

Part Six – Nuclear Plants are Huge to Reduce Costs

Part Seven -- All Nuclear Grid Will Sell Less Power

Part Eight – No Benefits from Smaller Modular Nuclear Plants

Part Nine -- Nuclear Plants Require Long Construction Schedules

Part Ten -- Nuclear Plants Require Costly Upgrades After 20 to 30 Years

Part Eleven - Following France in Nuclear Is Not The Way To Go

Part Twelve - Nuclear Plants Cannot Provide Cheap Power on Small Islands