Home > Environment > Uranium exports: bonanza or bust?

Uranium exports: bonanza or bust?

February 23rd, 2013

Note: The usual sitewide ban on discussions of nuclear power is lifted, for this post only

Queensland’s ban on uranium mining was lifted last year, and a committee is due to report soon on the conditions under which mining might be restarted. As recently as a year ago, the prospects for uranium exports looked bright, despite the Fukushima disaster. In March last year, the Bureau of Resource and Energy Economics predicted “prices close to $100 a pound between now and 2015, rising to $124 in 2016 and $141.6 in 2017, in constant 2011-12 Australian dollars.”

In reality, however, the price has fallen to $US43/pound in early 2013 and looks set to decline further. Looking ahead, the future of nuclear power looks bleaker than at any time since the industry began. That’s bad news for the global climate – cheap and safe nuclear power would be the ideal replacement for coal if it could be delivered – but there is no benefit in denying reality

It’s now clear that the “nuclear renaissance” is dead in the US. There are four plants currently under construction, behind time and over budget as usual. No more are planned, and with two plants already closing, it seems clear that nuclear power capacity is going to decline. It’s fashionable to blame cheap gas for this, but that hasn’t stopped huge growth in wind and solar, neither of which is as heavily subsidized as nuclear. It’s even more silly to blame the opponents of nuclear power, who have been both quiet and politically marginal in the US, as is evidence by the bipartisan support for nuclear loan guarantees.[1]

The situation in Europe, and of course in Japan, is even worse. Again, and despite the absence of cheap gas, the economics simply don’t stack up. George Monbiot, who famously became an advocate of nuclear power *after* Fukushima, has reluctantly concluded that “for now, the facts are against me”.

The great hope for the future of nuclear power is, of course, China[2]. Given its rapid growth, China is in a position to place a bet on every horse in the energy race, including nuclear. But, while its plans for renewables have been steadily upgraded, China’s nuclear plans were scaled back substantially after Fukushima.

It seems likely that, with higher safety standards, the Chinese nuclear program (until now characterized by on-time and on-budget delivery, but probably with compromised safety) will start to experience construction costs and delays comparable to those that have been the uniform experience of the developed world. If not, there is still a chance for nuclear power in the future. But the establishment of a track record of safe construction and operation in China will take at least a decade, which means that any global renaissance won’t start delivering benefits until after 2030.

Most of these negative outcomes could have been, and were, predicted on the basis of 20th century experience with nuclear power. In this context, it’s striking that rightwingers who want to excuse anti-science attitudes on their side so often point to the anti-nuclear stance of many (not all) on the left as an example of leftwing anti-science.

The opponents of nuclear power have been proved right on the big question of whether cheap, safe and clean nuclear power can be delivered in developed countries. Perhaps some were right for the wrong reasons. But on this issue, as on so many others, the clearest examples of magical (and therefore anti-scientific) thinking are found among those rightwingers who continue to insist, against all the evidence, that nuclear power represents an obvious solution to our problems, and that the only obstacle to its success is the unreasonable opposition of environmentalist.

Coming back to the original quesiont, the price of uranium boomed in the early 2000s, after supplies derived from nuclear stockpiles were exhausted. But the current decline looks set to continue for a long time. Unless new mines are profitable at prices of $40/tonne or less, they will probably be uneconomic.

fn1. Of course, news like this doesn’t help (H/T David Adamson).

fn2. BREE also mentions India and Russia. But given the long history of lax construction standards in both countries (a problem China is at least addressing), it seems unlikely that either of these countries will serve as a model, or that they can manage a rapid expansion without another disaster, perhaps not on the scale of Chernobyl or Fukushima, but enough to derail the whole process.

Categories: Environment Tags:
  1. David Irving (no relation)
    February 25th, 2013 at 11:52 | #1

    quokka, I think what Prof Q is getting at is that right-wingers have consistently used nuclear as cover for doing nothing about climate change.

  2. quokka
    February 25th, 2013 at 12:13 | #2

    @John Quiggin

    It’s fashionable to blame cheap gas for this, but that hasn’t stopped huge growth in wind and solar, neither of which is as heavily subsidized as nuclear.

    The US Congressional Budget Office does not agree with you about subsidies in it’s March 2012 report “Federal Financial Support for the Development and Production of Fuels and Energy Technologies”

    Figure 1 shows the recipients of tax preference support by technology since 1977. Prior to around 2007, fossil fuels dominated, and after about 2007, renewables dominated. In comparison nuclear has, for decades, received almost nothing. In terms of subsidy per unit of energy produced, it sure looks like nuclear drew the short straw.

    In terms of direct DOE support for R&D etc, a paper from the US Congressional Research Service titled “Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, and Energy Efficiency R&D” gives the following figures in 2012 dollars for the period 1978-2012

    Nuclear Energy 46.8 billion
    Fossil Energy 32.2 billion
    Renewable Energy 20.9
    Energy Efficiency 18.6

    Yes, nuclear has received the most, but far less per unit energy produced than renewables and just $1.3 billion average per year over the last 35 years. That is a pittance compared to current renewables subsidies which in 2011 according to the first reference were about $15 billion in 2011 alone in tax preferences.

    The claims about huge nuclear subsidies look more than a little shaky and more like a meme than fact.

  3. quokka
    February 25th, 2013 at 12:28 | #3

    David Irving (no relation) :
    quokka, I think what Prof Q is getting at is that right-wingers have consistently used nuclear as cover for doing nothing about climate change.

    I dunno about that. The real loonies deny the existence of the problems of climate change, so they don’t need nuclear or anything else to “solve” it.

  4. TerjeP
    February 25th, 2013 at 12:37 | #4

    While thorium is cheaper than uranium, fuel is only a tiny portion of the current cost of nuclear power and is likely to reduce further due to lack of demand. The cost of electricity from thorium reactors is going to be about the same as from uranium reactors, but this will only be after the very large development costs for thorium reactors are paid.

    Ronald – thorium is more abundant to uranium but this isn’t the prime selling point of a molten salt thorium reactor. The perceived advantage is a huge reduction in construction cost. For example the containment building is around 1000th the size of the containment building on a light water reactor. That’s a lot of concrete that does not need to be paid for during construction. And there are many other savings to be had.

  5. Katz
    February 25th, 2013 at 12:40 | #5

    I think it is more true to say that sections of the right use nuclear power as a stalking horse the talking point goes something like this:

    “If you climate alarmists were sincere in your desire to save the world from the alleged (though apocryphal) effects of AGW then you would be all unfavourable of using cheap, renewable, non-polluting nuclear power. But you don’t, you pack of latte sucking phoney pseudos. If NASCAR wasn’t on Foxtel in my Home Theatre, I’d drive to Brunswick in my SUV with my beloved Bushmaster …”

  6. TerjeP
    February 25th, 2013 at 12:41 | #6

    OK, I left a loophole and TerjeP exploited it. By “commercial” I meant coverage against the costs of foreseeable consequences of failure. It is notorious that the foreseeable costs of consequences of the failure of a nuclear facility are so huge that these costs are not covered by commercial insurance companies and are in the US indemnified by the provisions of the Price Anderson Act (1957).

    I’m not here to defend against the Price Anderson act. However the reality is that no industry can insure agains all foreseeable consequences.

  7. Katz
    February 25th, 2013 at 12:52 | #7

    And no industry apart from nuclear power generation has a foreseeable consequences of failure as immediately and catastrophically damaging to the assets and interests of the neighbours of a plant. Indeed, the concept of neighbour has to expand almost to the scale of tautology in the case of nuclear plants.

    The framers of the Price Anderson Act understood this perfectly. And the largest US insurance companies concurred in this assessment when they explained to the Eisenhower Administration why they refused to take on the risk.

  8. derrida derider
    February 25th, 2013 at 13:22 | #8

    John’s right – well-designed and well-managed reactors are very safe but very expensive, and the only way they can be made less expensive is Soviet attitudes to design and management. True, different technological apporoaches just might change that, but I wouldn’t put money on it. The proof a a technology’s viability is in the commercial pudding. Most of these newer technologies (eg thorium) have been kicked around for a long while now yet no-one has yet managed to commercialise them.

    Thank goodness market mechanisms usually eventually work – lo and behold, once natural gas started to get expensive it was a mere couple of decades until someone worked out a way to get lots more cheaply, and luckily in a relatively environmentally friendly way too (certainly compared with open cut coal and with tar sands). Given that natural gas is a direct and versatile substitute for both coal and oil and its emission intensity is much less, this is probably a bigger boon for climate control than either nuclear power or cheaper solar panels will ever be.

    It gives more support for the idea that far the most effective way in the long run to limit carbon emissions is just to price them properly and let the market do the rest.

  9. quokka
    February 25th, 2013 at 13:35 | #9

    Katz :
    And no industry apart from nuclear power generation has a foreseeable consequences of failure as immediately and catastrophically damaging to the assets and interests of the neighbours of a plant. Indeed, the concept of neighbour has to expand almost to the scale of tautology in the case of nuclear plants.

    Sorry, just not true. Ever heard of Bhopal, thousands dead and many thousands with permanent damage to their health. Or Banqiao dam disaster with deaths estimated at 171,000. Or ever so clean and safe gas in the San Juanico disaster with at least 500 dead and ten times that many badly burned.

    Number killed by the Fukushima nuclear accident: zero. Number who received medical treatment for radiation dose: two or three workers who were not wearing the correct protective boots while working in a turbine hall flooded with radioactive water. Symptoms – similar to severe sunburn with no long term adverse effects expected.

    Want to get into a debate about the ethics of inconvenience and possible hardship of evacuation rather than death?

    By the way, it is estimated than 40-80 million people have been forced from their homes over the history of hydro power. Many received little or no recompense.

    As for geographical boundaries on possible harm, the only boundaries to the harm of carbon pollution are planetary.

  10. Hermit
    February 25th, 2013 at 13:40 | #10

    The question of indemnity for major accidents is a bit like guaranteed loan defaults .. the leading example is not nuclear. In Australia the biggest get-of-jail card will be for oil major Chevron after they have sequestered 120 Mt of CO2 in brine aquifers under Barrow Island WA. That CO2 will be from unburnt natural gas, separated by zeolite sieve. If that CO2 rushes up to the surface a la Lake Nyos, Cameroon the combined WA and Australian governments will pay all damages.

    If all the CO2 escapes to the surface the carbon tax would be 120m X $23 = $2.76 bn. I’d say a precedent has been set for an Australian version of Price Anderson. That other contingent liability of reactor site decommissioning is seldom discussed these days perhaps because it is under control. Electricite de France for example has $52 bn set aside for this purpose.

  11. Katz
    February 25th, 2013 at 13:40 | #11

    Tell it to State Farm, Quokka. By your figuring, insurance companies are denying themselves a mountain of profits.

    As I said, one of my major objections to nukes would dissipate if only those insurance companies grew a set.

  12. February 25th, 2013 at 13:41 | #12

    Terjp, a molten salt thorium reactor and a molten salt uranium reactor is basically the same thing. And both have the drawback of not exisiting. If you want to invest your money in building a prototype of either sort, and if that works out then build a commercial reactor prototype, and if that works out then a commercial reactor, go right ahead. But I think I’d rather keep my money in my pants.

  13. quokka
    February 25th, 2013 at 13:54 | #13

    Katz :
    Tell it to State Farm, Quokka. By your figuring, insurance companies are denying themselves a mountain of profits.
    As I said, one of my major objections to nukes would dissipate if only those insurance companies grew a set.

    You really have no sense of proportion do you? The state is always and without exception the insurer of last resort. There is absolutely nothing wrong with that in principle if the social benefits outweigh the potential, though mostly not actual, cost. Deny that and you might as well join the tea party types.

    Jeez, the state effectively provides health insurance in Australia. What is the problem with that?

  14. Katz
    February 25th, 2013 at 14:00 | #14

    Well, there we have it. Statists and libertarians locked in a lustful embrace indulging in mutual nuclear frottage.

    Who wants pick of the litter?

  15. TerjeP
    February 25th, 2013 at 14:14 | #15

    Ronald Brak :
    Terjp, a molten salt thorium reactor and a molten salt uranium reactor is basically the same thing. And both have the drawback of not exisiting. If you want to invest your money in building a prototype of either sort, and if that works out then build a commercial reactor prototype, and if that works out then a commercial reactor, go right ahead. But I think I’d rather keep my money in my pants.

    No real argument with that. Although such a reactor did operate for several years at the end of the sixties it was never commercialised. The Chinese now have a major team working on developing such a reactor for commercial use and several private interests are also working on it. But yes the proof is in the pudding. My main concern would be that the state remove perverse barriers such as some of the inapplicable licensing issues, and that potential investors be at least aware of the technological possibility.

    Given an MSR the virtue of thorium over uranium is I accept more marginal. But thorium still seems to make more sense given the reduced refinement requirements.

  16. Katz
    February 25th, 2013 at 14:14 | #16

    Quokka appears to be incapable of making an intelligent distinction between indemnifying/underwriting nuclear power and nationalised health care.

    It’s simple Quokka. Private health insurers would be happy to offer insurance to all for a price. Private nuclear insurers don’t exist because they don’t know how to cost their product.

    That radical difference shouldn’t be too difficult to understand.

  17. Sam
    February 25th, 2013 at 14:27 | #17

    @derrida derider
    I don’t know why you think cheap solar won’t contribute meaningfully to carbon abatement. Right now it doesn’t, because it’s not clearly cheaper than alternative sources of electricity. Once the price drops sufficiently though, everyone who’s legally allowed to is going to install a rooftop system. Once that happens, central generators won’t make any money during the day.

  18. John Quiggin
    February 25th, 2013 at 14:34 | #18

    @quokka

    What Katz said

  19. quokka
    February 25th, 2013 at 14:34 | #19

    Katz :
    Well, there we have it. Statists and libertarians locked in a lustful embrace indulging in mutual nuclear frottage.
    Who wants pick of the litter?

    I am a leftist if you don’t mind. The use of the term “statist” is a device use by extreme right wing anarchists (otherwise known as libertarians) in an attempt to remove the “political” from political economy, to remove class from society in the dominant ideology.

    If you want to go along with that, do so, but put your cards on the table. If you do not want to go along with that then adopt a principled approach to the climate/energy problem and not getting into bed with all and sundry in the crude against the nuclear “evil”.

  20. Greg vP
    February 25th, 2013 at 16:00 | #20

    @quokka

    Whatever the merits of the Decc paper, and IIRC they have been disputed, there are a couple of points that demand to be brought forward.

    From an investor’s point of view, an investment in nuclear must surmount a higher hurdle rate of return than other energy investments because it is at greater risk of delays of unknowable length.

    Decc may or may not have taken this into account in their LCOE estimates, but there is a further factor which Decc almost certainly has not priced in. When demand is flat and expected to fall, the hurdle rate must rise further still for “lumpy”, long lead-time, long-lived investments such as nuclear and coal.

    When demand is growing, a potential investor can be assured that the plant will produce at capacity sooner or later, and do so for most of its life, thus earning back the investment.

    When demand is shrinking, this assurance can no longer be given – a period of high prices may accelerate efficiency investment by consumers. The rate of efficiency improvement is anyway quite variable, and it may accelerate of its own accord during the life of the plant. Either way, the profitability of the investment is more doubtful than when demand is rising.

    (Since we have had continuous population growth for eight generations, and energy demand growth for almost as long, we have forgotten that we have had this rising tide under our boats. It’s just taken for granted, part of the invisible background of investment decisions. Now the tide is on the ebb in the west, but I don’t think many have noticed. By 2030, it will be ebbing in China also.)

    I doubt that many countries will foster nuclear if the industry tries to force “take or pay” agreements on them. Especially democratic countries.

  21. Jim Rose
    February 25th, 2013 at 16:24 | #21

    here is a discussion of the price of the price anderson act http://www.cato.org/sites/cato.org/files/serials/files/regulation/2002/10/v25n4-8.pdf

  22. quokka
    February 25th, 2013 at 16:35 | #22

    @Greg vP

    This whole argument about reduced electricity (as distinct from energy) demand falls rather flat on it’s face if one considers electricity demand in the context of getting rid of fossil fuels in heating and transport. And yes, they’ve ultimately got to go if there is to be a good chance of a safe climate. Forward thinking planners will be considering this rather than just touting the magic of the market.

    I doubt that many countries will foster nuclear if the industry tries to force “take or pay” agreements on them. Especially democratic countries.

    Unlike renewables of course. Oh wait…..

    Any capital intensive generation technology is subject to the economic risk of not running at it’s full possible load factor for whatever reason. Renewables just as much as nuclear and possibly more so. This particular argument leads to gas.

  23. TerjeP
    February 25th, 2013 at 16:39 | #23

    It’s simple Quokka. Private health insurers would be happy to offer insurance to all for a price. Private nuclear insurers don’t exist because they don’t know how to cost their product.

    It’s been a while since I looked at my private health insurance but from memory nearly every type of claim I could make had a defined limit. So yes most people can get health insurance but it isn’t unlimited health insurance.

    As for pricing nuclear insurance the claim that it can’t be done is fanciful because it is done. But like health insurance there are limitations on how much can be claimed for any incident.

  24. Katz
    February 25th, 2013 at 17:21 | #24

    1. The government doesn’t underwrite the gap between the agreed limit on your medical insurance and what you pay. You pay the rest. the taxpayer is excused from paying your gap.

    2. Should you wish, you are at liberty to negotiate with your insurance company any level of coverage you may desire. The government does not set an upper limit on what your medical insurance may pay. As a consumer of medical insurance, you decide whether the coverage is worth paying. Otherwise you can self insure. I’m surprised that a self-proclaimed libertarian cannot perceive the difference between a commercial agreement entered into by two parties and a government-imposed limit that vitiates remedies at law in the event of a catastrophe.

    I recommend JR’s cited article as an accurate statement of the effects of the Price Anderson Act.

  25. Sam
    February 25th, 2013 at 17:23 | #25

    @TerjeP
    Yeah, but there’s no chance you’d ever need trillions of dollars to fix your health.

  26. February 25th, 2013 at 18:06 | #26

    Nuclear reactors can not be covered by conventional private insurance for the simple reason that a bad accident would wipe out any insurer, which means nuclear wouldn’t really be insured. The latest estimate puts the cost of Fukushima at about $250 billion and it requires pockets so deep they reach into the earth’s mantle to cover that sort of cost. This means governments need to insure reactors. In practice it means that nuclear reactors have gone mostly uninsured with victims and taxpayers on the hook for the cost of a bad nuclear accident. This lack of full insurance makes nuclear power seem much cheaper than it is, or more accurately, less incredibly expensive than it actually is.

    Just because the full cost of a nuclear accident can’t be covered privately doesn’t mean that market forces can’t determine the cost of insurance. A reactor could be required to find private insurance for say 1% or 5% of the total liability and the government could base its share of the insurance on that sum. But for some reason this doesn’t seem to happen. Apparently the socialization of risk from nuclear power was required to beat communism or something.

  27. quokka
    February 25th, 2013 at 18:21 | #27

    @John Quiggin,

    It’s now clear that the “nuclear renaissance” is dead in the US. There are four plants currently under construction, behind time and over budget as usual. No more are planned,

    An environmental impact assessment from the NRC has found no impediment to the construction of an ESBWR at the Fermi nuclear power plant site in Michigan by Detroit Edison. The finding has still to go to the NRC commissioners for final approval.

    A safety assessment will come after the generic design assessment of the ESBWR by the NRC which is expected later this year.

    Without clairvoyant capabilities, it is impossible to know if this project will go ahead or not, but as vendors and prospective operators of NPPs have to pay for such assessments, they do not request them lightly and without some serious prospect of a project proceeding.

  28. quokka
    February 25th, 2013 at 18:34 | #28

    The decommissioning work by TEPCO at Fukushima is insured by a private insurer. Despite the “fact” that collapse of SFP #4 could supposedly make the whole northern hemisphere uninhabitable according to some crank claims.

  29. Katz
    February 25th, 2013 at 18:56 | #29

    Nice straw man Quokka.

    Do you dispute Ronald Brak’s figure of $250bn?

  30. TerjeP
    February 25th, 2013 at 20:04 | #30

    I’m surprised that a self-proclaimed libertarian cannot perceive the difference between a commercial agreement entered into by two parties and a government-imposed limit that vitiates remedies at law in the event of a catastrophe.

    I have no difficulty perceiving the difference. However a government imposed limit that vitiates remedies at law is not the same as private sector nuclear insurance failing to exist.

  31. quokka
    February 25th, 2013 at 20:04 | #31

    Katz :
    Nice straw man Quokka.
    Do you dispute Ronald Brak’s figure of $250bn?

    I’ve no idea where it comes from but once again we have big number/small number phenomenon. Carbon dioxide cannot be causing global warming because it’s only 390 ppm in the atmosphere. Nuclear power is too expensive because [insert some big number without context].

    I once went to the trouble of exploring what the carbon abatement cost of the Fukushima accident might be if it were distributed over the whole history of nuclear power world wide. I came up with a figure of about $1.40 per tonne of CO2 abated assuming (very reasonably) that nuclear displaced black coal and that the Fukushima accident cost $100 billion. Multiply that by 2.5 and it’s still cheaper than the price of carbon in the miserably useless European ETS and far less than Australia’s carbon tax which is too low to be of a lot of use.

    If you want to make claims that such numbers make nuclear power “too expensive” then it is up to you to supply context. If you were actually interested in exploring the issue, you already would have made an attempt to do so. You could start by calculating an incremental cost per kWh added by the Fukushima accident to all nuclear electricity generated in Japan. You might then look at the cost of the only feasible alternative – fossil fuels.

    Over to you.

    By the way, how serious do you think the climate problem is? And what could the ultimate cost be?

  32. Fran Barlow
    February 25th, 2013 at 22:39 | #32

    Quokka has a point on Fukushima. If one wants to object in principle to Fukushima, one must assume a credible counterfactual — what would they have commissioned instead in 1964?

    Doubtless, they’d have commissioned a massive coal plant, with all that entails both in GHG terms and in airborne pollutants. Also, will anybody say that when the tsunami hit that plant, the results would have been better? I’d say not. All that residue would absolutely be radioactive as well as toxic in many other ways.

    Fukushima was what happens when an essentially criminal and unaccountable regime gets in charge of something potentially hazardous, but that would be true of pesticide and petrochemical plants too.

    With some fairly minor engineering changes, Fukushima would have been unaffected by the tsunami. Had it been decommissioned after 40 years — which was really the life of the plant, there’d have been no problem. Had it not been built at sea level, again no problem. Had it had back up power isolated from the main part of the plant, again no problem.

    More broadly, as I’ve said about renewables — if power is essential — and I think it is — then I think we should pay whatever it costs to have low footprint power in the quantities needed. If sacrifices need to be made elsewhere, so be it.

    Yet I’m also someone who accepts that if most people don’t like nuclear power — even if this is not well-founded IMO — then I ought to respect that choice. If people would prefer to get their clean power from some combination of renewables then fair enough I say. Let the chips fall where they may.

    My bottom line has always been getting rid of fossil hydrocarbon fuels from the mix. I’d say from a purely technical POV, it’s easier if you include nuclear power, but as PrQ says, it may turn out to be a lot more expensive than renewables and maybe, if we are more flexible and creative in managing demand, maybe we don’t need as much as we imagine.

  33. Hermit
    February 26th, 2013 at 01:07 | #33

    Germany’s emissions are up
    http://www.reuters.com/article/2013/02/25/germany-carbon-idUSL6N0BP87J20130225?feedType=RSS&feedName=rbssEnergyNews&rpc=43
    while GDP contracted in 4Q 2012.

    Maybe mothballing 40% of their nuclear capacity had something to do with it. Note in the link they like to say forget 2012 what about 1990. That was when much of archaic East German industry was shut down after unification giving a large one-off emissions cut.

  34. TerjeP
    February 26th, 2013 at 04:26 | #34

    Yet I’m also someone who accepts that if most people don’t like nuclear power — even if this is not well-founded IMO — then I ought to respect that choice.

    If most people prefer coal, will you respect that choice? Do you always respect the majority position? For example if most people prefer Tony Abbott will that choice be one you respect?

  35. John Quiggin
    February 26th, 2013 at 05:34 | #35

    @Hermit

    It certainly doesn’t make much sense to mothball existing plants.

    OTOH, the recent increase is a blip. Coal plants that are due to shut down under EU mandates were allowed a fixed number of operating hours and have rushed to use them while they can get cheap coal from the US.

  36. John Quiggin
    February 26th, 2013 at 05:37 | #36

    @Terje You need to check your health insurance. Most hospital insurance policies (eg mine from Medibank) have unlimited cover as the default, with caps imposed for what are seen as optional extras (eyeglasses, dentists, physio etc). If you have a cap on your cover for major surgery you are running a big risk.

  37. quokka
    February 26th, 2013 at 08:13 | #37

    Widely reported are recent statements by the German Environment Minister about the cost of Germany’s energy transition. According to a report in Bloomberg:

    - The cost of shutting down nuclear power will be EUR 300 billion
    - Total cost by 2030 will be EUR 1000 billion
    - Cost of renewables subsidies by 2022 will 676 billion if current rate of deployment of new solar and wind is maintained.

    I will admit to a little shock at the last figure in particular. When constantly bombarded with stories about how cheap renewables are becoming, one thinks “Well, it *might* be true”.

    Apparently not. What might that 676 billion deliver if devoted to a very large nuclear rollout? Adopting FOAK costs of about EUR 5/W for EPR, that figure would pay for around 135 GW of nuclear power. With many of a kind deployment, costs should drop by 20% or more.

    135 GW of nuclear is easily more than twice the French nuclear capacity. It would be sufficient to decarbonize electricity supply not just in Germany but across most of northern Europe.

    Renewables cheaper than nuclear?

    It is interesting to reflect on where Germany is right now. About 13% of Germany’s electricity came from solar/wind/geothermal/etc in 2012. Solar production represented in round figures about 1% of German final energy use. Wind represented about 2%. All the rest baring the remaining contribution from nuclear (still higher than solar+wind), biomass of various types and a little hydro comes from burning fossil fuels.

    Getting off fossil fuels is going to be far more difficult than anybody could have guessed. Most nations will not pony up for what Germany is apparently signing up for. If these figures are right, it’s just too expensive. Prospects for a safe look very poor indeed. As the referenced piece from George Mobiot said – be careful of what you wish for.

  38. quokka
    February 26th, 2013 at 08:29 | #38

    @quokka

    A sentence about should read “Prospects for a safe climate look very poor indeed”.

  39. Katz
    February 26th, 2013 at 08:42 | #39

    Quokka:

    “If you want to make claims that such numbers make nuclear power “too expensive” then it is up to you to supply context.”

    That’s a big “if”. And it is based on a false assumption.

    This is my original modest point, edited to exclude a pettifogging loophole:

    “But investors in both nuclear power generation companies and in insurance companies have already decided that it is uneconomic to insure [all] the [foreseeable] risks associated with nuclear power generation.

    “From a commercial viewpoint, therefore, it is Game Over for nuclear power generation.”

    It is doubtless that there are many grave externalities associated with burning fossil fuels. At present, those responsible for carbon emissions have avoided liability for the consequences of those emissions. This legal immunity is a grave injustice. At least at the establishment of the nuclear industry there was tacit acceptance of the existence of dangerous and foreseeable externalities.

    When and if fossil fuel burners are forced to acknowledge for those externalities it may be possible to establish a legal framework for compensating for damages which will then send price information to producers and consumers.

    In a society that values civil rights and property rights only a legal framework that allows for punishment and compensation will provide transparent, reliable and sustainable price information.

    As you can see, at present, the nuclear industry is partially under such a regime but the fossil fuel industry is hardly under any such regime at all. I’m reasonably confident that civilised people would oppose allowing the nuclear industry to enjoy the present lawless condition of the fossil fuel industry.

    However, this is exactly what is happening in Japan at present. According to this doco:

    http://www.abc.net.au/radionational/programs/360/souteigai/4308310

    Some Japanese farmers near Fukushima sued TEPCO to remove the radioactive particles that pollute their land.

    The Japanese court threw out the farmers’ suit because the judge decided that escaped radioactive particles are “ownerless”.

    If I allow sump oil to escape from my property and flow over the next door neighbour’s garden, it is still my sump oil and I’m liable for the damage occasioned by my negligence. Yet TEPCO has been given licence to spread some of the most toxic substances known to mankind.

    Is this civilised?

  40. Greg vP
    February 26th, 2013 at 09:31 | #40

    quokka :
    @Greg vP
    This whole argument about reduced electricity (as distinct from energy) demand falls rather flat on it’s face if one considers electricity demand in the context of getting rid of fossil fuels in heating and transport.

    It doesn’t, actually. Electric transport is much more efficient than IC-engined transport; avoided transport is more efficient still, and that is expected to be the trend. Likewise for stationary uses, insulation and heat recovery systems reduce consumption no matter what the heat source. Higher energy prices stimulate investment in these goods. And reduced population means reduced demand of all kinds.

    Unlike renewables of course. Oh wait…..

    Yes, precisely. Unlike renewables. Public opinion has decided that Nuclear is Bad and the industry is Not to be Trusted; public opinion has decided that renewables are Good and We Must Have Them. Public opinion is …undiscriminating, shall we say, in its beliefs. Perhaps German public opinion is now waking up to its mistakes.

    Any capital intensive generation technology is subject to the economic risk of not running at it’s full possible load factor for whatever reason. Renewables just as much as nuclear and possibly more so. This particular argument leads to gas.

    Yes. And gas is what we’re getting, by strange coincidence. And it is what we will continue to get. Until, that is, gas becomes scarce enough that the alternatives can jump their hurdles.
    Forward-thinking policy would be good, but democracy doesn’t work that way. Democracy’s way is denial followed by crisis and suffering, followed eventually by the minimum change necessary to silence the moans and screams of pain, for the time being. Prospects for a safe climate are indeed dim.

  41. Nathan
    February 26th, 2013 at 11:54 | #41

    @quokka
    You’re playing a bit fast and loose with your references here. You compare the 2011 renewable tax preferences (you say $15 billion but from [1] it’s <14, near enough I guess) to the recent 10 yr average DOE direct energy technology funding for nuclear ($1.5 billion from [2]) which is a completely different quantity. The correct comparison for the DOE funding for 2003-2012 [2] is Nuclear: $1.5 billion/yr, Renewables: $0.68 billion/yr which is, you know, substantially less.

    Still referring to direct DOE funding you then say,
    "Yes, nuclear has received the most, but far less per unit energy produced than renewables and just $1.3 billion average per year over the last 35 years."

    You leave out that renewables again received half that <$0.6 billion/yr over 35 years. So, what about you're "per unit energy claim". I don't have data going back 35 years but over a decade [3] shows '93 till '11 with renewables at ~12% (goes from 11% to 13%) of the US energy generation with nuclear staying at ~19%. This means in terms of DOE funding renewables are producing ~63% of the power generated by nuclear while getting less than 50% of the funding of nuclear. In other words nuclear gets more money per unit energy, not less.

    Having said all that the tax preferences (for 2011 [2]) are a quite rather story and substantially in the renewables favour $13.9 billion to $0.8 billion. However since it seems clear that JQ is correct and that the US is leaving nuclear energy, one would expect recent funding to be strongly in renewables favour. If you have some longer term data showing increased tax breaks to renewables over nuclear that would be a lot more convincing.

    [1] Federal Financial Support for the Development and Production of Fuels and Energy Technologies
    [2] Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, and Energy Efficiency R&D
    [3] http://en.wikipedia.org/wiki/File:United_States_electricity_generation_by_fuel_1990-2040.png

  42. Nathan
    February 26th, 2013 at 12:01 | #42

    @Nathan
    “quite rather story” should be “quite different” or “rather different” depending upon personal taste

  43. Fran Barlow
    February 26th, 2013 at 12:27 | #43

    @TerjeP

    If most people prefer coal, will you respect that choice?

    Err no … in this case, the difference between coal and nuclear has consequences for others that are unreasonable — seriously harming ecosystem services and prejudicing health on a mass scale. There is at least a doubt whether, all things considered, a renewables-centred economy would perform worse than a nuclear power-centred one, but even if it did, the impositions on the community as a whole might amount at worst to some minor inconvenience. I may disagree with the balance here and the reasoning, but living in a community is a compromise and no compelling interest is prejudiced by this choice.

    There’s no bright red line between accepting nuclear and rejecting it from the mix so I can support either as at worst plausible. Yes, some people might just not like the idea on aesthetic grounds and prefer the idea of renewables on the same basis, but provided they are willing to accept the consequences, I’m for going the journey with them.

    There is however a bright red line between intensive use of fossil hydrocarbons and a society based on extracting its energy from sources that are qualitatively cleaner.

    For example if most people prefer Tony Abbott will that choice be one you respect?

    “Respect” is the wrong term here. I wouldn’t “respect” the choice of people to vote for Julia Gillard either. For mine, both of them are wrong all over the place on grounds I’ve often canvassed here and therefore need no recapitulation. I’m scandalised that these are the only realistic outcomes of the September 14 election.

    As critical as I am of current arrangements however, I recognise that this is, for the time being, how things are done. I will recognise either band of boss class scoundrels as “the governing regime after the election is held. I won’t recognise this as ‘democracy at work’ because plainly, it isn’t.

    It’s also not comparable to the choice between nuclear and renewables because once again, although tribal and cultural-aesthetic considerations will play an important part in determining which team of boss class scoundrels are chosen the exploit humanity here and elsewhere, real large scale harm will flow from these choices. They are debating for example, how best to impose suffering on vulnerable people in our region. One band of scoundrels wants to make the tax system especially regressive, and relieve the wealthier folk from some of their tax burden while cutting services to poorer people mainly in the interest, they say, of people with a serious primary stake in money markets. They both agree with spending large sums on weapons of war, despoiling parts of the environment, and prosecuting a ‘war on drugs’.

    I could never respect that.

  44. Nathan
    February 26th, 2013 at 14:18 | #44

    @quokka
    Previous attempt in limbo, probably because of link in [3]. Here’s another attempt sans link:

    You’re playing a bit fast and loose with your references here. You compare the 2011 renewable tax preferences (you say $15 billion but from [1] it’s <14, near enough I guess) to the recent 10 yr average DOE direct energy technology funding for nuclear ($1.5 billion from [2]) which is a completely different quantity. The correct comparison for the DOE funding for 2003-2012 [2] is Nuclear: $1.5 billion/yr, Renewables: $0.68 billion/yr which is, you know, substantially less.
    Still referring to direct DOE funding you then say,
    "Yes, nuclear has received the most, but far less per unit energy produced than renewables and just $1.3 billion average per year over the last 35 years."
    You leave out that renewables again received half that <$0.6 billion/yr over 35 years. So, what about you're "per unit energy claim". I don't have data going back 35 years but over a decade [3] shows '93 till '11 with renewables at ~12% (goes from 11% to 13%) of the US energy generation with nuclear staying at ~19%. This means in terms of DOE funding renewables are producing ~63% of the power generated by nuclear while getting less than 50% of the funding of nuclear. In other words nuclear gets more money per unit energy, not less.
    Having said all that the tax preferences (for 2011 [2]) are a quite rather story and substantially in the renewables favour $13.9 billion to $0.8 billion. However since it seems clear that JQ is correct and that the US is leaving nuclear energy, one would expect recent funding to be strongly in renewables favour. If you have some longer term data showing increased tax breaks to renewables over nuclear that would be a lot more convincing.
    [1] Federal Financial Support for the Development and Production of Fuels and Energy Technologies
    [2] Renewable Energy R&D Funding History: A Comparison with Funding for Nuclear Energy, Fossil Energy, and Energy Efficiency R&D
    [3] wikipedia:Electricity_sector_of_the_United_States first figure

  45. quokka
    February 26th, 2013 at 16:50 | #45

    @Nathan

    I urge anybody interested in the facts to read the sources I provided. I cannot be bothered arguing with such nonsense. But anybody reading them should bear in mind that subsidies are not being paid for “renewables”, they are being paid for “non-hydro renewables” which generate a small fraction of the electricity that does nuclear power.

    The original claim of massive subsidies for nuclear far exceeding those for solar and wind is unproved and unsupported by any evidence whatsoever. On the contrary, I have provided strong evidence that it is not true.

  46. February 26th, 2013 at 17:23 | #46

    Quokka, you must have skipped the bit where I explained that nuclear power doesn’t pay the full cost of its insurance. That’s a huge subsidy right there. Another subsidy of sorts is waste disposal in the US. Nuclear generators are only charged 0.1 cents per kilowatt-hour for waste disposal, but that hasn’t really panned out. Twelve billion dollars of the money collected has been spent and there is still no waste repository and none on the horizon. But who knows? Maybe in a few years Nuke-Away will be invented.

  47. TerjeP
    February 26th, 2013 at 17:54 | #47

    They were forced to pay the government for waste disposal and the government failed to deliver. So who is at fault? I’d say the government. For the most part the US nuclear energy producers still have the bulk of the waste and are still managing it.

  48. February 26th, 2013 at 19:07 | #48

    You know, even if it was Elton John’s fault, I don’t think it would change the situation. It wouldn’t actually convince the nuclear waste to skip to the end of its decay series or make it easier to dispose of.

  49. Nathan
    February 26th, 2013 at 21:46 | #49

    @quokka

    I beg your pardon. I read the sources you provided, in detail, and found that you flat out lied about what they showed, or rather you lied about what the DOE paper showed. All my calculations are very simple, feel free to point out my error, but I rather think you can’t.

  50. quokka
    February 27th, 2013 at 10:41 | #50

    @TerjeP

    Yes, of course the dithering on spent fuel management is the fault of the US Federal Government, and partially a reflection on dithering on any number of questions. That’s US politics for you. The NPP plant operators have every right to be cranky about it as there is now something like $25 billion or more in the fund which has basically been paid for by the electricity rate payers.

    Of course, anti-nukes do their best to perpetuate the situation as a long term solution gives them one less thing to complain about.

    However there also been the underlying issue of disposal vs recycling that has had a role in the confusion. Under the Bush administration there was the GNEP initiative. Whatever the overall rights and wrongs of this concerning the legal rights of some nations to conduct recycling if they wished to, the initiative basically divided the world into producer and consumers of nuclear fuel. Consumers were to return their spent fuel to producers for disposal or recycling. Recycling was a serious prospect in the US via the GEH Advanced Recycling Center (PRISM + pyroprocessing). This is all now at best on the backburner, but it certainly has been an extra element of uncertainty.

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