More bad news for those who still believe that we’re about to enter a nuclear power renaissance, rather than the full-scale nuclear-powered retreat from those halcyon days of late 2007 that we’re actually seeing....and good news for those who believe in a sustainable, carbon-free, nuclear-free energy future.
The California Energy Commission (CEC) has just issued a new draft report on expected energy costs from various technologies, projected to 2018—just about the time any of the proposed new nuclear reactors could come online.
And the results are stunning.
Every renewable energy technology examined is projected to provide electricity cheaper than nuclear power by 2018, even giving nuclear the benefit of the doubt on construction costs.
Let me reiterate: renewable energy of any and every kind will be cheaper than nuclear power by the time any new nuclear reactor can come online, according to the California Energy Commission’s projection.
Let’s look at some specifics. First, note that this report does not address energy efficiency measures, which remain the cheapest, fastest, safest and cleanest means at reducing carbon emissions. Rather, the report looks only at the comparative costs of possible new central station electricity generation facilities in California.
The report lists (on page 18, for those following along) projections for electricity costs given "overnight" or "levelized" costs of new generating facilities—this means the costs for new facilities if they could be built overnight—i.e. if they did not include financing and other costs.
According to the report, in California, in 2018 biomass will run about 16 cents/kilowatt-hour (kwh). Natural gas combined cycle plants will continue to be competitive (though not renewable nor carbon-free) at 16-17 cents/kwh. But on-land wind power will be only about 11-13 cents/kwh. Off-shore wind is more expensive, about 21.5 cents kwh. Solar stays expensive at 29-30 cents/kwh. But nuclear power’s costs, for a merchant (or unregulated) nuclear plant—the type that would be built in most of the U.S.--are simply astonishing, at 34+ cents/kwh. Even new reactors from regulated utilities, which enjoy some financial benefits and which exist primarily in the southeast US, are projected at a very high 27 cents/kwh.
Moreover, these nuclear costs assume overnight construction costs of only $3950 per kilowatt of electricity capacity. Constellation Energy, which wants to build a new nuclear reactor in Maryland through its subsidiary UniStar Nuclear, testified under oath this year before the Maryland Public Service Commission that its proposed Calvert Cliffs-3 reactor would cost about $10 billion in overnight costs, or more than $6,000/kw for its 1600 MW reactor—50% above California’s projection. Moody’s and Standard & Poor’s both have projected nuclear construction costs at $7,000/kw or more, as did Areva in a recent failed bid to build two new reactors in Canada.
Adding 50% to CEC’s projection to account for the more realistic cost estimates for new nuclear reactors would put electricity from them around 40 to 51 cents/kwh—even further outside the bounds of rational electricity costs.
The reality is that nuclear power already has been priced out of existence. No Public Service Commission is voluntarily going to raise rates to allow such costs, even at CEC’s conservative estimates. And for merchant plants, no large consumer of electricity is going to be willing to pay such rates. No amount of taxpayer loan guarantees or other subsidies can change the basic economic reality. Anyone foolish enough to attempt to build a new nuclear reactor given the economic reality will go bankrupt—and will deserve to. The nuclear "resurgence" is dead on arrival.
People may quibble with the report’s estimates of renewable electricity costs, and especially how they may apply to states other than California. Solar power, for example, should be cheaper in California than most other states, meaning that solar may not be cost-effective in most of the country even by 2018, although recent advances in solar technology mean reduced costs, and the report does predict a rapid decrease in solar costs.
But off-shore wind power should be much cheaper along much of the East Coast than in California—which does not have substantial off-shore wind resources—meaning that the disparity between nuclear and off-shore wind should be even more pronounced in the East.
The nuclear power "renaissance" is imploding of its own economic weight. Add to that the ongoing problems of radioactive waste, security and safety issues, nuclear proliferation, environmental destruction from uranium mining (and typical industry over-reaching of wanting to mine uranium next to the Grand Canyon, of all places), routine radiation releases and leaks of radiation at existing reactors (most recently radioactive tritium releases at the Oyster Creek, New Jersey reactor), and you get an industry without a future and desperately attempting to even remain in the present.
The California Energy Commission is not a band of anti-nuclear activists; they’re serious, dedicated public servants looking for the best possible energy future for California. Their periodic reports are of benefit to the entire country. If every state public service commission were as thorough in their assessments of the future costs of generating capacity, our electricity future would look a lot different, and would be a lot greener and cleaner than it is now.
Meanwhile, the bad news for the nuclear "resurgence" continues to pile up.
Last week, NIRS announced that the nuclear industry won only one of at least ten state legislative battles held during 2009. The lone industry victory was instituting a controversial Construction-Work-in-Progress law in Georgia, which allows a utility to collect money from ratepayers to build a power plant, rather than wait until the traditional "used and useful" standard.
In six states: Illinois, Kentucky, Minnesota, West Virginia, Hawaii and California, efforts to overturn state bans or restrictions on new reactor construction were defeated. A similar industry-backed effort in Wisconsin is likely to be defeated this Fall.
In Missouri, a legislative battle led by AmerenUE to overturn that state’s prohibition against CWIP also failed, leading directly to the cancellation of the proposed Callaway reactor.
In two states, Arizona and Indiana, efforts to declare nuclear power a "renewable" resource failed.
More recently, the Tennessee Valley Authority cancelled three of the four reactors it had announced it would build in northern Alabama.
Last weekend, Areva wrote off another billion dollars in losses on its flagship EPR reactor in Finland, which is now nearly 75% over-budget. More tellingly, Areva no longer has a completion date estimate for the project, which is three years behind schedule after only four years of construction. And Areva is threatening to stop work on the project unless its Finnish utility partner ponies up more money—despite the fact that Areva is building the reactor under a fixed-price contract.
And this week, Duke Power announced that it is delaying its two proposed Lee reactors in North Carolina by up to three years.
If this is a "resurgence," what would a retreat look like?