Thursday, October 30, 2008

Nuclear Energy Costs

Every responsible study has shown that nuclear electricity is as cheap as any of the non-fossil alternatives and is competitive with fossil-fired electricity.

For example, the International Energy Agency and the Organisation for Economic Co-operation and Development's Nuclear Energy Agency determined the costs as follows:

Cost per MWH in US Dollars

Discount Rate 5% 10%
Coal 25-50 35-60
Nat Gas 37-60 40-63
Nuclear 21-31 30-50
Wind 35-95 45-140
Micro Hydro 40-80 65-100
Solar PV ~150 200+

The University of Chicago compared several detailed calculations with a range of discount rates and summarized the results thus:

Cost per MWH in US Dollars

Coal 37-49
Nat Gas 56-68
Nuclear (assuming old designs) 65-77
Nuclear (assuming new designs) 36-55
Nuclear (assuming advanced-fuel designs) 57-64
Wind 55-77
Solar PV 202-308
Solar Thermal 158-235

A question that immediately presents itself is, why do the two studies give different numbers? The answer is that every study depends on assumptions, such as interest rates and fuel costs. Both these factors, and other factors such as taxes, pollution controls, and equipment lifetimes vary in time and place. This introduces an opportunity to do mischief, since a motivated commentator can pick-and-choose results to bolster his intended conclusion. These numbers only have significance if they're calculated on equal terms and only if they're read relatively, not absolutely.

A common argument being made now is that nuclear construction costs have risen so fast they have rendered nuclear plants too expensive to build. This argument is anchored on a report about some calculations made by Cambridge Energy Research Associates (CERA) that allegedly show a cost increase of 185% between 2000 and 2007. Imagine, an almost tripling of costs in seven years! However, CERA doesn't publish the results in a public forum; nor does it show the calculations so they can be verified. Indeed, there's no way even to know what methods it used.

It is true, though, that costs have risen strongly since China and India began their notable advances in material progress. These cost rises apply to all kinds of construction and, in particular, apply to alternative energy sources.

Here is some information on the cost of windpower construction, which has doubled:

And some data (Oct. 28, 2008) on solar-electric construction. It has essentially held constant, but at US$4700 per KW rated power or over US$20,000 per average KW, it still is hopelessly expensive. What this shows is that the pressure on material prices has kept solar energy from getting cheaper.
Finally, here is some information from Power Engineering International on nuclear construction costs, which shows a cost increase of 125%, not much different from the increase for windpower.

What all these numbers show is what energy analysts have been telling us right along. Nuclear energy is as cost-effective as any non-fossil energy source, even ignoring the intermittency problem of part-time energy sources. But if intermittency is considered, then the comparison widens. There aren't any practical ways to overcome intermittency, as shown here. But if there were some way, the economic and environmental costs would drive the total cost out of sight.

As the world grapples with this issue, one other point has to be considered. A new generation of nuclear power plants is being born. These new plants use passive safety systems so the active systems can be simpler, thereby reducing costs. Furthermore, they operate at higher efficiencies, lowering fuel costs. As shown in the University of Chicago data, these improvements make nuclear energy cheaper than any alternative other than coal.

Wednesday, October 29, 2008

Energy Fuel Supplies

When energy is discussed, the subject of fuel reserves often arises. In particular, opponents of nuclear energy point to a few decades of proven reserves as a reason to abandon one of the very few effective countermeasures available against climate change.

The point that needs to be understood is that proven reserves are only a fraction of the resources that really exist. For example, the world has less than a three-years' supply of oil if only proven reserves are considered. No one really believes the world will run out of oil in three years. In comparison, projected resources show over 600 years' supply of oil, maybe a thousand years' supply of coal, and 30,000 years' supply of nuclear fuel. Even if all the world's electricity comes from nuclear energy and the rate of electricity use triples, nuclear fuel will last over a thousand years. Renewable energy and energy efficiency can stretch the supply longer. A thousand years should be enough time to develop other solutions, such as fusion energy and energy storage.

The best available information from the most authoritative sources can be found here.