The green fields of nuclear power (updated)

Despite Fukushima and the failure of the US “nuclear renaissance”, nuclear power still has plenty of fans in Australia. A question which opponents routinely ask is “where are the nuclear power plants going to go?”.

That’s obviously a difficult question, but there’s a subtly different, and even nastier, question behind it, namely “How should we decide where a nuclear power plant should go”. There are obviously all kinds of issues to be resolved. For example, should it be on the coast, and therefore potentially vulnerable to a tsunami? Should it be near or far from population centres?

If we in Australia made a decision to go for nuclear power, then decided to answer all these questions from scratch, it would take years, maybe a decade or more before we even picked a site (look how long we took over the much easier question of a site for the national capital). And, until we answered the siting question, any estimate of the costs of nuclear power would be a stab in the dark anyway. A plant located in the centre of the Nullarbor would be about as safe as you could get, but hopelessly uneconomic.

So, the obvious answer is; Look at what other developed countries have done when faced with the same problem. But it turns out there is a small difficulty. The answer, according to the US, Britain and every other developed country I’ve looked at, is “put your plant next to an existing one, so there won’t be any more trouble than you already have”.

Of course, it’s logically impossible that they always worked that way. But, as far as I can tell, the last time a new site was picked for a nuclear power plant in a developed country was in the 1970s, before Three Mile Island, let alone Chernobyl and Fukushima. Even supposing that experience were relevant, it’s lost in the mists of time – the decisionmakers involved are long since gone, and any records they left are probably buried in the archives.*

So, unless we can solve a problem that every other developed country in the world has chosen to duck for 30-odd years, we will never even get to the starting gate with nuclear power.

*Update It turns out to be fairly easy to retrieve material from the National Archives, for example, on the proposal, made in the late 60s and abandoned in the early 70s, to build a nuclear power station at Jervis Bay. Thanks to commenter Andrew for picking me up on this.

*Further update Contrary to the claim in the post, a Finnish company has announced a proposed site for a new reactor, though it is not clear that any proper approval process has been undertaken. I doubt that Finnish administrative processes will translate easily to Australia, but it looks like a counterexample to my claim.

187 thoughts on “The green fields of nuclear power (updated)

  1. Thanks for the offer of studies John B., but I’m more interested in examples of new nuclear plants recently built or being built in developed countries that could compete with Australian electricity prices because I can’t seem to find any. Flammanville is estimated to cost over $5,000 a kilowatt. Olkiluoto about $4,000 a kilowatt. Watts Bar is something like $4,500 a kilowatt to finish a mostly built reactor. I don’t have a total figure for Vogtle but apparently it’s a billion dollars over budget and 12 months behind schedule. And even if we can get a reactor built at a say $4,000 a kilowatt there’s about three cents a kilowatt-hour operating cost – add on your 1 cent a kilowatt-hour insurance which I doubt Lloyds of London will give us, 1 cent decomissioning fee, and half a cent waste disposal and operating costs along are higher than the average Australian wholesale electricity price including the carbon price. Considering that point of use solar PV in Australia is now cheaper than coal + distribution, I really can’t see nuclear competeing.

    And just to be clear, I’m not saying solar power will power all of Australia all of the time, I am saying the low cost of solar power and the lower than nulcear cost of other generating capacity makes it currently impossible to make money building a nuclear power plant in Australia.

  2. Just read a bit of interesting news about energy storage. Now that generous feed in tariffs are hard to find outside of Japan, Panasonic is starting mass production of a small 1.35 kilowatt-hour battery for small scale solar that that allows people to use more of their point of use solar power themselves and export less to the grid. I imagine these sorts of batteries will become common in Australia now there’s such a large gap between what consumers pay for grid electricity and what they can sell it for.

  3. @ Ronald Brak:
    You conflate and confuse the capital and operating and other components which contribute to Levellised Cost Of Energy – LCOE.

    This is not about only the capital cost of generation facilities, but also the operating and fuel costs, the ultimate decommissioning and deconstruction costs, as well as financing and so forth.

    To view only the capital costs is to ignore all else.

    Regarding decommissioning and insurance, I did not say 1 cent each – I said a fraction of a cent, total.

    So, LCOE studies are out there and the majority of them determine that:
    1. PV and offshore wind and solar thermal and new hydro are currently behind
    2. (fossil fuels plus CCS) and nuclear, which are challenged on some sites by
    3. onshore wind and (new coal without CCS, an abomination which should be outlawed) and existing hydro.

    That some current fission builds are running behind program and above budget is correct, but that leaves the many non-OECD nation projects, some of which are very cost-competitive indeed.

    I retain an open mind regarding fission, especially Type IV, which has been trialled successfully for three decades and offers a very neat opportunity to convert our stockpiled spent fuels into electricity, thus removing the perceived problem of radioactive waste and simultaneously releasing the remaining 99+% of the energy in these fuels. We will not need to mine uranium for these reactors for thousands of years. Not needing to mine is a Good Thing.

    Imagine… all the energy that one energy hungry western style person will use throughout his/her lifetime can result in only a golfball sized waste problem, which is itself not sigificantly radioactive after 300 years and originates from today’s stored post-use so-called spent fuel rods, with no need to construct or operate mines.

    It’s easy to see why I would be very interested in this energy option as well as each of the renewable options.

    What I hope to avoid is burning ever more fossil fuels, for whatever purpose, whether for base load power or to support unreliable renewables or to power transport.

    But no, properly designed and fully funded fission is neither streets ahead of nor far behind the LCOE cost of renewables such as wind, solar or geothermal. It is, however, worthy of rational consideration and may well be the western world’s best chance in a world which is challenged by carbon dioxide pollution and climate change. This is not the time to eschew options of any type which, though unpalatable to some, may turn out to be our best bet in a changing world.

  4. @Jim Birch
    I think the answer is too clear-cut for debate. it’s not just politically infeasible in the sense that any particular location would face a lot of resistance. It’s administratively infeasible in the sense that no-one has any idea how to go about picking a site – I very much doubt that the Finnish process will translate anywhere else.

    So, whatever the feasibility of new plants at existing sites, the case for greenfield nuclear in developed countries is much weaker.

  5. “You conflate and confuse the capital and operating and other components which contribute to Levellised Cost Of Energy – LCOE”

    No, what Ronald points out is that the assumptions for capital costs used in those LCOE studies, even their worst case scenarios, are far too low and unrealistic…they do not translate in practise.

    “I retain an open mind regarding fission, especially Type IV”

    John B, that’s nice, but now you’re conflating and confusing the issue.

    If LCOE of Type IV nuclear were even existent – which it is not – it would be three lane freeways behind solar and wind.

    Deal with what we have now, including the high labour costs and every other expense of building and operating a type II to III reactor in a first world country where a pot of beer costs $5.

  6. John Bennets, sorry I made a mistake with regards to what you said about insurance.

    In the US nuclear power plants pay one tenth of a cent per kilowatt hour for waste disposal. But the waste has not actually been disposed of. It piles up at nuclear plants. Something that seems like even less of a good idea given events in Japan. US nuclear plants very roughly pay about .025 of a cent per kilowatt-hour for insurance. (It’s not actually charged per kilowatt-hour, but that’s what it very roughly comes to.) Now after Fukushima, I really doubt that represents the market price of insurance. As our host has pointed out in the past, Japan would have needed to have an insurance rate of about 10 cents a kilowatt-hour on nuclear power to pay for the Fukushima disaster. Now maybe a modern reactor in Australia could get insurance for under 10 cents a kilowatt-hour, but I really doubt it would be less than one cent.

    John B., you did not say decomissioning, I did. Sorry if I wasn’t clear on that. The one cent a kilowatt-hour cost was a guess based on European costs. Looking at the US I see the Zion plant will apparently cost about a billion dollars over 10 years to decommission, which comes to roughly a third of a cent per kilowatt-hour the plant produced. If Zion hadn’t had a major accident it could have produced more kilowatt-hours before being shut down, but the chance of a nuclear reactor having to close down early, as a number have, adds to their cost. The decommissioning of the Haddam Neck plant in 1996 cost $1.2 billion. I don’t know how many kilowatt-hours it produced. Looking at Switzerland, I see they estimate the cost decommissioning their 5 nuclear plants at an average of $4.5 billion for each one.

    The half a cent per kilowatt-hour cost for waste disposal is a loose estimate based on a figure I have for British waste disposal. Sweden charges a third of a cent per kilowatt-hour for waste disposal.

    Looking at the operating costs of new nuclear plants rather than average operating costs, I see that the operating costs of new nuclear is supposed to be lower. Possibly 2 cents a kilowatt-hour. So looking at this optimistically, let’s say operating costs are 2 cents a kilowatt-hour, decommisioning and waste disposal is 1 cent a kilowatt-hour, and insurance is 2 cents a kilowatt-hour, that still comes to an operating cost of 5 cents a kilowatt-hour. This is still more than current wholesale prices in Australia and not much less than what they will be after the first of July And given the effect that wind and solar have on wholesale electricity prices, it might not be long before they drop below 5 cents a kilowatt-hour again. So even looking at costs optimistically, nuclear could still be a money loser in Australia even if the cost of the nuclear plant was zero dollars.

    John B., you mention that studies show that nuclear is cheaper than solar. I’m not terribly interested in these studies because currently Australians can call up a solar PV installation company and get solar electricity for less than the cost of our current coal and gas + distribution. Obviously the real world says that solar is cheaper than nuclear. And rather than a study, I’d like you to show me one new nuclear plant in the developed world, either recently built or being built, that would be competitive in Australia. But you can’t do that.

  7. I think discussion of capital cost is misleading unless we adjust for capacity factor. When I bought PV it was about $8/w. If I divide that by 0.16 (ie 16% average of nameplate output) I get $50/w. If nuclear costs $4.50/w but has 90% capacity factor the adjusted cost is $5/w.

    However it seems like that cost of capital for nuclear will be higher due to lenders and shareholders perception of risk, hence the US loan guarantee system. However the only default so far I believe has been Solyndra, a solar company. With the seemingly mothballed solar flagships at Moree and Chinchilla the Feds were going to put up ~40% of the capital for free. Thus all profits if any would go to the private owners, doubly assisted by the REC subsidy now called LGC I think.

    Like several other commenters I think Ceduna would be a good site for Australia’s first nuke. It could supply desalinated water and electricity for Olympic Dam mine. BHP seem to be having second thoughts about a gas pipe and air cooled gas power station at the mine so it may not go ahead otherwise. If Ceduna went glitch free then Hunter and Latrobe Valleys could follow.

  8. Two way street, Hermit.

    You need also to include a utility factor. When 75% of the required energy comes from distributed consumer owned energy production (or conversion) systems requiring the nuclear reactors to ramp down during solar and high environmental energy input cycles, the economic viability severely changes. Nuclear plants that need to idle for 4 fifths of the day and possibly operate below capacity for the rest may not be economical against other plant that can operate in that way.

    This is the main issue for future grid suppliers, as you yourself have periodically alluded to, to be aware of. Energy utilities need agile energy producing infrastructure such as hydro and gas turbine facilities in the future, or they need systems that are a natural complement for solar facilities.

  9. Insurance for nuclear power seems to be ok as long as you don’t make a claim

    the pool said in August 2011 that it would not renew Tepco’s contract after it expired in mid January 2012. (Japanese nuclear utilities are required by law to secure JPY 120 billion in accident liability coverage.) Tepco is seeking coverage from private-sector insurers.

  10. It’s worthwhile reading the line put forward by World Nuclear and noting their omission of the fact that the claims against Tepco were sufficient ($100B) for the govt to step in and nationalist them

     It is commonly asserted that nuclear power stations are not covered by insurance, and that insurance companies don’t want to know about them either for first-party insurance of the plant itself or third-party liability for accidents. This is incorrect, and the misconception was addressed as follows in 2006 by a broker who had been responsible for a nuclear insurance pool: “it is wrong [to believe] that insurers will not touch nuclear power stations. In fact, wherever they are available to private sector insurers, Western-designed nuclear installations are sought-after business because of their high engineering and risk management standards. This has been the case for fifty years.” He elaborated: “My comment refers very much to the world scene and is not contentious. Apart from Three Mile Island, the claim experience has been very good. Chernobyl was not insured. Significantly, because Chernobyl was of a design that would not have been an acceptable risk at the time, notably the lack of a containment structure, the accident had no impact on premium rates for Western plants.

  11. Reporting of energy matters seems to be subject to selective bias. This report indicates that for the east coast Australia conventional generation is down and renewables are up

    Total east coast grid power generation fell by 1,689 GWh, with the decline also reflected in lower coal-fired generation (down 598 GWh) and lower hydro generation (down 578 GWh).

    Wind power however grew by 24% (300 GWh). In the March quarter wind contributed 3.1% of east coast generation, with the highest generation in South Australia of 942 GWh, 31% of the State’s grid generation.

    “In South Australia wind appears to be the new baseload.”

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