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Nuclear energy – a continuing blowout in costs

Nuclear economics just don’t add up Sydney Morning Herald MICHAEL R. JAMES December 24, 2009 -“………………..the first-build of the most evolved advanced model in production, Areva’s EPR, which was supposed to be simpler, more efficient, cheaper and faster to build. In Finland’s Olkiluotu a 50 per cent blowout in costs (to $US6.4 billion so far, lawsuits pending) and doubling in construction time (from 3.5 years to at least seven years) is typical of nuclear projects over the decades.

Today Areva concede that construction of a similar reactor of 1.6 gigawatts would be $US8 billion ($A9 billion).The reasons why nuclear plants routinely run into such troubles are that it is hugely capital intensive so delays greatly add to the cost of capital long before any revenue is generated. Construction is extremely complex, which is greatly compounded by safety regulation — this was another major cause of the slowdown at Olkiluoto. For these reasons the industry prefers to use “overnight” costs, which are the costs as if a plant was constructed overnight at today’s prices………..

Nuclear advocates always cite “next-gen” designs and purported much swifter and cheaper construction but the figures given above are the actual costs of the plants being constructed in Europe today, not even the much higher industry estimates reported by Grunwald for the proposed US plants. The timetable of this construction is anyone’s guess except that history warns us to be pessimistic………….

Those are just the construction costs. As is well known, liability insurance needs to be covered by government. The other big cost is the decommissioning of reactors. Even with many of the world’s 439 existing reactors approaching the end of their productive lives, so far none have been decommissioned. The world’s first commercial nuclear power generator, Calder Hall at what is now called Sellafield (previously Windscale), was turned off in 2003. It has been estimated by the UK industry that full decommissioning of Calder Hall, if ever done, will cost about $2 billion at today’s prices. Meanwhile, old plants need continuous maintenance and high-security against decay and incursion including against potential terrorists……

The nuclear industry is not a new one but an old mature one. For more than 50 years it has consistently over-promised and under-delivered, yet its advocates continue to propose that governments should provide massive subsidies to nuclear construction, provide unlimited liability insurance, assume most of the decommissioning costs and — after 50 years — continue to search for the elusive “permanent” storage of high-level waste.

There are not minority views and indeed are not contested by the nuclear industry, or the Wall Street Journal, or Lazards the merchant bank. Or many scientists. Here is commentary from the world’s top science journal Nature (W.Patterson, Vol 449, 11/10/07): “As climate and fuel security dominate the energy agenda, the battle between traditional and innovative electricity intensifies around the world, notably in fast-growing economies such as China. After half a century, nuclear power is the ultimate in tradition. It needs climate more than climate needs it. To avert catastrophic global warming, why pick the slowest, most expensive, most limited, most inflexible and riskiest option? In 1957, despite the Windscale fire, nuclear power was worth trying. We tried it: its weakness proved to be economics, not safety. Now nuclear generation is just an impediment to sustainable electricity.”

It is a clear enough choice. The economics and the long time to approve and build show nuclear is not the smart choice,

Nuclear Power | Renewable Energy

December 24, 2009 - Posted by Christina Macpherson | 2 WORLD, business and costs | antinuclear, AREVA, nuclear, nuclear secrecy, nuclear wastes