The above statement is true…if you swap the words “any of the alternatives” and “nuclear power” around! The nuclear industry will often quote figures comparable to natural gas powered stations, however the critics of nuclear energy say that its true costs are much higher, as much as 3 times higher according to the NEF, making a “nuclear renaissance” unlikely.
This is further backed up by an MIT study (news article with link to it here) that similarly concluded that Nuclear energy was substantially more expensive than fossil fuels, even if you factor in future price hikes and climate change mitigation. Furthermore, this report from the Citi-Group Bank (here), whom we can hardly accuse of being a bunch of fluffy tree huggers, paints a similar picture.
And the current omens suggest the reports quoted above may actually have underestimated the costs of new nuclear reactor construction. The first of the new EPR’s in Finland is years behind schedule and considerably over budget. It’s likely final cost will come in at € 8 Billion (up from an initial bid cost of € 2.5 Billion), or about £3,250 per installed kW, v’s the BWEA estimates for wind of around £1,300-1,600 per kW or about £1900-2200 with intermittency backup.
While one can blame first build factors for these cost overruns in Finland, the 2nd of the EPR reactors, being built in Flamenville, France is being hit by similar delays and cost overruns, with an anticipated cost now of the order of €8.5 Billion.
Overall, it seems likely the installation (nevermind decommissioning costs) of new Nuclear reactors will likely prove to be much higher than alternatives energy sources. And of course Renewables come with no decommissioning costs.
Indeed a big financial question mark over Nuclear is these decommissioning costs, we simply don’t know how high they’ll be. The nuclear industry, predictably, puts out estimates that are so low they actually defy logic ($2.5m-0.2m /MW of plant). Unfortunately the actual decommissioning costs are coming in a good deal higher. For example the Brennillis reactor in France, despite its tiny output of only 70 MW is coming in with a final decom cost in the order of €480m, that works out at €6.86m/MW or around $9.0m/MW. And decomissioning figures from the UK are hardly any better, around £2 Billion per Magnox reactor is now typical, or around £8-6m/MW or roughly $12-9m/MW, slightly higher than the French costs. That means the Nuclear industry are off in their figures by a factor of 3 to 45! Again, do we really want to trust people who are so bad a maths with running nuclear reactors!
Then there’s the long term disposal of nuclear waste. The Yucca mountain facility in America, prior to being cancelled, was coming in at a final cost of €96 Billion. I’ve yet to hear any reliable estimates for the Onkalo facility in Finland, thought I suspect it will probably come in at a good deal less, but of course the Finns have a lot less waste to dispose of than the USA (or France or Japan or the UK). Deep geological disposal is by far and away the cheapest method of disposing of nuclear waste, thought inevitably, the nuclear industry horrified by such huge costs, and well aware of public opposition to such facilities (NIMBY’s and all), have been trying to promote a variety of ridiculous and unworkable ideas as alternatives to deep geological disposal (see myth X and XI).
The supporters of nuclear energy will often attempt to counter the above high costs related to installation and decomissioning costs of nuclear, by claiming that it has lower LCOE costs than renewables. Again, this is not so, the following article and study both put the costs of wind energy at $36 – 60/MWh (and falling) while nuclear sits at 55 – 66/MWh and rising (MIT study on that here). And the figure quoted for nuclear in all likelihood does not fully account for the long term “excess baggage” costs in nuclear discussed above (which of course won’t be surprising as we don’t know what they are yet!).
Indee its been let slip from the negotiations between the Tories and EDF energy (who are seeking a subsidy to build a nuclear plant in the UK) that the likely economic running cost of nuclear power in the UK is in the order of £100/MWh, or about $140/MWh at present exchange rates.
While offshore wind and solar power are still rated as more expensive than nuclear (on an LCOE basis), this situation is rapidly changing, and the costs of both is expected to fall to levels similar to those of onshore wind (or at the very least, less than nuclear power) within the next decade.
Nuclear energy supporters will usually counter with lots of complaints about “intermittency“. As I point out in Myth V, this is something of a red herring. Furthermore it ignores the fact that the bulk of any nation’s energy is consumed by heating/cooling and transportation fuel (nuclear electricity finds itself in the same boat as wind/solar PV in trying to replace these energy sources).
Indeed even as far as 20-30% of energy that goes into electrcity production is concerned, nuclear is generally only able to supply baseload power, or some of the “load following” electricity (although it should be noted that not all nuclear plants can perform load following, indeed typically they aren’t used for these purposes). Like renewables, nuclear still needs hydro-electric or fossil fuel power stations on the grid to provide “peaking power” output, as well as emergency cover in case of an unexpected shut down.
Consequently once we exceed around half a nations electricity output (12-15% of Total Final Consumption) with nuclear, the same cost issues that apply to renewables also apply to nuclear. And of course, given that renewables have, in many cases, lower installation and LCOE costs than nuclear, one has to query where in the grid is the wedge where nuclear can actually work. Even if such a wedge exists, it is likely to be relatively thin.
Bottom line, nuclear power is expensive energy. A few subsidies here and there won’t cut it. Nuclear power can only exist with a steady stream of government financial help to some degree.