Cost, not just safety issues, send a toxic cloud over the nuclear industry’s future
Nowadays, a typical scheme involving multiple reactors on one site, puts you back $25bn! The money was not to be produced up-front, of course, but created by complex financial packages based on debt, not equity. The sums involved, the “paper” floating on the underlying asset – the nuclear complex – run into the trillions.
Nuclear industry dreams dashed by current economic reality http://www.guardian.co.uk/business/economics-blog/2012/apr/02/nuclear-dreams-economic-reality-blog?newsfeed=true It was the financing model and rates of return that prompted German nuclear giants RWC and E.ON to pull out of UK energy plans Martin Cohen guardian.co.uk 2 April 2012 The news that nuclear giants RWE and E.ON are dropping plans to build any new UK reactors has sent a toxic cloud not only over Wales, but over the nuclear industry itself.
Of course, everyone knows nowadays, post-Chernobyl, post-Fukushima, that nuclear power plants are not really safe. Even if there are a few noisy die-hards, arguing that the resulting radiation is harmless, and that “hardly anyone” dies as a direct consequence of atomic meltdown, that old canard just won’t wash any more.
Other nuclear myths, though, have lingered on. Atomic energy, unveiled by Her Majesty with grand aplomb at Calder Hall half a century ago, still has a hi-tech glamour, an aura of somehow being “the future”. The reality that atomic plants are basically steam engines staffed by thousands of casual workers who would otherwise be picking strawberries or digging up roads somehow never impinges. Perhaps one of the most shocking images post-Fukushima, was of unskilled workers hosing sea water on to the smouldering wreckage. Not here the calm, fatherly figures in their white lab-coats in front of consoles worthy of the Starship Enterprise.
But there are solid, practical reasons why nuclear power relies on casual staff using dustpans and brushes to sweep up radioactive dust, or hoses to cool down spent fuel. Best of which is that it’s cheaper. An enlightening fact about Fukushima, where the tsunami swept over the safety wall, was that at this point on the coast, the land is well above the level of any waves, tsunami or otherwise. It required considerable ingenuity to bulldoze the cliffs down to sea-level to construct a plant that was then potentially at risk. However, the plant operators knew that nuclear electricity is not actually “too cheap to meter”, whatever Eisenhower may have said, and the additional cost of pumping seawater up to the top of the cliffs would have eaten into their bottom line. Hence, the small, if ever so slightly risky, strategy of situating the complex at sea-level.
So the torpedo that has just been launched at the majestic British nuclear ship by the sneaky German energy corporations has hit the most vulnerable part of the nuclear industry – its economic credibility. Among the wreckage, the unpalatable fact is that the electricity produced is not economic and that the scheme has only been kept going by increasingly exotic public subsidies and finance packages (read sub-prime crisis).
That’s not even to mention other economic tricks the industry excels in, such as putting off decommissioning and waste disposal costs into a far distant future and hiving off its disaster and insurance liabilities by, er … basically, ignoring them.
The promise of nuclear was that if its plants were expensive, surely, over time, industry costs would drop, both due to economies of scale and new technology, and that sooner or later, the electricity it produced would become commercial, rather than merely a useful by-product of plutonium enrichment. (The military dimension that even the official programme for Calder Hall acknowledged.) But even as rival energy technologies have dropped steadily in price, nuclear has done the reverse.
Nowadays, a typical scheme involving multiple reactors on one site, puts you back $25bn! The money was not to be produced up-front, of course, but created by complex financial packages based on debt, not equity. The sums involved, the “paper” floating on the underlying asset – the nuclear complex – run into the trillions. Even well-run German multinationals have trouble coping with that, unaided by the state. And evidently, RWE and E.ON are sceptical about the long-term ability of the UK’s “here today, gone tomorrow” coalition government to prop up their nuclear plans.
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