Dispelling the notion that nuclear is cheaper somewhere else

CleanTechnica

francenuclear-570x481The British attitude to the notion that nuclear power is not cheap after all is a bit like a child who first hears that Father Christmas does not, after all, exist. Disbelief, and in this case a belief that if only Father Christmas is nationalised, then it will still be true. The psychologists call this cognitive dissonance, in other words if a fact is uncomfortable to you, you believe that the fact is wrong.

The belief that somehow nuclear power will be cheaper if somehow it is done differently here has been stoked by a recent IEA Report which says that British nuclear power, in the shape of the proposed contract for Hinkley C, is the most expensive in the world. In fact the IEA report is heavily reliant on a limited number of projections of costs, which in the world of nuclear power is a fantasy world in itself. However what is more apparent is that it is not so much that nuclear power is more expensive in the UK so much that it is only in the UK that something vaguely approaching a estimate of nuclear costs on the same basis as other energy technologies has been attempted. This is because of the need to make nuclear at least look like it was fitting into the contours of what passes for a competitive electricity generation market in the UK.

Of course nuclear power looks expensive if you do it that way. because it is! (assuming you want to treat nuclear power on the same costing basis as other energy sources). Even this (Hinkley C) comparison is somewhat biased towards nuclear because other technologies don’t get 35 year contracts, and they don’t get a Government offer to underwrite 60 per cent of the projected construction costs. So, the Government’s declared price for Hinkley C is, in reality an underestimate of nuclear power costs compared to other energy sources. This is even more the case since the plant hasn’t even started construction yet.

I’m scratching my head as to how the IEA could have come to the conclusion it did. The French EPR is now several years behind schedule in its construction and is said to now cost three times more than its original estimate (already!). As for the Finnish EPR, well, that cost just goes off the scale.

Even if you look at other reactors being built in the West, the high costs are also much in evidence. The AP1000 reactors being buult in the USA are as expensive as the EPR. See my earlier analysis at:
http://realfeed-intariffs.blogspot.co.uk/2014/01/is-toshibas-nuclear-project-really.html

And the claims circulating about how the proposed Hitachi project will go better than Hinkley C are more exercises in fantasy. I commented about this earlier as well. See:
http://realfeed-intariffs.blogspot.co.uk/2012/10/hitachi-bid-more-fantasy-nuclear-power.html

There’s a lot of stories about how much cheaper nuclear power is in China. Well, I don’t know whether anybody has noticed this, but easily analysable information on costs of nuclear construction in China is about as scarce as it was from the old British CEGB on a bad day (and it was, apart from the occasional leak, usually a very bad day).

But recent commentary of the Chinese nuclear programme is not especially encouraging: Take for example from the Global Times, whose news items seem to run in parallel with the priorities of the Chinese Government:

‘Since 2004, China has been approving projects using advanced nuclear power reactors, including US-based Westinghouse’s AP1000 and France-based Areva’s EPR (Evolutionary Power Reactor), many of which are now under construction. Dubbed generation III reactors, they are designed to withstand the crisis that damaged the Japanese nuclear plant.

Construction of these projects has not been smooth. Sanmen Nuclear Power Station in Zhejiang Province was expected to be the first nuclear power plant in the world that uses AP1000 technology. The first of the two reactors was scheduled to finish construction and start operation in November 2013, but construction is now over 18 months behind schedule. The plant won’t start operation until 2016 at the earliest, an official from China’s State Nuclear Power Technology, the company building the power plant, said in January.’ http://www.globaltimes.cn/content/927146.shtml

Of course the Chinese Government has some grandiose plans for nuclear power construction. So did the UK Government back in 2010!

So where is the British flight into ‘nuclear power is cheap somewhere’ fantasy leading us? Well, to nationalisation, of course, a charge led by the IPPR, a centre-left think tank, which I suppose, is a more plausible vehicle for this than, say, a right leaning think tank such as Policy Exchange (who, incidentally, have recently discovered that onshore wind power is reasonable cheap after all and should be offered some contracts).

Nationalisation won’t make nuclear power any cheaper. The claims that somehow the ‘cheaper’ money from the state will make the technology less expensive ignore some relevant facts. First, the Hinkley C deal already has access to state backed finance through the agency of the state owned (French and Chinese) companies that are building the plant and the state guaranteed loan offered by the UK Treasury. Setting up a state body to compete with others in the electricity market will also generate a further (interesting) EU state aid application. But really the talk of cheap state money, is not the key point that the nuclear people are aiming at.

What the pro-nuclear lobby now wants is for limitless sums of money to be siphoned off from public spending on education, health and whatever else and spent on building nuclear power stations. The money will be notionally borrowed, a contract that will be concocted that will claim that the electricity consumer will pay the money back at a later date, and the balance will be paid for by, well, less schools, hospitals etc. Meanwhile a story will be manufactured about how all of this is cheap. Cognitive dissonance will prevent people asking why if it is ok to fund nuclear power this way, then why isn’t it ok to fund offshore wind farms and other things.

Of course, even this isn’t ‘the crack’ as a Liverpudlian friend of mine used to put it. The ‘crack’ is that the state will end up giving the whole project a blank cheque so that the disastrous construction process can be bankrolled entirely from a bottomless pit of state finances. Talk about allegedly ‘cheap’ money from the Government is just a cover for what the nuclear people are really aiming for. A cost-plus contract, spend however much you want contact, a blank cheque. The road towards this will no doubt be littered with pretend signposts, like they’ll be a tender process etc, but at the end of the day nothing will happen until the blank cheque has been sent. I have been pleasantly surprised to see that the UK Government has not signed such a thing. The Treasury has not been pushed into accepting this (one thing that me and George Osborne agree about). Yet.

Source: CleanTechnica. Reproduced with permission.

Comments

7 responses to “Dispelling the notion that nuclear is cheaper somewhere else”

  1. onesecond Avatar
    onesecond

    Economically the Hinkley C point makes no sense whatsoever. I read an interesting article though, that the main reason for the UK government to throw out money like that, is, that the nuclear industry somehow convinced them, that their ability to maintain their nuclear submarine fleet is under threat if they don’t provide this project to produce skilled nuclear workers. This of course is wrong, nuclear is not that complicated (even North Korea can do it), it is just totally expensive and if the throw enough money at their nuclear submarines, they should be fine. Why should a workforce solely concerned about the nuclear submarines be insufficient? Oh right, because the nuclear industry says so. Well then take billions and billions more if you say so.

  2. onesecond Avatar
    onesecond

    About the cheap Chinese reactors: People don’t have the numbers, they just claim that. And even if they are cheap, then they are probably as good as the Chinese industrial and chemical parks that blow up now and then and as cheap as all the Chinese buildings that collapsed in the 2008 earthquake due to not adhereing to building codes, killing 70000 (!) people.

  3. Alastair Leith Avatar
    Alastair Leith

    France has 75% of its power coming from nuclear power and all the attendant sunk costs involved with building out that fleet of reactors. If they are finding is cheaper to junk all that and go 100% RE then any country proposing new build nuclear — especially if they have little to no experience in reactor construction, Premier Weatherill— is certifiably mad.

    That’s just on the economics and leaving aside a raft of risk management, nuclear proliferation, waste, GHG emissions and resource depletion issues.

    1. Calamity_Jean Avatar
      Calamity_Jean

      IIRC, France is cutting the share of electricity coming from nukes from 75% to 50%, by closing some of it’s plants. Of course, once they get to 50% there’s nothing to prevent them from deciding to keep replacing nuclear with renewables.

      1. Alastair Leith Avatar
        Alastair Leith

        That decision came out of an extensive investigation of 100%, 95% and 50% RE modelling. It was made before the report was even finish and then the report was leaked so they released it without the ex-summary finish. Interestingly the research is proposing ammonia storage medium.

        You made a comment on the RenewEconomy story about this too CJ.

        1. Calamity_Jean Avatar
          Calamity_Jean

          “You made a comment on the RenewEconomy story about this too CJ.”

          That was five months ago, I had forgotten. Are you hinting that I should comment less?

          1. Alastair Leith Avatar
            Alastair Leith

            no not at all, I was surprised to see my own comment. was like, that was a clever comment can’t believe I wrote that.

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