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Atomic energy technology, politics, and perceptions from a nuclear energy insider who served as a US nuclear submarine engineer officer

Important analysis of the effects of public policy on nuclear power

November 16, 2007 By Rod Adams

Jack Spencer at the Hertiage Foundation has published an important new paper with a substantial list of references that traces the effects of a shift in US public policy during the period from 1953-1980 regarding nuclear power from strong support to overt discouragement and over regulation. The paper is titled Competitive Nuclear Energy Investment: Avoiding Past Policy Mistakes and it is a must read for people who want to make the current renaissance in nuclear energy both real and sustainable.

I had one minor quibble with the paper, like many people (even yours truly on occasion), Mr. Spencer was a little careless with his units in one small section of the paper. In the first paragraph under the subheading of Overregulation Leads to a declining industry, he wrote:

Prior to 1981, electricity cost an average of approximately $600 per kilowatt hour. After 1981, electricity cost two to six times that rate,[20] which means that either consumers paid significantly more or utilities incurred losses if they did not charge market prices. Neither circumstance was sustainable.

Being the kind of guy I am, I sent him a note. Here is an excerpt from that note:

The statement needs to be revised – we certainly have never paid $600 per kilowatt hour – today’s average electricity cost in the US is about 8.5 cents per kilowatt-hour. The average household use of electricity is more than 11,500 kilowatt-hours per year. (note: The original note said 11,000 kilowatt hours per month, the post was corrected at 6:05 pm on 16 Nov 2007.)

Here is a suggested revision:

“Prior to 1981, electrical power plants cost an average of $600 per kilowatt of generating capacity. After 1981, plant capital costs increased to two to six times that amount, [20] which means that consumers paid significantly more or utilities incurred losses if they did not charge prices high enough to cover the capital costs. Neither circumstance was sustainable.”

As I completed reading the paper, I noticed that Mr. Spencer has also published another paper, along with Nick Loris, titled Congress Should Not Overlook Benefits of Nuclear Energy. I think I have some more reading to do this morning!

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About Rod Adams

Rod Adams is Managing Partner of Nucleation Capital, a venture fund that invests in advanced nuclear, which provides affordable access to this clean energy sector to pronuclear and impact investors. Rod, a former submarine Engineer Officer and founder of Adams Atomic Engines, Inc., which was one of the earliest advanced nuclear ventures, is an atomic energy expert with small nuclear plant operating and design experience. He has engaged in technical, strategic, political, historic and financial analysis of the nuclear industry, its technology, regulation, and policies for several decades through Atomic Insights, both as its primary blogger and as host of The Atomic Show Podcast. Please click here to subscribe to the Atomic Show RSS feed. To join Rod's pronuclear network and receive his occasional newsletter, click here.

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