Nuclear zombies

Kevin Drum goes off the rails. (Uncharacteristically; here is his nice tribute to Mark .)

I’d like to point out just how easy a non-carbon form of capitalism would be—and not just to imagine, but to accomplish. Here it is:

Over the next ten years, build about 5,000 standardized 5 TWh nuclear reactors worldwide and retire all fossil-fuel plants. Mandate a 20-year switch to electric vehicles. This would cost around $3 trillion per year, which isn’t much, and would cut carbon emissions by about 80 percent. Done.

Note that I’m not recommending this, nor saying that it would be mere child’s play. I’m just saying it’s far more feasible than reconstructing the entire global economy over the next decade …

Where to begin? This post will be completely unoriginal, but if it brings well-worn facts to the attention of a few new readers, it will be worthwhile. (Shade of MK: don’t be afraid to repeat the truth.)

One: no nuclear power reactor can be built anywhere without a cast-iron government guarantee replacing third-party liability insurance and government assumption of responsibility for waste, in practice a non-market price too (Hinkley C). A mass reactor buildout is the most socialist project you can imagine.

Two: As of mid-2018, 50 power reactors were under construction worldwide. The industry struggles and fails to build them on time, let alone to budget. The 50 have on average been under construction for 6.5 years. “The average construction time of the latest 53 units in nine countries that started up since 2008 was 10.1 years with a very large range from 4.1 to 43.5 years.” (World Nuclear Industry Status report, 2018, pdf). This is the best today’s battle-hardened reactor builders, the survivors in a steadily declining industry, can do. Building 5,000 at a time would have to be done by completely inexperienced workers, engineers and project managers. What could possibly go wrong?

Three: Drum thinks that worries about safety and costs can be addressed by using new designs: Generation IV, thorium, small modular reactors. No full-size commercial prototype exists for any of them, or even a fully licensed design. The normal procedure would be to build a handful of prototypes (at best 5 years construction, plus a crash two years for design and approval). Then you mass-produce the most successful prototype, betting there is one (another 6 years, allowing just one for design). So you don’t make any impact on emissions for at best 13 years, beyond the deadline for action set by the IPCC. Historical experience suggests 20 years. Plan B is to forget about prototyping and go straight to building 5,000 full-sized power reactors using completely untested designs and builders with no experience. This is not sane. (H/t to John Quiggin for emphasizing the timing issues.)

Four: Lazards’ 12th survey of US generating costs gives the comparative unsubsidised LCOEs per Mwh as:

  • Utility PV solar $40 – $46 (midpoint $43)
  • Onshore wind $29 – $56 (midpoint $42.5)
  • Nuclear $57 – $148 (midpoint $102.5) $112 to $189 (midpoint $151)

The wind and solar numbers are hard data from hundreds of developers. The nuclear ones are optimistic guesses, as no new reactor site has been started in the USA for just short of a decade. This shows what real capitalists think of the technology. I wonder what snake-oil salesman Lazards got the $57 low number from: it’s entirely out of line with recent experience in the USA and Europe with reactor construction. [Update: Sorry about that] The unsubsidised tag is incidentally a joke – there is no market price for the state guarantees for nuclear. So even in the best-case scenario, new nuclear in the USA will cost twice three times what you can get wind and solar for. There is no reason to think the global pattern will be significantly different. [Update: Jacobson gives the cost ratio as 2.3 to 7.4 , consistent with my rough estimate]

BUT, say nuclear advocates, nuclear reactors offer reliable! baseload! supply (90% availability) while wind and solar are intermittent (hiss hiss) and have to be firmed with gas or storage. This is a half-truth. The true part is that wind and solar do need firming with despatchable storage and transmission; I’ll go with Andrew Blakers’ calculated markup of 50% for Australia (pdf). But nuclear plants are lumpy and also need backup in case they have unplanned outages, an infrequent but regular event. (Simultaneous mechanical failure of equivalent volumes of wind turbines or solar panels is is no more likely than a giant asteroid strike.) Most of the world’s pumped hydro storage was built as backup for nuclear plants. Let’s say we need a 25% safety margin, either in the form of excess nuclear plants or the same mixture as for renewables. That pushes up your costs.

In addition, the claimed “baseload” feature is a bug to grid managers. Electricity demand cycles over the day and the year. Let’s just look at the daily cycle. A random day in January in California:

Source: Vox

The minimum load, about 21 GW, is in the small hours. The peak, at 6 pm, comes in at about 32 GW, 50% more. So California would, in Drum’s scenario, need 23 GW of nuclear (at 90% availability) to cover the baseload. But going all-nuclear, it needs another 12 GW to cover the peak – running around half the time. That hits the LCOE, which is based on running round the clock. The average capacity factor drops to 26.5/35 or 76%. It’s lower again if you superimpose the annual cycle. By itself, the lower CF pushes up the LCOE by at least 15%. At first sight that’s not too bad, but power reactors are designed to run all the time. Ramping them up and down imposes stresses and shortens life, though the French are forced to do it with their huge nuclear fleet.

Taking these factors together, the various operational constraints just about balance the availability advantage of nuclear and maintain the proposition that 100% nuclear would cost at least twice three times the 100% renewables solution.

Drum costs his thought experiment at $3 trn a year. Using the same back-of-a-napkin methods, say $1 trn for EVs, leaving $2 trn for electricity, of which $0.5 trn for renewables, so $1.5 trn for nuclear reactors or $15 trn over ten years. I have shown that half two-thirds of this, $7.5 $10 trn, is an opportunity cost over wind/solar/storage. In what universe does it make sense to waste trillions of dollars on an unreliable and complex technology with problems we know all too much about?

I could go on: the waste headache, proliferation risks (Iran), the negative learning curve (in contrast to the well-behaved ones for wind, solar, and batteries, and known flat costs for pumped hydro and transmission), and fading public acceptance after Chernobyl and Fukushima. But the issues I’ve covered are enough to make it crystal clear that nuclear power is an obsolete, expensive and multiply risky technology we no longer need. Time to draw a line, break the bad news tactfully, and present the gold watch for long and moderately faithful service.

What annoys me most about Drum’s little jeu d’esprit is the subtext that since a massive rollout of nuclear power is evidently impossible, so is the whole GND or fast transition. This is false. As I’ve noted here before, cost estimates of the energy component of the GND from supporters (Jacobson) and foes (Holtz-Eakin), come in quite similar, under $1 trn a year, before netting out the current investment in oil and gas. This is large but practicable in the $20 trn a year US economy.

Zooming in, FERC thinks there are 188 GW of renewable generating plants being planned in the USA for installation in the next three years, say 63 GW continuous equivalent at an average 33% CF. The remaining coal capacity a year ago was 268 GW or 144 GW continuous equivalent. If all the planned renewables are built, they will make 44% of the coal fleet redundant in three years. Not all of them will see the light of day, but most will because they are cheaper and, with storage and gas backup, do the job just fine. A complete phaseout of American thermal coal in the next decade is not only feasible: it’s what current trends predict.

(Shade of Mark Kleiman again: Is it about something that matters? Check. Have you proofread for typos? Check. Source links and quotations verified? Check. [Update: not carefully enough, I’m afraid.] As short as needed to make the point? Guilty, but you know me.)

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

24 thoughts on “Nuclear zombies”

  1. If nuclear is so infeasible, why do you even have to argue against it? Simply insist that nuclear be developed on a level economic and environmental playing field with other carbon-free generation methods, and let it fail on its own.

  2. On the ground, this is exactly what is happening. China has just broken ground on three new reactor sites – breaking a two-and-a-half year hiatus since December 2016, scarcely a ringing endorsement. I’m not in the least worried that Wall Street will suddenly decide that nuclear is the smartest play since e-commerce. It’s that the infeasible nuclear dream persists even among progressive bloggers like Kevin Drum, and creates a politically costly distraction from the doable measures that move the transition forward, like fixing coal miners’ pensions. Comment threads at say GTM are still infested by nuclear diehards, though they have gone silent at Cleantechnica.

    Siemens, as technically capable a company as you’d find anywhere, read the tea-leaves right and quit the reactor business in 2011. They are now head-to-head with Vestas in the demanding offshore wind turbine market, and have launched a certified electric aircraft engine. These are developments that make a difference. It’s possible they would have happened if the company had stayed with nuclear, but the odds are that clearing the decks allowed Siemens management to focus on the new stuff.

  3. There was intense opposition to nuclear power from many activists before anyone was focused on climate change, so now there is a credibility problem for critics, i.e., “Group that always hated nuclear power on principle still hates nuclear power for new reason” isn’t persuasive to most voters.

    1. Nobody hates nuclear power on climate change grounds. The reasons against it have not changed, they have just become more convincing, from both negative experience with the technology and also the emergence in the last decade of much cheaper and much less problematic low-carbon alternatives. The credibility problem now lies with nuclear advocates: who include professors of nuclear engineering now seeing their life’s work consigned to the oubliette by unwashed bloggers, and professors of other disciplines like Stanford’s Mark Jacobson (pdf). Jacobson’s expert estimate of the cost differential over wind and solar is much higher than the back of my envelope: 2.3 to 7.4 times.

      BTW, cheap wind and solar did not arise from the magic of the free market but very largely from a great act of public policy, the German EEG (Erneuerbare-Energien-Gesetz) of 2000. This created generous (but declining) subsidies along with a feed-in right. The policy stimulated a massive expansion of both technologies, driving innovation and economies of scale. The bill was steered into law by Hermann Scheer and Hans-Josef Fell, on the back of the German anti-nuclear movement and ultimately Chernobyl. Climate change was an afterthought, though now it’s driving the debate.

      1. “Nobody hates nuclear power on climate change grounds.”

        Precisely. They hated it all along and this is just a restatement of their opposition in a new form.

        1. But now their cost argument is proven correct! The dirty water theory of cholera was only proven when John Snow – not the same hero – got the offending public tap closed (London 1854).

          FWIW, I was agnostic on nuclear till I saw Anton Grübler’s negative learning curve chart.

          1. I’m not trying to read your mind as an individual. I believe you in saying you were agnostic and have now moved against. But you are not the face of anti-nuclear power sentiment, and the visible people who are now against it “because it won’t stop climate change” have always been and always will be against it. Which is their right of course. Someone suggested to me today what I think is probably true: the long-term opposition stems from associating (not entirely without reason) nuclear power with nuclear weapons and war, which naturally creates a negative visceral reaction.

            The cost argument was made against solar power for decades, but enough government subsidy turned it around, as you have documented. So that doesn’t seem like a strong argument against nuclear power, especially given the existential threat of climate change.

            In any event, I am not making a normative claim. Rather I am stating why, politically, critics of nuclear power “on the basis of climate change” are usually not persuasive.

          2. I reckon Grübler’s curve (which does not even include the latest overruns at Sumner, Vogtle, Flamanville, etc) is pretty conclusive evidence against the proposition that throwing billions more taxpayer and ratepayer money at the nuclear industry will somehow reverse its longstanding cost trajectory or its persistent dishonesty. It is magical thinking to believe the claim that next time – whether with thorium, Generation IV or SMRs – will be different. It won’t, and they should not be given the chance to rip us off once again.

            I still ask you: who exactly is arguing against nuclear power on the basis of climate change? Except in the obvious senses that money wasted on nuclear comes at the expense of cheaper and quicker renewable solutions, and that it’s a distraction of effort away from realistic measures, a distraction to which I fear I have contributed here.

  4. Solar power was said to be a waste when I was a kid 40 years ago. Technology improved, it became a viable entity. All along the way people asked why throw good money after bad? When species extinction is on the table, we should be throwing money even at long shots.

    1. It is with great trepidation that I offer any comment in a debate between Keith and James. However, here at least, I think that Keith clearly makes a logical mistake.

      I agree with him that species extinction is on the table. However, it does not follow that we should be throwing money even at long shots. The reason is really quite simple and, I think, supports James Wimberly’s argument. It is simply this: Time is short. We have limited resources at our command. (Note the use of the phrase “at our command.” I think that we actually have more resources reasonably available to address the problem, but the resources that we can politically muster will fall short of the resources that we could muster.) Because of the time constraints, we have to focus our efforts on those strategies that offer larger payoffs in the short-run. Diverting gunds to support long-shots will actually diminish our practical ability to remediate the problem.

  5. Would you recommend a crash programme of research in psychoanalysis and acupuncture to find a cure for syphilis? Of course not, penicillin works just fine. Backing long shots with lots of money is something you do when you don’t have a workable Plan A. For the energy transition, we (mostly) do. “Wind+water+solar+transmission+storage” is a sure thing technically, at known and surprisingly low costs and negligible technical risk. There is a lively trade argument about the best form of storage, but that does not affect the main proposition. Throwing a few billion at long shots like fusion and EGS is a reasonable insurance policy, but not trillions.

    Some would say that nuclear, like psychoanalysis, has already enjoyed more than its share of funding and effort, with very limited results, and it’s time to pull the plug.

    If you had looked at the data on the early solar PV industry, instead of relying on hearsay (I don’t blame your younger self, it was a tiny and generally unknown business), you would have seen the same 20% learning rate we still enjoy, even though world output may have been measured in kilowatts a year not tens of gigawatts.

    I suggest you take advantage of the faculty lounge to buttonhole Jacobson. Big ego on a mission, but that often goes with achievement.

  6. Those are really poor analogies. But in any event, you misread me, so I state again that I am not making a normative claim about nuclear power. I am analyzing why its critics on the grounds of poor climate change protection are not likely to persuade anyone.

    1. To check your inconsistency claim, I checked on the website of the world’s most successful anti-nuclear political movement, the German Green Party.
      1998 programme (via Wayback Machine for May 1999) :

      BÜNDNIS 90/DIE GRÜNEN wollen den sofortigen Ausstieg aus der Atomenergie. Der anhaltende gesellschaftliche Widerstand gegen die Atomenergie drückt es aus: Die gesellschaftliche Mehrheit in Deutschland will statt des permanenten Risikos eines Super-GAUs, der Hinterlassung jahrtausendelang strahlender, hochgiftiger Abfälle für zukünftige Generationen sowie der drohenden Vermischung ziviler und militärischer Nutzung der Atomtechnologie eine grundsätzliche Neuorientierung in der Energiepolitik.

      So: radiation disaster risk, waste problem, proliferation.

      German Green Party, current website:

      Die Atomkraft hat sich in den vergangenen 60 Jahren als ein hochriskanter und extrem teurer Irrweg erwiesen. Für uns steht fest: Kohle und Atom haben ausgedient.

      So: risks (unspecified, covers all three types), costs. It’s brief because there is no longer a debate in Germany over the phaseout.

      The only change is the addition of costs – but then the opportunity costs have changed dramatically. Climate change is not mentioned specifically either time in the nuclear context.

      I don’t see the inconsistency and opportunism that Keith does. In fact, the position is remarkably stable, for a single party over 20 years. Pig-headed, indeed obsessive obstinacy perhaps – but that’s the way they won.

      Counter- evidence needed.

  7. Unclear if Lazard’s economic analysis is proper – I read the report. Reliance on data from heavily subsidized renewable producers is highly suspect. Unbiased analysis (no subsidies, cost of debt, profit, net generation) shows the Lazard renewable data is off by a factor of more than two. I strongly suspect Lazard has their “thumb-on-the-scale” to favor renewable energy.
    If renewable energy were simply used to cover peaks, that might be somewhat reasonable . However, that is not what actually happens. Renewable energy is forced into into the grid by mandates when the energy is unneeded, displacing reliable resources. That, in turn, drives up the cost of power from the reliable resources because their capacity factors are slashed. Please note, the renewable subsidies are a huge incentive to dump power and that grossly distorts the marketplace.
    Properly, renewable energy should be subject to the marketplace. That means renewable generators should pay money to dump unreliable and unneeded energy into the grid. To avoid that scenario, the the generators would stop or curtail production and that slashes their capacity factors which in turn drives up their production cost and generally would make them insolvent. In passing, wind generally shows up more frequently at night when electricity loads are low.
    As for nuclear capacity factors, refueling the machines at seasonal grid lows (spring, fall) is what actually occurs and that has no impact on the grid. No offsetting power is necessary.
    Please note, I do not favor building very expensive nuclear plants if other more economically viable resources are available. However, mandating the use of unreliable renewable energy is clearly not an economically viable approach.

    1. Citations wanted. Lazards are now on to their 12th annual survey, and presumably have a fat Rolodex. You think Warren Buffett and Philip Anschutz won’t take their calls or deliberately mislead them? Their data and especially trends are consistent with those published independently by BNEF and IRENA, not to mention reliable press anecdata from major contracts, the latest being a sub-2c/kwh solar PPA by the city of Los Angeles.

      The displacement of “reliable” but expensive fossil power by renewables that you complain about is the market working as it should. Wind and solar have negligible marginal costs, and rightly go top of the merit order that controls despatch. Inflexible incumbents suffer through lower CFs? Creative destruction at work. If power is being dumped at a negative price that can only be down to badly designed tax incentives, a temporary problem as they are sadly being phased out. (I write “sadly” because the tax breaks serve as a kludgy proxy for the needed carbon tax.) In a well-behaved system (say one with FITs or CfDs or a carbon tax), when the price hits zero the owners just switch the wind and solar plants off. Unlike nuclear, they aren’t must-run.

      “No offsetting power is necessary [for nuclear]”. Why then did Japan build 28 GW of pumped hydro storage along with its nuclear fleet? I bet they are grateful for it now.

  8. Determining the cost of energy is reasonably straightforward when armed with key items such as: capital cost and time to build the plant; owners equity percentage and desired return on invested equity; borrowed capital, loan duration and interests rate; fuel cost & machine efficiency; capacity factor. My firm does it all the time.
    You simply cannot trust numbers provided by generators as they obviously have a reason to low-ball the numbers to make themselves look more competitive than they actually are. That is why Lazards numbers are not particularly useful.
    You completely miss a key element of a power market. Firm priced power is more valuable than intermittent energy. That is not to say intermittent power has no value, but it can actually be negative. That is precisely what occurs to California when they have to pay Arizona to take renewable energy. Logically, you would simply not generate excess renewable energy under such conditions, but then the renewable suppliers would not get their subsidy ( it’s based on generated energy). Markets like that in California are hopelessly screwed up because corrupt politicians are running California. Not a snow-balls-chance-in-hell that common sense reforms will will ever show up.
    Therein lies the problem with mandating renewable energy that is so heavily subsidized. The consumer and taxpayer are forced to line the pockets of the power companies and elitist investment firms.
    As for Japan, they imported liquefied natural gas to replace their shutdown nuclear plants, which is a different issue than refueling reactors. However, what that does speak to is diversification of your generating fleet.
    A carbon tax is nothing more than government and elites lining their own pockets. Further the whole idea of reducing carbon has zero economic benefit to those alive today. Indeed, we simply have less money. All this to solve an theorized distant issue that is at best conjecture and more likely nothing but a religious belief.
    Try reliance on technology and the forces of a free market. Innovation occurs, machines and energy use get more efficient because businesses want to make a better profit. Drop kick big government and their leftist supporters over the side.

    1. With a happy and cost effective byproduct of less CO2 in the atmosphere. That is precisely what has occurred in the U.S. as ever more efficient gas turbines show up and replace more costly coal plants and nuclear plants.

    2. [Sentence withdrawn to keep the peace]
      “They obviously have a reason to low-ball the numbers to make themselves look more competitive than they actually are.”
      This is not an answer to my question why the likes of Warren Buffett and Philip Anschutz should lie to a major investment banker (one they no doubt deal with on other matters) over their generating costs. They aren’t accountable to them, don’t gain by misleading them, and the raw data is not published to third parties like shareholders, by Lazards at any rate though much of the information can be found in press reports and regulatory filings. On the other hand, both men have an interest in learning what price their competitors are paying, so an accurate survey is in their interests. Nor do I see what interest Lazards themselves have in falsifying the data. They make money by lending to developers who will pay them back, so they too have an interest in accuracy.

  9. By way of an update, we ran our financial model for wind to evaluate LCOE’s similar to those reported by Lazard. Wind capital cost would need to be less than $400/kW. Solar would have to have similar capital cost. Not possible.
    We use an Independent Power Producer model: 10 % return on 35% invested equity; 8% note for 15 years. No subsidies, no mandates, no clever investment sleigh-of-hands.
    Same model predicts LCOE for new nuclear @ about $155 megawatt-hour sell price for energy to make profit. Natural gas @ about $50 per megawatt-hour. Wind and solar around $130 per megawatt-hour.

    Quite clearly, Lazard’s numbers are peculiar.

    1. “Lazard’s numbers are peculiar.” They are peculiarly high, partly from the inevitable time lag between data collection and publication. The main other bias is their continued use of a WACC of 9.6% (60% debt at 8% interest rate and 40% equity at 12%). This may have been reasonable when they started, but wind and solar are now seen as safe investments. Berkshire Hathaway’s 30-year bonds carry a coupon of 4.5%. I’m sorry that you are being asked to pay an impossible 8%. Your 15-year horizon is also out of line with the big boys. The gear easily lasts 25 years, and that is the the typical financial horizon for PPAs.

      Lazards now include a chart allowing you to see the effect of more realistic bond rates. As they say,”availability and cost of capital have a particularly significant impact on Alternative Energy generation technologies, whose costs reflect essentially the return on, and of, the capital investment required to build them.” This factor helps explain the very low contracts being signed like the <2c/kwh Los Angeles one (delivery in 2023, but still). These developers must be paying a WACC closer to 6% than 10%. The ITC only cuts the solar LCOE by 0.3 cents according to Lazards.

  10. The hapless taxpayer and consumers are forced to subsidized renewable energy and the investment folks and power companies have a no-risk guaranteed return.
    The Lazard data is crap. You need to look at the terms of the Power Purchase Agreements, which none of the parties will provide to the public.
    Take away the subsidies and forced mandates and renewable energy becomes too risky.

    1. By the way, as part of the wild-fire induced bankruptcy of California’s largest power company, they are trying to void (perfectly legal in a bankruptcy) their contracts with renewable energy suppliers because the agreements were such a poor deal for the power company. The politically driven “green-energy” mandates forced them into such deals.
      There is no doubt that the rich elites have caused the poor and middle class of California to pay some if the highest power rates in the country, all this for a religious belief.

      1. Kind of feels like you’re making these repeated appeals to class resentment to distract the reader from the shortcomings at the heart of your case.

Comments are closed.