As we consider designing a future clean energy policy, nuclear power cannot be ignored because of its near zero carbon emissions even when considering the entire nuclear fuel cycle. It is also the case that public opinion of nuclear power has been increasingly positive, largely for those environmental reasons, though certainly it decreased after the accident at the Daiichi plant in Fukushima, Japan.
Nevertheless, a strong argument can be made that nuclear power should not be considered as a clean resource in our energy portfolio for two significant reasons. First, nuclear power cannot pass a market test. Second, and complementarily, we can achieve greater gains in energy efficiency and in reduced carbon emissions by investing in alternative and renewable resources.
Today, we hear the phrase that the United States is experiencing a “nuclear renaissance.” Evidence of such a renaissance can be found in the fact that approximately 30 nuclear units are in some stage of planning and that the Nuclear Regulatory Commission has granted combined construction and operating licenses permits for two reactors in Georgia and two reactors in South Carolina.
Compared to the situation of nuclear power over the last 30 years, these licenses indicate a significant change in the course of commercial nuclear power. Indeed, until last year, no new plants were built or ordered since 1978, and all plants that had been ordered since 1974 were canceled. Consequently, these new licenses evince a notable change in direction. It must be recognized, however, that this change has been facilitated by the financial supports, including substantial multi-billion dollar loan guarantees, authorized by the Energy Policy Act of 2005 (EPAct 2005).
Still, serious problems remain. Most importantly, nuclear power cannot pass a market test to the point at which the electricity generated from that resource is cost competitive with coal, natural gas, or even alternative resources.
A major study of nuclear power by the Massachusetts Institute of Technology indicated that the levelized cost of electricity from nuclear power, i.e. the cost per kilowatt hour including construction and operation costs, can become cost competitive only under very restrictive circumstances. The MIT study noted that nuclear power can compete with other generation sources if the country considers and adopts a standardized design, builds five prototype plants, imposes a carbon price, and addresses proliferation and nuclear waste issues. Under those tight circumstances, then, nuclear generated electricity can become cost competitive. At this point, however, none of those circumstances exist even though EPAct 2005 adopted many of the recommendations of the MIT report (see also this critique of the MIT study).
Simply, not only is nuclear power not “too cheap to meter,” as promised in the heydays of commercialization, nuclear power it too expensive to build and generate electricity.
Second, given the choice between investing in nuclear power and cleaner energy options, the more effective and efficient solution would be to opt for renewable resources and energy efficiency. The issue, then, becomes not so much the question of whether or not greenhouse gas emissions from nuclear power are negligible, but rather whether or not investment in clean energy can be more effective both in terms of generating electricity as well as reducing emissions. One study, for example, concludes that “For every dollar you spend on nuclear, you could have saved five or six times as much carbon with efficiency or wind farms.”
To be sure, there is, at present, no clear cost advantage to either solar or wind power relative to the current operating prices of nuclear power. Nuclear power, today, is cheaper to operate, because we have already recovered the construction costs of plants now operating. There are, however, several significant open issues regarding nuclear power and the cost of electricity that it will generate. The new plants in Georgia and South Carolina will not be online for a decade or more, should they proceed (Construction is not a done deal, especially given the history of construction slowdowns, overruns, and plant cancellations and conversions in the nuclear industry). The United States has yet to solve the problem of the long-term storage of nuclear waste. Similarly, the relicensing of nuclear plants and the expansion of spent fuel pools have costs associated with them that are yet to be incorporated in the cost of electricity. And decommissioning costs are about the same as construction costs. Simply, the nuclear fuel cycle has attendant costs that will have to be paid.
It is also true, today, that resources such as wind and solar, and even investments in energy efficiency, require upfront payments, and that the return on the investment of those payments is less predictable than might be desirable. Nevertheless, the costs of solar and wind power are declining and energy efficiency measures promise great savings, with the period to recapture investments shrinking noticeably. In short, investments in clean energy retain significant promise.
Energy policy trade-offs are, of course, inevitable, and hard choices will have to be made. Nevertheless, investment in a clean energy transition can be both economically beneficial as well as environmentally advantageous. That transition should be pursued aggressively. Not only must we move away from fossil fuels but we must acknowledge that our experiment with nuclear power has simply proven to be too costly.