Nuclear power price fudge


Today’s publication of the UK Government Committee on Climate Change’s “The Renewable Energy Review” report seems to me to contain some fudge on the cost of nuclear power.

Almost everybody agrees that the current cost of generating nuclear power from existing reactors and plant is reasonable. There are questions about how much, exactly, it’s going to cost to decommission ageing reactors as they become dangerous, and there are also questions about how much it’s really, really going to cost to safely “dispose” of the radioactive waste from over 50 years of nuclear electrical generation. Even so, the operations and maintenance costs, the “O&M” costs of keeping nuclear power stations ticking over is fairly reasonable – unless there are unplanned “outages”, or radioactive accidents, or problems with the price of uranium fuel…happily, these added burdens can be kept off the balance sheets for the most part.

However, it is in projecting the real costs of new nuclear power, from shiny, spanking, new glistening, glowing concrete reactors, that deep and discomforting questions arise, and the CCC report, I think, I’m sorry to say, fudges the issue.

Figure 1 in their report (linked at the start of this post), shows that capital costs of investment are included in the Mott Macdonald accounting, although offers a little hedge. This, sadly, is not the only fudge.

The Executive Summary offers some clues :-

“Power generation…Current uncertainties. The appropriate mix of low-carbon generation technologies for the 2020s and 2030s is uncertain. Key factors are: the ability to build nuclear to time and cost…Nuclear power currently appears to be the most cost-effective of the low carbon technologies, and should form part of the mix assuming safety concerns can be addressed. However, full reliance on nuclear would be inappropriate, given uncertainties over costs, site availability, long term fuel supply and waste disposal, and public acceptability…”

So, any figure quoted should be taken with a huge fist of salt, then.

And then there’s the issue of exactly how much new nuclear power can be built within the timeframe of 2030 :-

“Renewable energy ambition…2030 ambition. The precise level of appropriate ambition will become clear over time. We recommend that the Government keeps ambition for renewable energy under review and revisits this as uncertainties over the economics of different low carbon technologies are reduced (e.g. in 2017/18 when the first new nuclear plant and CCS demonstration plant are due).”

So, I presume we are to conclude that the capital cost of investment in nuclear is probably not going to have an impact on nuclear power prices in the near-term, as nothing can be built quickly. Plus, not all the nuclear power plants that are planned will have investment money put into the projects by 2030. This means that the nuclear power costs quoted are almost certainly fudged – as the total of the capital costs of investment won’t be felt by then.

This is somewhat confirmed by the report, “An illustrative scenario for technology support…Nuclear…In this illustrative scenario, there is investment on all eight currently approved sites, with around 18 GW new nuclear added to the system through the 2020s, resulting in around a 40% share (175 TWh) in 2030.”

When the report says : “Nuclear appears likely to be the lowest-cost low-carbon technology with significant potential for increased deployment; it is likely to be cost competitive with gas CCGT at a £30/tCO2 carbon price in 2020.”, it is only talking about nuclear power plants that already exist, with their low O&M operations and maintenance costs. It’s not talking about the costs of new nuclear power.

I have been able to find one of the Mott Macdonald reports used as the basis for costing nuclear power in the CCC report “UK Electricity Generation Costs Update” from 2010 :-

But I can’t yet source the other – “Costs of low-carbon generation technologies” published 2011. I have phoned the CCC to try to get a copy, but no joy yet…

Meanwhile, here are a few of the many, many newspaper articles that seem to get the story partially right, or outright wrong :-
“09 May 2011 : Energy review declares nuclear as cheapest low-carbon option”
“9 May 2011 : Nuclear ‘cheapest low-carbon option’ for UK energy : By Richard Black : Environment correspondent, BBC News”
“Renewable energy is key to UK’s low-carbon future: report
by ClickGreen staff. Published Mon 09 May 2011”
“09/05/2011 : Nuclear “most cost-effective” low-carbon tech UK advised to invest as Japan reaffirms commitment : Richard Jansen”
“Climate Change ‘wise men’ recommend more nukes, power cuts : Some things don’t just add up : By Andrew Orlowski : Posted in Environment, 9th May 2011”
“Offshore wind farm plans ‘are a costly mistake’: Climate experts demand rethink on turbines and more nuclear power : By DAVID DERBYSHIRE : 9th May 2011 : Climate experts demand rethink on turbines and more nuclear power”
“Nuclear power ‘cheaper option than offshore wind farms’ : Nuclear power should be favoured over plans to build thousands of offshore wind turbines, the Government’s climate advisers have indicated. : 09 May 2011”
“‘Go slow on offshore wind power and back nuclear’ ministers told : Published Date: 09 May 2011 : By Emily Beament”
“Monday, 9 May 2011 : Offshore wind power ‘must be capped'”
“Are wind turbines to blame for projected rises in electricity bills? : 9 May, 2011 : Jonathan Balls”

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