The findings of the recent MIT study bear repeating: to achieve a carbon-free grid, exclusion of nuclear would make the effort much, much more expensive.
the team’s analysis shows that the exclusion of nuclear from low-carbon scenarios could cause the average cost of electricity to escalate dramatically.
Read more in World Nuclear News, or in the report directly, available here at MIT. Note, not only may a near zero-carbon grid be dramatically more expensive, it’s likely to be nigh impossible to achieve without nuclear in the first place. On energy demand vs renewable potential, see the excellent graph about the IPCC estimates here at Climate Gamble:
When arguments about price are not about price
Before I talk more about the economics, I’d like to make an observation: sometimes the discussion on energy cost are mere placeholder arguments. In actual fact people may have other reasons for their stance against nuclear, but they feel more comfortable making economical arguments in hopes of casting nuclear in a negative light – sometimes also comparing apples to oranges, like price per installed capacity, which says nothing about price per actual energy produced (see table).
So if you are one of those who cite price arguments against nuclear, I want to ask you: Is this your main argument against nuclear? Would you support it, if only it were cheap enough for you?
If your answer is no, then there must be other underlying reasons more important to you. Let’s be sincere in our argumentation, and discuss those first. Is it because of nuclear waste? I used to be against nuclear, because I thought the waste posed a drastic level of risk. If this is important to you, I hope you take the time to see how poorly I found that image to match the real world, as I laid out in Nuclear Waste: Ideas vs Reality.
Or is it fear of accidents? Take a look at the damage caused by different energy sources (either over at Statista or Our World in Data), all of which can cause accidents or pose continuous pollution hazards. Energy choices are always about minimizing risk – there is no such thing as zero risk.
Isn’t our goal to make low-carbon energy forms cheaper?
If your answer to my question “Would you support nuclear energy, if only it were cheap enough for you?” is yes, then let me continue by asking, why shouldn’t we apply the same logic to nuclear as we have to renewables?
after they no longer contest the data that shows nuclear to be one of the safest energy forms, as well as one of the most efficient ways of producing carbon-free energy, suddenly the argument shifts to ‘but it costs too much’. It is as if saving human lives and the environment -arguments go out the window.
The logic of cost gets completely reversed compared with how it has been applied to renewables, namely: that with just enough investments, policy changes, and subsidies, we can get their prices down. They will become easier and cheaper to build. But when we have a solution that has the backing of IEA and IPCC as one of the crucial technologies for decarbonisation, just because it’s nuclear, we should throw our hands in the air and stop?
So the question is: do we want to make sure that low-carbon energy sources are as cheap as they can be? Or would you cheer if nuclear costs were to rise?
Let’s look at how nuclear looks like on the price front now, after decades of campaigns against nuclear power.
Is nuclear energy cheap or expensive?
The economical questions of the energy sector are complex. Depending on long or short time prospects of profit returns, on regulatory burdens, taxes, and subsidies of different countries, and many other factors, price estimates on energy vary.
There are very recent estimates which put levelised nuclear costs as very close second to wind (like in Finland, 2017: wind 41, nuclear 42-55 euros/MWh), and WNA levelised cost data from a 2015 report had nuclear among the cheapest alternatives in UK, France, US, and Korea, as well, at between 40-100 dollars/MWh (see graph).
But other estimates, like one from asset management firm Lazard, arrive at puzzlingly different conclusions. This discrepancy can be very confusing to anyone not well versed in the topic. The reason? They use different assumptions about how quick the return of investment should be (note, quick profits are often at odds with environmental goals) and are very optimistic about renewable capacity factors, which skews the price data strongly in renewable’s favour. Does that reflect reality?
They give 30% capacity for solar and 55% for wind. Those figures seem quite ambitious if you compare them to actual capacity factors, like 25-49% for Danish offshore wind, or the US trend at around 33%, not to mention that onshore wind can have capacity factors below 21% – and I can only find that one capacity factor given for wind in Lazard’s report, although they give prices for both off- and onshore wind. Solar at 30% is also rather optimistic, with US solar PV capacity factors at 25-27%, while say, German solar is around 11%.
Lazard also assumes puzzlingly large capital costs for nuclear – their minimum capital cost is set at about two to four times higher than the actual current prices of reactors in Korea, China, France, and Finland, in fact, Lazard’s minimum price is larger even than the capital cost given by the US EIA, even though compared to many other countries, the US has an inflated price on nuclear power.
After changing the parameters in this way, Lazard places nuclear at the mid-range of expenses, together with solar photovoltaic and solar thermal with storage.
Physicist and Finnish Ecomodernist Jani-Petri Martikainen, meanwhile, explains more about discounting and choice of other variables in his article, where he uses IPCC values and arrives at nuclear being the most favourable low-carbon option.
If you would like to try out how LCOE calculations are made, here is a simple tool for feeding in your own chosen parameters. The point is, depending on underlying assumptions, estimates of the costs can vary greatly, and we must dig deeper to understand if the parameters are realistic.
In order to find the best supply on large scale, however, we can not only look at the cost of generation, but also at what kind of costs these energy forms impose, or externalize, onto the society.
Looking at external costs – environmental and health burdens on the society at large, calculated in monetary form – an EU-funded project (even though using a very renewable-positive lens) considers hydro, wind, geothermal, and nuclear the four most environmentally advantageous energy forms.
None of these energy forms are supposed to, or can be the sole solution to our energy supply, but many are needed as pieces of that puzzle. As the IPCC states:
No single technological option has sufficient mitigation potential to meet the economic potential of the electricity generation sector.
Solving the puzzle
Providing a functional, decarbonised, cost-effective grid should matter to anyone concerned about the climate. If we are serious about arriving at this carbon-free grid, hiding the nuclear pieces away will make building that puzzle a very expensive Climate Gamble.
The best conclusion I can draw is that price is a rather competitive factor in nuclear’s favour, in the long term. The size of the upfront investment (which then results in a huge production of low-carbon energy after nuclear plants go online) and the practical lack of routine and expertise (thanks to hiatus in building nuclear due to popular opposition and anti-nuclear campaigns) are the main challenges in that regard.
What speaks particularly in nuclear’s favour, is that it’s humanity’s fastest proven tool for decarbonisation (Cao J et al, Science).
Deployment of nuclear and hydro power are clearly correlated with lowered carbon emissions, while using renewables to arrive at a tangible reduction in over-all fossil fuel use has not delivered wished-for results, as is evident in both the Environmental Progress’ report The Power to Decarbonise, and Europe’s Climate Leadership Report published by Energy for Humanity, based on the data from the live service at electricitymap.
For anyone prioritizing the well-being of humans and nature, the logic of the discussion should be: how can we make decarbonisation of the world faster and cheaper? A good start would be making one of our greatest decarbonisation tools even more competitive. Challenging misinformation, lifting out nuclear in a positive light (come to München 21st of October to celebrate Nuclear Pride!), influencing policy, funding research and development, helping create regulatory frameworks that allow and encourage standardisation, batch licensing of new plants, enabling serial production and harnessing economies of scale… there are so many things we can do to arrive faster at a clean energy future.
For more of my articles on climate and energy, look here. I’ve looked at nuclear costs before, over at The Right Price for Saving the Planet Depends on the Energy Form, Nuclear is the Fastest and Lowest Cost Clean Energy Solution, and Off the Press: Nuclear Energy Is a Fast and Inexpensive Way to Improve the World.
Even better idea, however, is to read the short, evidence-dense book Climate Gamble or browse the graphs in their blog. If you would like to have a discussion in the comments below, please take note of my Commenting policy. Note: if you make long-winded comments with strong claims, especially without clear and well sourced arguments, they may get buried in the back-log of comments waiting for approval, because my time to go through them is limited. Commenting policy in a nutshell:
- Be respectful.
- Back up your claims with evidence.