Archive for the ‘Nuclear Economics’ Category

The following is a repost of my National Journal Energy Experts blog

Electricity policy faces enormous challenges—three different federal agencies (EPA, DOE, FERC) and 10 Congressional committees wrestle with oversight over electricity markets, new generation sources, air and water emissions issues, and energy efficiency initiatives. Resolving the current political stalemate requires an acknowledgement that maximizing investment in a decentralized electricity structure has to be a significant part of policy going forward. And we must recognize that while constitutional rights within our Democratic Republic often clash with companies’ need for efficiency, preserving those rights must be our priority.

Not only are capital cost barriers of proposed new nuclear and coal-fired units significant, but so are the associated transmission infrastructure upgrades needed to move the power from new sources to population centers. Trying to build any new type of large infrastructure system designed to accommodate our centralized power system has traditionally run into NIMBY opposition, which lately has been characterized as Not on Planet Earth (NOPE). Population density in the US has increased 105% from 1950 to 2010—from 42.6 people per square mile in 1950 to 87.4 people per square mile in 2010. With more people living per square mile than ever before, Americans’ Fifth Amendment Constitutional right to due process guarantees that large projects will continue to be delayed. Congress’ unwillingness to grant the Federal Energy Regulatory Commission ultimate authority over transmission siting leaves permitting at the state level, where property owners will continue to hold sway over project developers. Meanwhile, the plummeting cost of solar photovoltaics, advances in micro-wind turbines, and continued permitting successes of geothermal are providing more opportunities for distributed renewable energy generation. It’s more efficient to site millions of rooftop solar systems than permit just a handful of new coal/nuclear stations with hundreds of miles of needed transmission.

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On June 7th, the same day that Germany’s Chancellor Angela Merkel was in D.C. meeting with President Obama on various matters, the Energy and Natural Resources Senate Committee was holding a hearing regarding three bills, two of which propose new steps in the United States’ nuclear energy future. "Germany Nuclear Power"

In a striking parallel to the failed Nuclear Power 2010 Program, initiated in February of 2002 under the Bush Administration, the Nuclear Power 2021 Act, proposed by Senators Udall, Bingaman, and Murkowski, aims to revitalize a technology that has once again been proven to be outrageously dangerous, this time in Japan.  Unlike our German counterparts’ rational decision to completely abandon nuclear energy by 2022 in response to the still developing catastrophe in Japan, the Senate has proposed the Nuclear Power 2021 Act (S.512) and the Nuclear Energy Research Initiative Improvement Act of 2011 (S.1067), which would give new energy and funding to the United States’ so-called “nuclear renaissance.”

Smaller Doesn’t Mean Safer

These bills fail to address the age-old economic and safety concerns regarding nuclear power; they simply propose a new form of the same problem, namely Small Modular Reactor (SMR).  SMR’s, according to S.1067, are reactors with rated capacity less than 300 electrical megawatts which can be constructed and operated in combination with similar reactors at a single site.  Proponents of SMR’s argue, although many of the designs are still being worked on and none have yet been approved by the Nuclear Regulatory Commission (NRC), that SMR’s could potentially be safer than traditional reactors because they will require less cooling due to their reduced power level, they will be able to be sited underground, and they will likely be equipped with many passive cooling and safety features.  In the Senate hearing on June 7th, 2011 regarding these matters, it was widely discussed that the United States could be a world leader in SMR technology and manufacturing and even export SMR’s in the future.

Another Nuclear Industry Boondoggle

There are many troubling issues with these bills and the corresponding Senate hearing.  First, in the wake of the worst nuclear disaster in history, these bills aim to dedicate money and resources to an industry that we should be moving away from.  More specifically, S.1067 appropriates $50 million for each of fiscal years 2012 through 2016 for research regarding SMR’s as well as for other measures to reduce the cost of nuclear energy.  Why spend money to make nuclear energy, a proven failure and a public health ticking time bomb, cheaper when we could spend money

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Leading GOP Presidential hopefuls like Sarah Palin and Jon Hunstman are trying to best Democratic calls to repeal Big Oil’s subsidies by claiming we need to get rid of all energy subsidies. Now, I agree that we can add ethanol’s boondoggle to Big Oil’s, but we have to remember that

There are massive embedded disadvantages against emerging technologies that have to compete against those fuels that have huge infrastructures already in place. The question shouldn’t be, ‘Let’s get rid of all energy subsidies.’ The question should be, ‘Let’s get rid of subsidies for mature technologies that have proved that they are profitable. ‘

The public investment in continuing to give a small boost to renewables will reap huge returns down the road, as renewable energy features plummeting costs, in contrast to escalating costs for nuclear and coal. And from 2002-08 fossil fuels received nearly a 6-to-1 advantage of federal subsidies compared to renewable energy. Granted the 2009 stimulus bill bumps renewables up, but they’re still way behind what fossil fuels receive.

-Tyson Slocum Directs Public Citizen’s Energy Program. Follow him on Twitter @tysonslocum

"Allison Fisher" "Public Citizen Director of Energy Advocacy"It’s been 25 years since the world’s worst nuclear disaster unfolded at the Chernobyl Nuclear Power Plant, and today, the area surrounding the plant is still uninhabitable. While the catastrophe, which spread radioactive fallout over tens of thousands of square miles, serves as an eerie reminder of the tremendous risk associated with nuclear power, the accident contributed little to the decline of nuclear power in the United States – which had already hit a financial brick wall.

By 1986, the U.S. nuclear power industry – plagued by construction delays and cost overruns – already had faltered. Commissioning of new reactors in the United States had ceased even before the partial meltdown at Three Mile Island in 1979. In fact, a year before the Chernobyl accident, Forbes magazine had declared the U.S. nuclear power program the largest managerial disaster in business history.

Twenty-five years later, the world again watches in horror as one of the most technologically advanced countries struggles to gain control of several crippled nuclear reactors. Like Chernobyl, the incident in Japan will have long-term implications and could sour the public on the development of new nuclear reactors.  But as was the case 25 years ago, the economics of nuclear power already may have sealed the fate of the role nuclear power will play in the U.S. energy sector.

Since the Japanese nuclear tragedy began, nuclear development plans have been dropped in both Maryland and Texas. While the renewed awareness of the inherent dangers of nuclear power may have contributed to scrapping new reactors at Calvert Cliffs and South Texas, the financial uncertainty of these new projects has beleaguered them since day one.

When will decision-makers learn? We must stop investing valuable taxpayer money into this dangerous, costly energy source. Instead, we should invest in an energy-efficient future. That way, 25 years from now, the next generation of energy consumers won’t be able to say “I told you so.”

The Obama administration and Congress must recognize the folly of nuclear energy and stop providing subsidies to an industry that cannot stay afloat without massive infusions of taxpayer money. That money can, and should, be reinvested in our future.

Allison Fisher is the Outreach Director for Public Citizen’s Energy Program

See if this sounds familiar.

An energy company’s machinery fails and the environment is polluted with toxins. The energy company puts up a minimum amount of cash to pay for as much cleanup as required by law – but that amount is woefully inadequate. American taxpayers are the ones ultimately on the hook for the remaining money to clean up the corporation’s mess.

Does that ring a bell? That’s what happened with last year’s BP disaster. It is also what will happen if we have a nuclear catastrophe here – although the cost to taxpayers would likely be far greater.

When BP’s Deepwater Horizon oil rig exploded and millions of barrels of oil gushed into the Gulf of Mexico, the $75 million liability required of BP by the federal government did not come close to covering the cost of cleanup and victim compensation. BP, with prodding from the federal government, established a $20 billion escrow fund, which many believe to be inadequate. But that move was voluntary and cannot be expected to happen again.

Similarly, the nuclear industry has a liability cap of $12.6 billion, thanks to the Price-Anderson Act. An individual corporation must pay only $375 million of that, with the balance shared by the industry. The nuclear industry likely will not voluntarily contribute additional money, as was the case with the BP escrow fund. After all, major oil companies like BP are far larger than even the biggest U.S. nuclear utility; in 2010, BP had revenues of $309 billion compared to $18.6 billion for Exelon, America’s largest operator of commercial nuclear reactors.

The trouble is, given the complexity, potential geographical area affected and the nature of a nuclear accident, the cost of cleanup easily would exceed $12.6 billion. What happens when the liability limit doesn’t cover the cost of cleaning up the disaster? American taxpayers must foot the bill.

Notice the trend: Corporations do not clean up their messes – American taxpayers do.

It’s time to get the American people out of the business of bailing out corporations.

Public Citizen calls on Congress to protect taxpayers and make corporations accountable for their actions by repealing the Price-Anderson Act and holding nuclear power operators – not taxpayers – financially accountable. It is its responsibility. Please click here to take action against nuclear subsidization in the U.S.

Tyson Slocum Directs Public Citizen’s Energy Program

View Tyson Slocum on last night’s PBS Nightly Business Report. Also, check out our new Facebook page, Nuclear Power: Not Worth It.

 

 

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