Report: Nuclear Received 4 Times More Subsidies Than Solar in CA

[kristopher]

Report: Nuclear Received 4 Times More Subsidies Than Solar in CA

“Federal dollars per new megawatt-hour for distributed solar are infinitely lower.”
HERMAN K. TRABISH: AUGUST 28, 2013


California’s nuclear energy industry has received four times more federal support than the state’s distributed solar builders over a period six times as long, according to a new report.

“California’s nuclear power suppliers have benefited from over $8.21 billion (in 2012 dollars) in subsidization over the last half century,” according to the report Ask Saint Onofrio: Finding What Has Been Lost in a Tale of Two Energy Sources by Nancy E. Pfund and Noah W. Walker of Silicon Valley venture capital firm DBL Investors.

Distributed solar systems, they found, have earned $2.17 billion in tax credits or direct payments through 2012 from the federal investment tax credit (ITC) and the 1603 Treasury Grant programs, which began in 2007.

The 56-year-old Price-Anderson Act’s liability protection for nuclear plant operators and tax breaks for the decommissioning trust fund earnings together account for an estimated $164.1 million in annual federal support.

The legislators who passed the Price-Anderson Act expected it to sunset after ten years, yet it is authorized through 2020...

http://www.greentechmedia.com/articles/read/Report-Nuclear-Received-4-Times-More-Subsidies-in-CA-Than-Solar?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily

[Niceguy1]

1. kind of misleading

..50 years of support in current dollsrs?

[kristopher]

2. That is the standard way an economic analysis is done over time

Thanks for your comment.

What would be wrong would be to compare the price of something in 2013 with the price of something in 1913 and not adjust for the purchasing value of the money.

Would a whole chicken for $0.05 in 1913 be more or less expensive than a whole chicken for $5.00 in 2013?

It's standard practice and it's standard for very good reasons.

[David__77]

3. There wasn't much in the way of solar power in 1963, so I think this graphic is silly.

And it's fine to show the cumulative, but what about the marginal contribution as well? That would clearly show that the gap is narrowing in the last few years. Weird way to present these data...

[kristopher]

4. That would be a reasonable position if you only read the snip posted...

...and ignored the article, the other graphics showing the trajectories of production, and the entire study (available by the link included in the body of the article).

Ideally subsidies are public money given to promote the development of a good that society thinks is needed. It isn't intended as a way to hide the costs of that good over the long term. If we are trying to determine whether a subsidy is "successful" we need to look at how they affected the developmental stage of the good. Since that occurred for nuclear in the 60s, that is the period that must be examined to make a valid comparison.

A tangential note: another aspect of how subsidies work is the issue of external costs - the practice where we shift the true costs of something by forcing the public to pay for it. Take the example of fossil fuels - by not charging for the damage done by their waste products any alternative product whose benefit lies in dealing with those waste products in a more effective manner is at a competitive disadvantage. When this is done consciously and deliberately by law in the face of mechanisms allowing the proper pricing of the externalized cost, it too is considered a subsidy.

[David__77]

5. Reasonable points.

And, from that perspective, then perhaps there should be no subsidies to an industry that has had a reasonable chance to get past an initial R&D-intensive phase. I'm not sure though that you could say you've done that with either nuclear or solar power. There have been big changes in nuclear power since the 60s.

If the argument is that solar should be fostered because it is inherently a good thing for society, and that nuclear should not because it is not - then that would be a more straight-forward argument anyway. I like the idea of solar and especially in residential applications. It need subsidization. On the other hand, I wish that they would remove the protectionist policies aimed against the Chinese PV firms - shouldn't we want this stuff as cheap as possible?

[kristopher]

6. The developmental phase for a new industry isn't just R&D.

It could also reasonably include deployment to a stage of self sufficiency. In the case of technologies building fundamentally new infrastructures like electric autos and renewable energy, most people recognize that the market dominance of the present system has allowed a skewing of the competitive landscape via structural economic policies that favor the status quo to a degree that "competition" by an alternative system is excluded no matter how many advantages the competition offers.

Nuclear power works well within the economic structure of the technologies around which our present electric sector developed. With a 20% market share, they cannot be said to be suffering from a playing field disadvantage. New product R&D as well as new product deployment have received everything the industry asked for as late as 2005. Their wish list was not only granted in full, but their complaints about the public's ability to block deployment of more nuclear were heard; resulting in laws being passed the placed draconian restrictions on not only the public directly, but also legislative bodies and the courts.

They are STILL failing because of the extremely poor economics of nuclear power itself.

Part of the process of preparing the package of policies for the nuclear revival was a full review of nuclear technology by MIT published in 2003. Alternatives (including thorium and other breeder technologies) were studied and found to offer limited advantages over the once thru uranium cycle; so the policies were set around that approach.

Now that those policies have failed - and considering the groundwork accomplished in preparing them and the fact that none of the current crop "new" technologies being touted are actually new - it is difficult to see the push for more nuclear support in a positive light.

There are various projections for when it would be appropriate to end subsidies for renewables, and nearly all of them have some validity. I'd like to see strong support for solar and wind in the US, but more to encourage a strong domestic industry than any concern about the overall global trajectory of those technologies. Price parity with centralized generation is already a reality in enough places to ensure the continued progress on building out a manufacturing infrastructure - but it would be wonderful for the sake of the climate if we accelerated the process to the maximum degree possible.