Environment & Energy
Related: About this forumWhy the free market can't do nuclear power and our industry is slowly declining (UK)
By LORD FOULKES OF CUMNOCK
PUBLISHED: 15:58 EST, 6 May 2013
House of Lords debates dont often sound unanimous. When it does happen it tends to mean that there is something seriously wrong for the Government.
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The problem is that the market isnt interested. As a business venture, nuclear power stations are unique and improbable. Building them takes up to ten years and costs around £7bn.
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As Viscount Hanworth said: Nuclear power is virtually incompatible with private enterprise. Only a state can contemplate an investment that might take two generations to pay dividends.
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With no competition to drive down prices, EDF has the Government right where it wants them.
Its first step was to get the Coalition to drop its promise that there will not be subsidies for nuclear power. The next step was to begin negotiating these subsidies. By some calculations, these could run to £50bn over the course of the proposed reactors lifespan.
Read entire article: http://www.thisismoney.co.uk/money/markets/article-2320322/LORD-FOULKES-Why-free-market-nuclear-power.html#ixzz2SctEv5GX
£50bn = $77.6bn
The writer makes the common mistake of confusing the nation's energy use with electricity use. Nuclear provides 19% of their electricity but only 6% of their energy.
FBaggins
(26,727 posts)With the possible exception of hydro (not much of an option in England), there aren't any clean power sources that can get free market backing. Government needs to encourage them - either with taxes on dirtier forms of production, or incentives for cleaner forms.
But here's the real test. Put a hard tax on carbon that accurately reflects the external costs. See what the free market picks.
kristopher
(29,798 posts)The subsidies for renewables - which have totaled a very small fraction of those for nuclear - have resulted in a steadily declining cost curve that now positions renewables competitively with fossil fuels. The more we learn, the lower renewable energy costs go.
Nuclear, which has been far more heavily subsidized over decades, stands in stark contrast; presenting a steadily rising cost curve that has priced it out of the market. The more we learn, the more nuclear power costs.
The largest cost by far to my mind is the delay advocacy for nuclear is causing to the effort to transition away from fossil fuels. It is a strong crutch for the entire fossil fuel industry,.
FBaggins
(26,727 posts)Just support a nice high carbon tax that makes coal clearly more expensive than cleaner alternatives and let the market decide.
Except... we both know that you'll just make noise pretending to support a carbon tax if it was possible politically. But sadly (sigh) it isn't possible. When we also both know that if the playing field was that level, nuclear power would win the day.
It's the same reason why you (falsely) tried to pretend a couple years back that a UK move to equally support all carbon-free generation was really a subsidy for nuclear power.
Taken in the more current context - offer offshore wind the same strike price and term (2/3rds of expected lifetime) that they're talking about using for nuclear power... and offshore wind in the UK would die on the vine.
kristopher
(29,798 posts)...that have resulted in steadily increasing costs.
And the results of the pittance paid to date in subsidies for renewables that has resulted in near price parity with fossil fuels.
Your focus on fledgling offshore wind in your example is a mark of your desperation. You know that over the history of nuclear the public has largely paid for the electricity generated twice since the total subsidies have largely been more than the total value of all the electricity the nuclear fleet has generated.
Nuclear is a prime example of how NOT to use subsidies.
Union of Concerned Scientists: Nuke Subsidies Exceed Value of Electricity Produced
(From Executive Summary)
Conspicuously absent from industry press releases and briefing memos touting nuclear powers potential as a solution to global warming is any mention of the industrys long and expensive history of taxpayer subsidies and excessive charges to utility ratepayers. These subsidies not only enabled the nations existing reactors to be built in the first place, but have also supported their operation for decades.
The industry and its allies are now pressuring all levels of government for large new subsidies to support the construction and operation of a new generation of reactors and fuel-cycle facilities. The substantial political support the industry has attracted thus far rests largely on an uncritical acceptance of the industrys economic claims and an incomplete understanding of the subsidies that madeand continue to makethe existing nuclear fleet possible.
Such blind acceptance is an unwarranted, expensive leap of faith that could set back more cost-effective efforts to combat climate change. A fair comparison of the available options for reducing heat-trapping carbon emissions while generating electricity requires consideration not only of the private costs of building plants and their associated infrastructure but also of the public subsidies given to the industry. Moreover, nuclear power brings with it important economic, waste disposal, safety, and security risks unique among low-carbon energy sources. Shifting these risks and their associated costs onto the public is the major goal of the new subsidies sought by the industry (just as it was in the past), and by not incorporating these costs into its estimates, the industry presents a skewed economic picture of nuclear powers value compared with other low-carbon power sources.
SUBSIDIES OFTEN EXCEED THE VALUE OF THE ENERGY PRODUCED
This report catalogues in one place and for the first time the full range of subsidies that benefit the nuclear power sector. The findings are striking: since its inception more than 50 years ago, the nuclear power industry has benefitedand continues to benefitfrom a vast array of preferential government subsidies. Indeed, as Figure ES-1 (p. 2) shows, subsidies to the nuclear fuel cycle have often exceeded the value of the power produced. This means that buying power on the open market and giving it away for free would have been less costly than subsidizing the construction and operation of nuclear power plants. Subsidies to new reactors are on a similar path...
Doug Koplow is the founder of Earth Track, Inc., and has worked on naturalresource subsidy issues for more than 20 years, mainly in the energy sector. He holds a B.A. in economics from Wesleyan University and an M.B.A. from the Harvard Graduate School of Business Administration.
The Union of Concerned Scientists (UCS) is the leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choice.
Notes on Chart:
IOU and POU refer to Individually Owned and Publicly Owned units
The dotted lines break the chart into 3 temporal segments where the bars are the subsidy amounts and the dotted lines show EIA averaged electricity prices for the period in question.
Download full report at http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_report.pdf
Download Executive Summary at http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_summary.pdf
From Press Release:
The most significant forms of subsidies to nuclear power have four principal objectives: Reduce the cost of capital, labor and land through loan guarantees and tax incentives; mask the true costs of producing nuclear energy through subsidies to uranium mining and water usage; shift security and accident risks to the public via the 1957 Price-Anderson Act and other mechanisms; and shift long-term operating risks such as radioactive waste storage to the public.
The report evaluates legacy subsidies that helped build the industry, ongoing support to existing reactors, and subsidies available for new projects. According to the report, legacy subsidies exceeded 7 cents per kilowatt-hour (¢/kWh), well above the average wholesale price of power from 1960 to 2008. In effect, the subsidies were more valuable than the power the subsidized plants produced.
Without these generous subsidies, the nuclear industry would have faced a very different market reality, said Doug Koplow, the author of the report and principal at the Cambridge, Massachusetts-based consulting firm, Earth Track. Many of the 104 reactors currently operating would never have been built, and the utilities that built reactors would have been forced to charge ratepayers even higher rates.
http://www.ucsusa.org/news/press_release/nuclear-power-subsidies-report-0504.html?utm_&utm_medium=pr&utm_campaign=NukeSub-pr-2-23-2011