Monday, February 18, 2013

Stunning Fact: 3,000 Megawatts Of New Gas-Fired Electricity Generation Could Be Built For The Cost Of Just Repairing Florida Nuke

On Saturday night, I was doing a radio interview and call in show on KDKA in Pittsburgh.  The host is a libertarian conservative who is smart and funny.  Though he is well-informed, he was surprised when I said that nuclear plants require enormous subsidies to be built or, in the case of the Crystal River nuke in Florida, to be repaired.  Many people, and especially conservatives, still think nuclear power is cheap, competitive, economic.

Unfortunately, nuclear power is among the most expensive power sources in the USA, as shown by the experience at the Crystal River plant.  The plant has not run since 2009, and $3 billion is needed to fix it.

Were Crystal River repaired the plant would bring on line 806 megawatts of capacity.  Yet, for the $3 billion repair bill, more than 3,000 megawatts of new gas-fired generation could be built.

Were a new nuclear plant built about the size of Crystal River, the capital cost would be at least $6 billion and likely more. For the capital cost of about 1,000 megawatts of new nuclear plant, 6,000 megawatts of new gas-fired capacity could be built or about 3,000 megawatts of wind, or more than 2,000 megawatts of solar.

And as Crystal River proves, once built, nuclear plants require substantial capital to run and maintain them. These enormous costs of building and running a nuclear plant are why it takes a national government or a government-granted monopoly to build a nuclear plant anywhere in the world.  And it is why the few nuclear plants under construction in the USA are in places where state governments give a generation monopoly to a power company or supplier.  Captive ratepayers must be on the hook for the costs otherwise investors will not make capital available for their construction.

Nuclear power is the opposite of too cheap to meter, as its proponents famously suggested 60 years ago. Instead it is too expensive and risky for free markets, even with tax subsidies, to build!

Ironically, internalizing the now external costs of climate change would be the only thing that could fundamentally change the economics of nuclear plants. Why? Nuclear plants generate substantial amounts of carbon-free power, and Japan's carbon emissions jumped, when it took off line nearly all its nuclear plants following Fukushima..

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