The Real Cost of Nuclear Power

Cheap nuclear power?

Few nuclear power plants have been built in Europe or America over the past twenty years. That's not because of the dangers of nuclear energy, which governments have pers istently played down, but simply a matter of economics. Nuclear has not been competitive with other sources, especially coal and gas (see [1]Nuclear Renaissance Runs Aground and other articles in the series,SiS 40).

But as we are committed to reducing our use of fossil fuels, the nuclear industry is trying to make a comeback. A recent UK White Paper tells us that it is the most cost-effective low-carbon generation technology [2].

We've been here before. When the first nuclear power plants were being built in the UK, we were promised that they were going to be a uniquely economical way of producing electricity. There were even claims that electricity meters would soon be obsolete because the price would be so low it wouldn't be worth measuring how much we used. In fact, nuclear power has turned out to be very expensive, which is why the Thatcher government was not able to sell the nuclear power stations when it privatised the rest of the electricity supply industry. The taxpayer was left to pick up the tab for the cost of decommissioning and disposing of the waste, and the bill is £72bn and rising (see [3] Nuclear Industry's Financial and Safety Nightmare , SiS 40).

This time, the g overnment assures us, things are going to be different. Nuclear energy will not be too cheap to meter, but it will produce clean electricity at a competitive price. That will make it an attractive investment for private industry, which will bear the costs of building, operating and decommissioning the plants. The government will only have to give a clear go-ahead so the process can begin, streamline the planning process to avoid ‘unnecessary' delays, and set up some scheme whereby a small fraction of the money paid by the consumers will be put aside to cover the costs of decommissioning and waste disposal. The government will neither have to contribute any taxpayers' money nor get involved in organising new ways of producing and distributing electricity. It will be a simple matter of disconnecting the old coal and gas powered stations and plugging in the new nuclear plants [2].

However, a recent report from Citigroup Inc, the world's largest financial services network, paints an entirely different picture [4]. They point out that the UK is the only country where new nuclear is currently being proposed without financial underpinning from the state. They see little prospect of any new nuclear stations being built in the UK unless the government provides substantial subsidies in one form or another.

The claim that nuclear energy will be self-financing depends on assumptions that are out of line with other current estimates. If the government commits us to a heavy dependence on nuclear power and only afterwards realises that subsidies are required to get the plants built and running, we will have written the industry a blank cheque.

There is no need to go for nuclear energy at all, because renewable sources such as wind, solar, biogas, tidal and so on are capable of supplying enough energy (see [5] Green Energies 100% Renewables by 2050 , ISIS publication). Furthermore, while the cost of nuclear energy keeps rising, that of renewable energies is falling as the technology improves. Since 1990, for example, the cost of solar photovoltaic power in the US has fallen by about half in real terms (i.e. after correcting for inflation) and while it was then about four times as expensive as grid electricity it is expected to reach parity in 2015 [6].

That is why Germany has chosen not to build new nuclear plants but to meet its carbon targets by switching to renewable sources [7] ( Germany 100 Percent Renewables by 2050 , SiS 44) . It also means to keep its industry strong by becoming a world leader in renewable technology.