Thursday, September 27, 2012

Nuclear Power and Costs:

A Surprisingly Complex Issue

I have been reading quite a few articles lately about the costs of nuclear power.  Not surprisingly, they are all over the place.  Some articles cite the high costs of continuing to operate nuclear power plants.  Others cite the high costs of abandoning existing nuclear power plants.  The truth is not always easy to ferret out.

While I can't, in a single essay, fully analyze all the points raised in all the articles, I think it is useful to look at some of the articles and some of the points that have been made.  This blog is my first humble attempt to do that.

The first report I'd like to look at is an argument that maintaining nuclear power at 15 or 20% of the 2030 total energy mix in Japan would actually have a marginally higher cost than phasing it out completely.  This statement comes from a Japan Times report on a speech by Softbank CEO and renewable energy advocate Masayoshi Son.  Since this assertion seemed contradictory to me, I tried to look at a few of the factors mentioned in the news article.  The article indicates that Son mentioned the insurance costs in the aftermath of the Fukushima accident, the costs related to running a nuclear power plant past 40 years, decommissioning costs, and what to do with the nuclear waste.

Now, I must say that the question of how future insurance requirements for nuclear power plants in Japan will be treated is a great unknown.  I have seen no reports on the subject, so consider it an unknown at this point.  However, the other costs that Son mentions surprised me.  The usual assumptions with regard to operation beyond 40 years is that most of the costs of the plant are sunk costs and the continued operating cost is very small.  True, sometimes upgrades are necessary for longer-term operation, but these are normally a very small fraction of the cost of a new nuclear power plant--or for that matter, a very small fraction of the cost of building any kind of replacement power.  Decommissioning and waste disposal will be required whether the plants are shut down today, in 2030, or beyond that.  There may be some marginal differences (yes, more waste will be generated), but they should be relatively small.  They should not be sufficient to make an earlier shutdown of nuclear power plants a more cost-effective option.

On the other side of the equation, the article does not report Son as making any estimates of the cost of replacing existing facilities with new renewable power plants.  Every cost study I have seen indicates that there is a very substantial cost for any replacement power generation facilities, and particularly for solar or wind power plants.

Some measure of the cost of ending nuclear power completely was provided by the Japanese government, which estimated the cost of ending the use of nuclear power in Japan by 2030 at $637 billion for the replacement power needed, and estimated that would nearly double the monthly energy bill of the average Japanese household.  Once again, there is insufficient information in the article to allow me to confirm quantitatively that the numbers make sense, although qualitatively, they do fit my assertion that the costs of building solar and wind replacements would be large.

One article tried to represent both sides of the story--the Japanese government's case that ending nuclear power will be costly, and the anti-nuclear side's case that energy use can be cut.  The article had one quote that households will use 60-70% less electricity by 2030 than they do today, and therefore, would actually have lower electricity bills!  Having lived in Japan, I can tell you that the price of electricity is already much higher than the price in the US--and that Japanese already use far less energy than Americans do.  That may be no surprise, but I will add that the difference is not merely one of wasting less.  Life in a Japanese apaato (the Japanese word for apartment) is far less comfortable and less convenient than life in the average American home.  I was actually told by my utility company that I could not have air conditioning on even in one room and run the washing machine at the same time if I also wanted to keep the refrigerator and some lights on!

Of course, more can always be done to improve the efficiency of energy use, but I doubt that the average Japanese household will be able to reduce energy use by 60-70% in the next 18 years without huge sacrifices.  And without at least some heat and air conditioning, I would predict that one of the consequences will be an increase in the death rate among the ill and elderly.

In the US, the Business Council of Westchester pegged the cost of closing Indian Point at $11.5 billion.  In that case, the estimated impact on electric rates is only 6.3%.  Again, it is hard to get to the bottom of these numbers, but clearly, the loss of one nuclear power plant in a region is not the same as the loss of all nuclear power plants in a country.



  1. “more can always be done to improve the efficiency of energy use ”

    Whoever wrote that childish statement should avoid a job with 'fitness for duty screening'. Obviously that person is smoking the same dope the watermelons are and has a phd in sociology.

    Just for the record, I set my thermostat at the same place Obama does. Where it makes my wife happy! There is not more efficient use of our money than buying electricity to make our home comfortable.

    “the consequences will be an increase in the death rate among the ill and elderly. ”

    Bad news Gail, 100% of the old people are going to die. While we could put us old folks out on ice flows to die, I find it more than a little obscene when society can not provide the energy at a reasonable cost to all its citizens. Somehow we manage to do it in the US.

    My house is just as efficient as any Japan, Germany, or California.

    1. Perhaps, to be precise, I should have said there will be an increase in PREMATURE deaths among the ill and elderly.

      I stand by my comments about there being SOME room for improvements in the efficiency of energy use.

    2. "There is not more efficient use of our money than buying electricity to make our home comfortable." In general I agree, though for heating it's better to burn fuel (natural gas or oil) locally and get 90+% efficiency than to burn it in a power plant with 60% of the heat going into a river.

  2. Gail as much as I would like to give credit to the power industry people living longer, I think that the lions share goes to the medical industry. Certainly as you get older you must manage the stress of very and cold weather.

    Part of working in the nuclear industry is having a questioning attitude. When the term 'premature' is put in front of death, my BS meter pegs high. I suspect that there is not statistically significant difference in life expectancy between having as much electricity as you want and having almost as much as you want at a higher price.

    If you are cooking over an open fire with dried manure instead of with electricity, I suspect that root cause of 'premature' death is things like malaria and cholera.

    “I stand by my comments about there being SOME room for improvements in the efficiency of energy use. ”

    Really! You need someone in your life that will point out the really silly things you say. Consider the law of diminishing returns, for a moment. The pay back period for a low flow shower nozzle is about one week. If you make them a code requirement, it becomes part of the initial cost. However, The pay back period for a hot water heat pump is about twice as long as the life of appliance because of all lost cost things we have done to reduce hot water use.

    Replacing an old SEER 9 Heat Pump with a modern SEER 15 will provide a 100% reduction in power use but at some point there is a large increase in cost to get another 25%.


    Nuclear power plants do not burn fossil fuel. I point this out because my all electric home is comfortable in winter and summer at a low cost. I do not have to worry about a gas leak or carbon monoxide poisoning.

  3. The cost of renewables are dropping rapidly and printable solar cells of high efficiency are available for a big solar rollout that will leave the cost effectiveness of nuclear in the dust whereas the nuclear industry has made little real progress towards either cleaner or more cost effective power generation.
    In any case costs aren't really the biggest issue, the economic state of the nation in japan may be bad but the state of the ecology is what is driving the change. The meltdown of a solar power plant just doesn't happen. A mother faced with the horrific trauma of giving birth to a deformed mutated child does not factor in economic arguments and splitting hairs over which is the more cost effective route is beside the point. The people of Japan want an end to the risk and an end to the radioactive contamination of their homeland and no other nation wants what happened in japan to happen at home. There ARE safer options WHICH ARE COST EFFECTIVE and getting moreso rapidly, no amount of slanting comparisons of apples and oranges will save your industry from it's long awaited demise.