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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?

Originally posted to nirsnet on Fri Sep 04, 2009 at 08:40 AM PDT.

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Comment Preferences

  •  well, the US may not be (3+ / 0-)
    Recommended by:
    nextstep, LookingUp, Mother Shipper

    the rest of the world (namely China) probably will go the nuclear method.

    (+0.12, -3.33) I hate to say it, but Bill Maher was right.

    by terrypinder on Fri Sep 04, 2009 at 08:45:47 AM PDT

    •  rest of the world? (1+ / 0-)
      Recommended by:

      Well, if by the rest of the world you mean China, India & Russia, perhaps, although even China is reported to be scaling back nuclear plans. But the rest of the world? Not likely.

      •  No they actually announced they were (2+ / 0-)
        Recommended by:
        bryfry, LookingUp

        expanding from 72 GWs to 80 GWs of new nuclear online by 2020. 14 plants are under construction.
        #Korea is expanding it's nuclear grid to take the country from 40% nuclear it is now to 60% in 10 years;
        #Japan continues to build more nuclear; # as does France
        #Finland, which despite the set back for the EPR in terms of budget and schedule, wants to build two more and put out solicitation bid tender offers;
        #Russia scaled back the level of projected construction but did not actually cancel plans, just delaying them as demand has fallen for power;
        #Bulgaria voted to build two more units;
        #Italy is taking offers for new EPRs there;
        #Britain has decided to go nuclear;
        #Sweden reversed it's phase out of nuclear;
        #S. Africa has scaled back a lot their previously ambitious plans but has already budgeted money for the first few new nukes;
        #Tunisia, UAE, Malaysia, Indonesia, Vietnam, Jordan, Egypt, Libya, Algeria, Iran, Belorussia and Ukraine have all started or restarted & expanding their nuclear programs.
        #Brazil approved doubling their nuclear energy.

        5 years ago only China, Korea, Japan and Russia had ongoing serious nuclear programs.

        As for California, every person on the CEC is known for their anti-nuclear sentiments. Again, they had lawyers not engineers construct this "report". The result: thousands of new gas fired, CO2 spewing CCGTs going on line. Including the one JUST completed in Antioch by PG&E, 1800 MWs planned for contra costa county ALONE, another 1200 MWs on the CEC docket for the rest of northern California and thousand more planned for S. California. No nukes equals more fossil fuel. One wonders what the tie in is?


        Dr. Isaac Asimov: "The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!' but 'That's funny ...'"

        by davidwalters on Fri Sep 04, 2009 at 10:29:58 AM PDT

        [ Parent ]

        •  you're such an incurable nuclear optimist, David (1+ / 0-)
          Recommended by:

          but nuclear power is too expensive everywhere, not just the U.S.

          China is building some nukes, granted, and likely will build more; not as many as predicted a few years ago however. So will India, and perhaps you're right about Korea, I don't know much about that.

          France has one reactor under construction (20% over budget) but since they're 80% nuclear already, diversification of supply is a greater need for them.

          Finland: more units are not going to happen given the problems with this one.

          Russia: you're on target.

          Bulgaria: new govt says it can't afford Belene and its rising costs, yesterday said it will make a decision by Nov 1 on whether to abandon the project.

          Italy: nothing under construction, and once Berlusconi is gone, no more impetus to build.

          UK: nothing under construction

          Sweden: yes, reversed their phaseout, but has no plans for new reactors.

          Ukraine: has no money for new reactors; same as Belarus, even tho both would like them. In Ukraine, power would be for export, not for nation's electricity needs (my wife is Ukrainian, I go there a lot...).

          The rest of the countries have never had nuclear commercial nuclear programs, so it would be hard for them to "restart" them. And the same economic realities apply to them--no one needs electricity at 34 cents kw/h.......

          There are lots of reasons the nuclear "resurgence" should fail; but simple economics is the reason it is failing.

          And, as I've said before, and said in this piece, we are for a nuclear-free, carbon-free energy future--no fossil fuels need apply....

          •  And you are "projecting" not based on any (1+ / 0-)
            Recommended by:

            actual movement but wishful thinking. As it takes time to develop a program around nuclear energy you will see more nuclear energy. Every objective reporting sees this from the US Dept. of Energy to the IAE group, etc. Will it be an increasing % or a lower % than exists now? That is a real debate, but clearly there is a Renaissance that is only beginning.

            China is building 'some'??? How about 14. "Not as many as previoulsy"?:

            "By Victor Wang Shanghai. May 5. INTERFAX-CHINA - China is increasing the pace of its nuclear energy development to maintain economic growth and curb environmental damage from thermal power plants, experts told Interfax.

            In late March, China's National Energy Agency (NEA) raised the country's 2020 nuclear power target to 75,000 megawatts (MW) of generation capacity, nearly double the initial target that it set in 2007. The government aims for nuclear power to account for 5 percent of China's total generation capacity and 8 percent of its total power output by 2020. "

            I can't find where they announced any roll back, if you now, I'd be really curious, can you post a link? As I noted they went from 72 to 80GWs recently...and that's by 2020. Double that by 2030. By the same date they may be up to 300 GWs of hydro power, making non-carbon power (nuclear and hydro) about half their generation.

            I didn't even give a complete list. There are major set back and major advances in nuclear. I will not predict a total increase as a % of generation based on the Green-inspired moves (meaning fossil fuel interests) to get natural gas an increasing percentage of generation world wide. There is more money going into NG than almost any energy source if you include prospecting, drilling, pipeline and power plant construction, LNG terminals, etc. SCARY.


            Dr. Isaac Asimov: "The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!' but 'That's funny ...'"

            by davidwalters on Fri Sep 04, 2009 at 11:25:42 AM PDT

            [ Parent ]

        •  Yeah, this is the same California (1+ / 0-)
          Recommended by:

          where electricity costs 35% more than the national average.

          It's the same California that pays more for electricity than everywhere in the US but Hawaii, Alaska, DC, New York, New Jersey, and most of New England.

          It's the same California that imports more electricity from other states than any other state.

          It's the same California that suffered an energy crisis in 2000 and 2001 that was characterized by electricity price instability and four major blackouts affecting millions of customers.

          And don't forget that it's the same California that was easily fleeced by Enron, a company that was heavily invested in renewables.

          Frankly, I'm amazed that anyone would pay attention to anything published by California Energy Commission. With California's dismal track record, how can anyone take these clowns seriously?

          An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup.
          -- H. L. Mencken

          by bryfry on Fri Sep 04, 2009 at 11:17:05 AM PDT

          [ Parent ]

          •  same California (1+ / 0-)
            Recommended by:

            Actually, California rates are higher than DC.....

            But it's also the same California that is the most energy efficient state in the nation...with a program that other states could and should adopt....

            And it's the same California where voters chose to close a dangerous operating reactor and meet new power needs through renewables and efficiency....

            And while Enron had some renewables, their real business was manipulating energy prices, and yeah, California got screwed by them (and Dynegy and others), but got out of it by taking temporary energy conservation and permanent energy efficiency measures....

            What's your idea of the ideal state? Florida or Georgia, where ratepayers are being told to act as bankers for the nuclear power industry and front the money for new reactors their utilities can't raise on their own?

            •  Let's see ... (1+ / 0-)
              Recommended by:

              As of May 2009:

              13.69 cents/kWh - DC
              12.65 cents/kWh - California
              11.61 cents/kWh - Florida
              08.62 cents/kWh - Georgia

              My idea of an ideal state is certainly not California. It has maintained the illusion of energy efficiency by aggressively driving industry out of the state. Even stubborn Toyota is getting out:

              Toyota Motor Corp. plans to close its oldest U.S. auto plant, New United Motor Manufacturing Inc., a venture that once symbolized Toyota's zeal to learn the art of automaking in America.

              Toyota's board decided to shut the Fremont, Calif., plant in March. The plant builds the Toyota Corolla and Tacoma.

              Toyota has never closed an American factory and has spent the past 25 years carefully avoiding the political and public image stigma of plant closings and worker layoffs.

              That was the last auto plant in a state that used to have eight such plants just two decades ago.

              California voters might think that they are able to "meet new power needs through renewables and efficiency," but that doesn't build anything substantial. California is simply an example of shameless outsourcing and a kind of energy colonialism, where they import coal-generated electricity from Nevada, New Mexico, Utah, Colorado, and Montana; nuclear-generated electricity from Arizona; and natural gas from the Rocky Mountains, the Southwest, and western Canada, which is used to produce 43% of the electricity that CA generates in the state and three times the amount of electricity produced by all non-hydro renewables.

              An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup.
              -- H. L. Mencken

              by bryfry on Fri Sep 04, 2009 at 12:37:03 PM PDT

              [ Parent ]

              •  Can we agree that this is a silly way (0+ / 0-)

                to make a point about nuclear -- pointing out how much people pay in DC, California, Florida, and Georga as a whole?

                DC: ?% nuclear
                California: 13% nuclear
                Florida: 12% nuclear
                Georgia: 29% nuclear

                Far from a majority.

                •  Not the point (0+ / 0-)

                  that I was trying to make. I merely wish to demonstrate that the state of California leaves much to be desired when it comes to energy planning. Their pattern for the past several decades lies somewhere between incompetence and schizophrenia.

                  Besides, dependence on nuclear power is not a good indicator of the price of electricity. A much better correlation can be obtained by comparing price of electricity to dependence on natural gas. This is especially true for regions where wholesale electricity markets are managed by RTO's like PJM, since the amount paid to all generators depends on the price set by the last unit to be dispatched, which is never a nuclear plant. In times of high demand, this price is set by the costs of natural-gas-fired plants or even oil-fired plants. Thus, expensive natural-gas plants set the price, and the coal and nuclear plants reap in a high price with low marginal costs. If this occurs too often, then it is a sign that there is insufficient baseload power, a result of poor energy planning. This is bad for the consumer, but I suppose that it does encourage conservation.

                  An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup.
                  -- H. L. Mencken

                  by bryfry on Fri Sep 04, 2009 at 02:19:17 PM PDT

                  [ Parent ]

  •  anyone care to comment (1+ / 0-)
    Recommended by:

    on China and rare earth minerals?

    "But I don't want to go among mad people," said Alice. "Oh, you can't help that," said the cat. "We're all mad here." - Lewis Carroll

    by mieprowan on Fri Sep 04, 2009 at 11:53:33 AM PDT

  •  sorry, my bad, you're right on China (0+ / 0-)

    I apologize, you are right, or at least closer than I was, on China....

    From World Nuclear Status Report 2009, which just came out last week...

    "Plans for the nuclear sector also entail major expansion. The current plan envisages nuclear power will increase from the current level of 8.4 GW to 40 GW by 2020. This would require the
    completion of all of the 16 reactors under construction (15.2 GW) plus a further 15 or so over the next 11 years. Various government departments have suggested that this target should be increased,
    including a call from the NDRC in May 2007 for 160 GW of nuclear by 2030 and a June 2008
    projection from the China Electric Council for 60 GW by 2020 while the State National Energy
    Administration was reported to be proposing a target of 70 GW by 2020. However, even such an
    ambitious target would only enable nuclear energy’s contribution to the primary energy supply in
    2020 to reach 3%."

    The outlook in most other countries is not so optimistic for nuclear....

    Link to report.

    •  No biggee...i follow china closely. (0+ / 0-)
      It's the country to watch for all things good and evil in the world of energy.

      Dr. Isaac Asimov: "The most exciting phrase to hear in science, the one that heralds new discoveries, is not 'Eureka!' but 'That's funny ...'"

      by davidwalters on Fri Sep 04, 2009 at 04:32:36 PM PDT

      [ Parent ]

  •  How do they predict that? (1+ / 0-)
    Recommended by:

    ... the [CEC] report does predict a rapid decrease in solar costs.

    We don't have to "predict" a rapid decrease in solar costs. That's happening now, thanks to the "Spanish method" for reducing the price of solar:

    The photovoltaic market was overwhelmed with excess panels, reducing prices. Demand from feed-in systems begun by Italy and France helped, but did not soak up all the excess supply. Spain's solar industry lost more than 20,000 jobs.

    The downturn hit many manufacturers hard, like Germany's Q-Cells, which announced the layoff of 500 employees yesterday. Prices for solar panels are at about half what they were last year, selling for about $2.40 a watt.

    Long story short: Spain promises to pay almost six times the market value for electricity from solar for the next 25 years. Investors rush in to capitalize on the tax-payer-funded scam. The Spanish government realizes that it will not have the money (approximately $26.4 billion) to pay for this ridiculous idea and alters the tariff. The artificially created boom market for solar panels dries up overnight, leaving manufacturers high and dry. Layoffs ensue.

    This farce is so thoroughly riddled with greed and incompetence that it's surprising that it didn't take place in California. Nevertheless, I'm sure I can guess the lesson that the California Energy Commission took away from all of this: the cost of solar panels is decreasing by 50% per year. ;-)

    An idealist is one who, on noticing that a rose smells better than a cabbage, concludes that it will also make better soup.
    -- H. L. Mencken

    by bryfry on Fri Sep 04, 2009 at 12:41:22 PM PDT

  •  What works (or doesn't work) in California (1+ / 0-)
    Recommended by:

    doesn't extrapolate to the rest of the country. To the extent California has Class 5 winds to tap into (which the report believes will be exploited by turbines that achieve a 43% capacity factor...seems optimistic), fine. But there are no Class 5 on-shore winds in Georgia, Florida or the rest of the southeast. And other states could squeeze their energy intensive heavy industries like auto factories out too to lower their per capita electricity consumption, although California seems more willing to allow its industrial base to erode than others might.

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