Many energy experts view nuclear power as potential alternative to conventional fuels. Can it contest fossil fuels in terms of cost?
Since its very inception during 1950s, nuclear power has remained a host of controversies. In addition to safety concerns arising from Three Mile Island and Chernobyl accidents, the costs of commercially produced nuclear electricity has also been a point of debate among energy analysts. While independence from fossil fuels has been the fundamental motive for nuclear power, the cost of nuclear electricity has to be competitive with that produced from conventional energy resources.
Here are a few aspects linked with economic viability of nuclear power plants compared to fossil fuel power plants.
High Nuclear Electricity Costs Due to Plant Safety Concerns
World’s first commercial nuclear power plant opened at Calder Hall (current Sellafield) in Cumbria, England in 1956. A few years later, when nuclear electricity entered global commercial production, the cost to build and operate nuclear power plants was relatively low, thus the electricity produced by nuclear power was cheaper. However, the situation changed radically as a consequence of catastrophic accidents like Three Mile Island and Chernobyl.
During 1980s or so, the United States Nuclear Regulatory Commission imposed additional safety measures in under construction plants leading to higher construction and operating costs than those forecasted at the commencement of the projects. As a consequence, the electricity generated by many nuclear plants in 1980s and early 1990s was relatively expensive due to unforeseen cost overruns.
High Building Costs of Nuclear Power Plants
In comparison to electric power plants powered by fossil fuels, nuclear power plants are complex and therefore more expensive to build. Moreover, the regulatory process by which plant construction permits are obtained is complicated and adds to the cost. Slow permitting process results in plant construction to fall well behind schedule; the obvious consequence is cost overruns, which are ultimately borne by the utility and its consumers.
High Decommissioning Costs of Nuclear Power Plants
When nuclear power plants are no longer useable, they are decommissioned so that they are not hazardous to public health. This happens with nuclear power plants only and does not apply to fossil fuelled power plants; the decommissioning costs are collected from consumers as part of the electricity bills during the operating period of the plant. The decommissioning costs represent almost 10 to 15 percent of the total capital expenditures, according to IAEA.
Nuclear Power in a Deregulated Market
In countries like United States, nuclear power industry has relied on government intervention and support in the form of subsidies for over fifty years. In an interview to Subsidy Watch, Doug Kuplow, founder of Earth Track and an expert on government intervention in the energy sector says,
“All operating nuclear power plants in the U.S. were built with substantial public subsidies. These included large subsidies to research and development, plant construction, uranium enrichment, and waste management.”
In a deregulated market, where competition reigns and consumer have the choice to select cheaper options, nuclear power may not compete the electricity produced by coal or natural gas. While low operating costs of nuclear power plants make them attractive, the technical and safety problems combined with additional fuel and labor costs in aged plants may increase the overall cost of electricity, often resulting in plant closure.
While opponents of nuclear power underscore the associated commercial and safety woes, there are experts that argue otherwise.
France Produces Cheap Nuclear Electricity
In response to the criticism against costly nuclear electricity, proponents of nuclear power usually point towards France, which obtains almost three quarter of its electricity from nuclear power. The electricity generated by French nuclear power plants is 27 percent less expensive compared to that generated from coal. However, the lower cost of nuclear power is mainly attributed to heavy subsidies to nuclear industry as well as government funding in research and development, radioactive waste disposal, and insurance coverage against plant accidents.
Global Status of Nuclear Power
Despite worries over high cost of nuclear power, global community has shown considerable interest in harnessing nuclear energy for electricity generation. Currently there are 444 nuclear power reactors in operation in 30 countries of the world, with nuclear power contributing around 11 percent of global electricity generation. Over 60 nuclear reactors are under construction and around 150 are in the planning phase.
Nuclear Power versus Natural Gas
Majority of energy experts foresee natural gas as the cheapest fuel of the future compared to coal or uranium; the higher costs of gas production are compensated by low construction costs of gas-fuelled power plants. Nonetheless, another group of analysts argue that the limited natural gas reserves and requirement of building additional pipelines may cause natural gas to be more expensive than uranium.
Cheap Nuclear Power
Nuclear power plants are more capital intensive compared to other large-scale power plants. Safety concerns arising form incidents like Chernobyl have increased the plant construction and operation costs to a further extent. On the other hand, countries like France, Japan, China, South Korea. Sweden and Bulgaria fulfill a considerable proportion of their electricity needs through nuclear power. Nuclear power can be available at cheaper rates; however, this requires significant research and development breakthroughs.