Australia is in the very fortunate position of having a very large amount of land and a low population, located in an area of the world exposed to the roaring forties wind pattern and some of the highest levels of solar radiation in the world. For that reason it is technically conceivable that Australia could meet a very high proportion of its electricity needs from renewable energy. It is much more challenging for other countries around the world with much higher population densities that make up the vast bulk of global emissions. However, writing off nuclear power on the basis of the green groups’ slogan ‘too slow and too expensive’ is in fact too dangerous.
Japan has switched off all but two of its 54 commercial nuclear reactors in the 12 months since the Fukushima meltdown. Unfortunately it has been replaced, not with renewables and energy efficiency, but by fossil fuels and demand curtailment, as illustrated in the chart below taken from the New York Times.
Japan’s power supply by source 2010-2011
Source: New York Times
Right now the LNG industry, while it likes to tell the Australian public it is saving the planet by replacing coal, is in fact celebrating the demise of nuclear power in Japan. De La Rey Venter, Shell’s Global Head of LNG, stated in relation to the Fukushima nuclear disaster:
“Japan had quite an aggressive plan for new-builds [of nuclear power plants], but that program will be challenged by public acceptance issues and that program will be less comprehensive and will take longer time than what was expected. Much of that structural change gap will be filled by natural gas.”
According to Tatsuo Hatta, Professor Emeritus at Osaka University, the Japanese Government is now re-evaluating its 25 per cent emissions reduction pledge now that nuclear is unacceptable in the country.
This is not something to celebrate if you are concerned about global warming.
Is nuclear too slow?
Saying nuclear power is too slow to be considered an important part of the solution to global warming is mischievous at best, even once you acknowledge the long decade-plus lead times involved in rolling-out new nuclear power stations. Sure the lead times are too long for nuclear to be considered the sole solution, but we’ve got 389 reactors already in operation (once we deduct the Japanese reactors), and nuclear produced 13 per cent of the globe’s electricity supply in 2010. These don’t require any lead-time to make an important contribution. Also last time I looked there weren’t too many nations seriously planning on phasing out fossil fuel power generation within the next 10 to 20 years, not even Germany (which bizarrely still provides subsidies to its coal industry). So even if it took 10 or even 20 years to get new nuclear reactors built, there would be plenty of fossil fuel power stations left for them to replace in conjunction with renewables.
Is nuclear too expensive?
Nailing down a precise cost for nuclear is like trying to walk on quicksand, but it is likely to be competitive with other low emission alternatives. Below is an excellent chart laying out the overnight cost (excludes interest repayments) per kW of capacity for nuclear plants in the United States over time. The blue dots reflect a sorry history of construction time and budget over-runs around the ‘80s and ‘90s. The pink reflect projected costs, first involving academics and government keen to revive the industry. Then there’s the more cautious utilities, and lastly, the risk conscious financial analysts.
Nuclear power plant construction cost in the United States – experience and projected
Source: Mark Cooper (2009) The economics of nuclear reactors – Renaissance or Relapse
One thing is clear from this chart: nuclear power plants ain’t cheap. If we were to take the utilities’ pink projection dots then they are about three times more expensive to build than a gas combined cycle power plant (but with much lower operating costs) and about two times the cost of a coal plant (with equivalent operating costs). So they need an aggressive carbon price to be viable.
Yet while the cost of a new nuclear power plant is extremely large ($5 to $6 billion very approximately for a minimum scale plant), it has one big advantage which makes up for all manner of sins – very high plant utilisation. So while a wind turbine might only cost $1800 to $2500 per kilowatt versus about $5000 to $6000 for nuclear, the nuclear plant’s capacity can be utilised for 85 per cent to 90 per cent of the time, whereas the wind turbine is 30-40 per cent. So the cost per utilised megawatt of capacity is about the same. Where things get tricky is construction time, as this is the Achilles heel for nuclear (whereas renewable plants tend to be very quick to build). If all goes extremely well the plant might be constructed in four years, so the owner will have only accumulated $700 million in unpaid interest. If it extends out to seven years (the average over the 1980s) then it’s closer to $1.5 billion.
In the chart below Daniel Mullerworth of the Grattan Institute has taken all of these wildly different estimates, and then incorporated the financing costs (‘all-in costs’), and converted it into a cost per megawatt-hour of electricity – which is what we actually consume to power our appliances. If you’re incredibly optimistic and wish to ignore past experience, then nuclear is ridiculously cheap. If you are incredibly pessimistic then nuclear is barely competitive with solar thermal let alone wind. But in the middle of the road nuclear looks reasonably competitive with renewable energy alternatives.
A range of estimated costs for new-build nuclear power in the UK, the US and Australia
Source: Grattan Institute (2012) No easy choices: which way to Australia’s energy future? Technology Analysis
If you come across someone who tells you the world should be pursuing nuclear to the exclusion of all other options then tell them they’re dreamin’. But equally if someone tells you that nuclear is too slow and too expensive to consider, ask them for a spreadsheet that explains precisely why.