Home > Economics - General, Environment > Pandora Post-mortem

Pandora Post-mortem

November 10th, 2013

I have a piece in the Guardian responding to the pro-nuclear film Pandora’s Promise. The core of my argument is that, in most countries, political resistance to nuclear power is no longer the primary problem – the big difficulty is with the economics. The key paras

he fact that the world has not turned to nuclear power as a solution to climate change is a matter of economics. In the absence of a substantial carbon price, nuclear energy can’t compete with coal and other fossil fuels. In the presence of a carbon price, it can’t compete with wind and solar photovoltaics. The only real hope is that, if coal-fired generation is reduced drastically enough, always-on nuclear power will be a more attractive alternative than variable sources like solar and wind power. However, much of the current demand for “baseload” power is an artifact of pricing systems designed for coal, and may disappear as prices become more cost-reflective.

To put the point more sharply, if we are convinced by the arguments of Pandora’s Promise, what would the makers of the film have us do? Stop protesting against nuclear power? Most of us did so decades ago. Abandon restrictions on uranium mining and export? The Australian government has done so already, with barely a peep of protest. The only remaining restrictions on exports to India relate to concerns about nuclear weapons proliferation, not nuclear energy, and seem likely to be dropped in any case. Give nuclear power a level playing field to compete against renewables? In the US at least, nuclear power is already treated more favourably than alternatives, leaving aside the massive subsidies already handed out in the 20th century. The same is true in many other countries that have sought, with limited success, to promote a nuclear renaissance.

Two of the leading environmentalists quoted as supporting nuclear power are Mark Lynas and George Monbiot. They have some interesting reactions to the recent announcement that EDF will build a nuclear reactor, Hinkley C, under a deal with the UK government. Monbiot sees it as a disaster, going for massively expensive Generation III technology when the alternative was to build an Integral Fast Reactor, a design with lots of theoretical advantages but one that has never been built (other breeder reactors have been expensive failures). Lynas, writing before the announcement has a more sanguine view of the cost. Lynas compares the “strike prices” offered by the UK government for various renewables, ranging from 100stg/MWh for onshore wind, to 305stg/MWh for experimental technologies like wave and tidal energy. Offshore wind (the only source without severe supply constraints in the UK context) comes in at 150 and large-scale solar at 125. These are guaranteed for 15 years from 2014. Hinkley has as strike price of 92.50, for 35 years from the estimated start date of 2023.

Depending on your assumptions about technical progress, that makes nuclear look like a reasonable option to place a bet on in the UK context. But the UK is a special case. On the nuclear side it has plenty of brownfield sites where a new reactor can be added, as well as a regulatory setup skilled workforce and so on. More importantly, the UK is densely populated, located at a high latitude (Edinburgh at 55N is on the same latitude as Moscow) and notoriously cloudy, due to the Gulfstream. Add to that a strong contingent of NIMBY denialists in the Tory Party and you’ve got a country with very limited prospects for solar PV or onshore wind.

Conversely, taking Lynas’ numbers and even ignoring the rapid technological progress in solar PV, it’s obvious that nuclear energy is never going to be a goer in Australia, where we have plenty of land, much more sunlight and no established nuclear infrastructure. The calculation will be different in different countries, but there won’t be many where nuclear comes out as the least-cost option, although it might be a good backstop in some cases.

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  1. John Quiggin
    November 13th, 2013 at 17:49 | #1

    WB & quokka: The immediate resort to nitpicking a back-of-the-envelope blog post is symptomatic of the kind of reasoning that sustains you in beliefs that ought to have been shaken by a lot of contrary evidence since you formed them.

    Responding to quokka, I think you’ll find that your denominator includes all sales of PV modules, but your numerator excludes self-generation from rooftops, which undermines the calculation pretty badly.

    But, regardless, cut the estimated availability in half and you don’t change the qualitative point I was making.

  2. November 14th, 2013 at 09:36 | #2

    Wills Boisvert:

    1. To start I will repeat point 10 I made in an earlier comment: The costs of insurance don’t go away if you ignore them.

    2. Even if all costs from nuclear disasters are the result of government overreaction the costs still exist and any accounting of the cost of nuclear power needs to include them.

    3. If nuclear plants do not carry enough insurance to cover the cost of a nuclear disaster then that cost does not disappear. The risk gets pushed onto the public and they pay. The public may get lucky and not suffer the costs of a nuclear disaster or they may be unlucky, but either way the risk has to be accounted for. This applies even if all the costs of a nuclear disaster are somehow the result of ‘government overreation’.

    4. As a result the cost of nuclear power is very high and this applies whether or not the costs of nuclear disaster are real or somehow imaginary.

    5. On whether or not there are actual real dangers from radiation, personally I think Dangerous Energetic Rays are Possible.

  3. November 15th, 2013 at 06:40 | #3

    And Will, I had to laugh at your scoffing at the idea of a trillion or 10 trillion dollar nuclear disaster. At Fukushima the winds carried most of the plume in the best direction possible, directly out to sea. If the winds had instead been blowing towards Tokyo then you may well have seen multi trillion dollar costs from a nuclear disaster. The chance of the wind blowing towards Tokyo was small but real and this is the sort of thing that needs to be taken into account when determining what is an appropriate amount of insurance.

  4. November 16th, 2013 at 19:48 | #4

    On the topic of insurance and nuclear power it is probably the only form of generating capacity that may need insurance against nuclear accidents on entirely different continents. Prior to the Fukushima disaster Japan’s nuclear reactors may have had a market value of tens of billions of dollars and their ‘value’ on paper maybe have been much more. But now they’re a liability. Sure, maybe they’ll operate some of the more modern/safer reactors for years to come, but their value have been devastated. And it’s not just Japanese reactors that are affected but ones in the US, Europe and elsewhere have had their value reduced. While if a wind turbine happens to somehow fall over and squish someone the effect on the value of wind turbines as a whole would be quite insignificant.

  5. Will Boisvert
    November 17th, 2013 at 06:03 | #5

    @ Ronald Brak, on the Fukushima accident destroying Tokyo.

    “If the winds had instead been blowing towards Tokyo then you may well have seen multi trillion dollar costs from a nuclear disaster…that needs to be taken into account when determining what is an appropriate amount of insurance.”

    Ronald, no; there is no way the Fukushima spew could have done any harm at all to Tokyo, much less trillions of dollars worth, no matter which way the wind blew. Consider:

    1. Fukushima City, with several hundred thousand inhabitants, is 35 miles northwest of the Fukushima Daiichi plant, and a fallout plume from the plant did indeed settle on it. The city was not evacuated and the scientific consensus is that there will be no measurable uptick in cancer rates and no discernible public health impact there at all, as is the case in the rest of Fukushima prefecture.

    2. The city of Kiev, with several million inhabitants, is about 70 miles south of the Chernobyl plant. It was inundated by a fallout plume during the 10-day spew there, which was much larger than the Fukushima spew. It was not evacuated. No uptick in cancer rates or other health problems related to the radiation have shown up there in epidemiological studies. In fact, the cancer rates in areas contaminated by fallout are lower than the Ukrainian average.

    3. Tokyo is about 140 miles from the Fukushima Daiichi plant. The notion that fallout plumes attenuated by all that extra distance and transit time could have required evacuation or done more harm than they did to Fukushima City and Kiev—that is, none whatsoever—is absurd on its face.

    4. As it happens, scientists at Lawrence Livermore National Laboratory in California did study the possibility of fallout on Tokyo during the throes of the Fukushima spew, using their state-of-the-art computer models. Here’s an article about it in Slate http://www.slate.com/articles/health_and_science/science/2013/09/fukushima_disaster_new_information_about_worst_case_scenarios.single.html

    The results? “The scientists concluded that radiation in Tokyo would come nowhere close to levels requiring an evacuation, even in the event that Fukushima Daiichi underwent the worst plausible meltdown combined with extremely unfavorable wind and weather patterns. Obama was briefed on the findings, and pressure for an evacuation abated.”

    –So the notion that the Fukushima spew could have affected Tokyo is pure moonshine that is conclusively disproven by a mountain of historical and scientific evidence. This is the kind of mindless alarmism that gives anti-nuclear ideologues a bad name.

    And of course, any estimate of insurance costs that relies on such outlandish scaremongering is likewise nonsense on stilts.

  6. ZM
    November 17th, 2013 at 06:42 | #6

    “outlandish”

    This relates to uplandish Will Boisvert, for the benefit of your information.

    Uplandish was a derogatory term for country folk who lived far from London, as the English language began the shift to be more London based.

    I can tell by your writing you are a man of The City and all it implies. You would probably sidle away from David Graeber at cocktail parties.

  7. November 18th, 2013 at 09:22 | #7

    Wills Boisvert, sorry for my delay in replying. I have been busy.

    1. Will, look at a map of Japan. Find the location of the Fukushima nuclear plants. Now draw a line from them towards Tokyo Tower. It doesn’t have to go all the way to Tokyo, just draw the line towards it. Now what do you see under and around that line?

    2. That was an interesting article you linked to, Will. So the US military didn’t know what the results of a worst case scenario might be despite the reactors being a potential target for military or mass murderer attack? That’s pretty amazingly slack. I wasn’t even allowed in the Shika nuclear plant after the September 11 attacks in the US. It appears they did the panicking but not the preparation. It’s hard to see how they could have not have thought this thing through ahead of time. It took them days to conclude that US troops in Tokyo would not need to be evacuated. I think that if the wind had been blowing towards Tokyo from the start the Japanese government wouldn’t have waited several days before taking action. And uncertainty about results is exactly the sort of thing insurers price into their premiums.

    3. What I would really like to hear from you about is if nuclear power doesn’t have to pay insurance for the unlikely but real chance of a nuclear disaster, then who pays? It doesn’t matter if you think nuclear fallout is harmless, the costs of a disaster are real and need to be paid, so who should pay for them? If the government has to pay, why should governments permit nuclear power plants to be built if puts them on the hook for potentially trillions of dollars in costs? If people affected aren’t compensated for their losses and so private citizens have to bear the cost, why should the citizens of a country allow nuclear power plants to be built? They’d have to be stupid to allow it under those circumstances.

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