Logic Question – If the plants built during the first nuclear age were so expensive, why are they such low cost producers today?
It does get frustrating sometimes to engage in civil conversations with ideologically static people who refuse to recognize illogic. The other day I was trying to explain to someone that nuclear fission has the demonstrated potential for be the lowest cost source of reliable electricity outside of hydroelectric power. After all, the numbers are readily available to back up that statement. For 2007 here are the figures for total production costs in US dollars per megawatt-hour:
- Nuclear – 17.60
- Coal – 24.70
- Gas – 67.80
- Petroleum – 100.26
My debate opponent dismissed those numbers because they did not take into account the capital investment required for the production facilities. She then tried to claim that power from new nuclear plants would be much more expensive. I asked why and showed numbers that I use for capital cost computations. She wanted to double or triple some of my assumptions for those investment costs and for assumed interest rates. I asked for the basis of that action and she claimed that history shows that nuclear projects experience vast cost overruns.
When I asked how it was that our existing fleet of nuclear plants is essentially paid off with plenty of life left in all of the operating facilities she got red in the face and walked away. I was even ready to agree that there had been plenty of cost increases, but after all of those were taken into account, steady operation has generally resulted in adequate cash streams to pay of the debt and get to a point where the plants are essentially cash cows that can produce hundreds of millions in net profits every year. What that tells me is that turtles really do prosper in lengthy races.
Non-state of the Union
Several of my colleagues have asked me what I thought about the omission of nuclear power in the list of clean energy options provided by President Obama in his speech to the Legislative Branch on Tuesday night. Jason Ribeiro at Pro-Nuclear Democrats produced a post that does a pretty good job of explaining my own reaction – President Obama “Challenges” Laws of Physics. Our president is a reasonable man who is getting unreasonable advice. The only solution to that situation is to work hard to break in on the conversations and demonstrate that the popular prescriptions are flat out wrong for the country.
Please understand, I am not in favor of a massive program of public giveaways to any industry, especially the large power industry. I am not entirely opposed to government involvement in plant ownership, however. Electricity is a vital part of our modern infrastructure; if the free market is not willing to invest in the disruptive application of well demonstrated technology that can make coal burning obsolete, then perhaps it is time for the rest of us to do so. As taxpayers, we can pool our resources and own the plants so that the massive profits that they can produce after construction go directly back into the common pool of resources.
Of course, that is not the “free market” approach, but I am getting more and more disenchanted with the way that the leaders of the free market make selfish decisions every day. I am certain that one of the fears holding back a vast private investment in nuclear power projects is that a massive new build of nuclear plants will have exactly the same effect on energy prices that the first nuclear age had – prices for energy fuels collapsed in 1985 as nuclear generated electricity displaced more and more oil, gas and coal (in that order) and did not really recover until about 15 years worth of no new construction had gotten rid of the “overcapacity” problem.
If the public is the capacity owner, that effect is not so bad – we get the benefit of lower energy prices to make up for the fact that our power plant investments are not paying off quite as quickly as they might have in a time of high energy prices.
Reconsidering used fuel solutions
After 25 years of pushing a rope, the Nuclear Energy Institute has changed its stubborn stance about used nuclear fuel. The official trade organization of the nuclear industry is now willing to publicly state that we are currently handling used fuel safely and that the current methods work well enough so that there is no immediate need to do anything different. This is from a Tuesday, Feb 24, 2009 post at NEI Nuclear Notes titled Experts Weigh In On How The U.S. Should Handle Its Commercial Nuclear “Waste” that quoted its new President, Marv Fertel:
First, we recognize that since used nuclear fuel can be safely and securely stored for an extended period of time, interim storage represents a strategic element of an integrated program. Therefore, we can continue on-site storage of used reactor fuel while candidates are identified for volunteer private or government-licensed sites for consolidation of used nuclear fuel.
The industry would also like to get its money back – at least the $22 billion that has been collected and accumulated in the nuclear waste fund that was not spent on licensing and characterization efforts at Yucca Mountain. It would also like to retain most of the $806 million per year that it is currently paying the government for the service of used fuel storage since the government has been in violation of that contract for more than a decade already.
That amount of cash would go a long ways towards building regionally sited facilities for dry cask storage and for research into ways to effectively recycle used fuel in order to extract the 95-97% of the initial potential energy that remains after our current once through cycle.
You can find out more about the used nuclear fuel discussion at NationalJournal.com’s post titled How Should America Handle Its Commercial Nuclear Waste? I have to admit to some amusement at the particular banner ads that were running on that site when I visited. Just in case they change before you have a chance to see them, I captured a screen shot.
