Barnaby Joyce and other pro-nuclear members of the Coalition – and the numerous conservative commentators calling for nuclear instead of renewables – should take note:
The so-called “nuclear renaissance” in the United States has had another major setback, with another two reactors under construction in South Carolina abandoned after costs spiralled out of control, leaving consumers holding the bill for plants that will never be completed.
The plug was pulled on the V.C. Summer nuclear project last week after $US9 billion had already already spent, and after it became clear that the original $US11.5 billion bill for the whole project would more than double to at least $US25 billion ($31 billion).
South Carolina consumers will be left holding the bill, and 20 per cent of their electricity rates will go to pay for something that will never be completed.
Critics say the decision heralds the demise of new nuclear in the US, and expect the Vogtle nuclear reactor project in Georgia to also collapse as its costs also surge.
The Vogtle reactors, also funded by consumers and taxpayer loans, are the only two reactors under construction in the US, out of the 31 once hailed as a sign of the industry’s renaissance in the US.
Given the farce around the massive Hinkley Point project in the UK, which is running more than $2 billion over-budget after just the first year of a planned 10-year construction period, and the cost over-runs for next generation reactors in France and Finland, it seems clear that nuclear has done its dash in western economies.
Hinkley is now tipped to cost £19.6 billion, a rise of £1.5 billion, and it faces delays.
On top of that, the Independent reported last month that government figures now show the total bill to households could total £50 billion ($A83 billion), more than eight times greater than the National Audit Office’s initial 2013 estimate that a public investment of £6 billion would be required.
The spiralling costs are due to the terms of the Government’s agreement with EDF, the French state-owned electricity company, which is building the plant in conjunction with China General Nuclear Power. As in the US, the risk is held mostly by consumers and taxpayers.
France is now faced with a massive bill just to maintain its ageing reactors as it charts a course towards more wind and solar and less reliance on nuclear. A recent study suggested the country would find it cheaper to scrap the whole nuclear project and investing in wind and solar instead.
Given that France is also a nuclear arms power, and the military and civil industries go hand in hand, that is not likely to happen, but the focus is clearly switching to cheaper renewables
South Korea’s new president also wants the country to abandon nuclear power, because of its costs and risks, taking another major player out of the market, and highlighting the fact that the nuclear industry cannot survive without massive subsidies.
In the US, a dozen existing nuclear plants are also being retired because they can no longer compete with wind, solar and gas, and there is now a major push – possibly difficult to achieve with the Trump administration – to put an end to federal bailouts for existing nuclear plants that could cost more than $US275 billion.
“The message … is simple, nuclear power is uneconomic,” says Mark Cooper, a senior fellow for economic analysis, Institute for Energy and the Environment at Vermont Law School.
“The capital cost of renewables is between one-eighth and one quarter the cost of VC Summer. Even adjusted for load factors, nuclear power is two to three times more costly then the alternatives.”
The nuclear industry is putting pressure on the Trump administration to approve a bail-out of existing nuclear generators, which they say cannot compete against wind, solar and gas.
A Department of Energy advisory committee last year recommended that nuclear receive an additional production create of $US27/MWh which would result in a bill to taxpayers of more than $US228 billion.
To put that in perspective, a newly released study by the Berkley Renewable Energy Laboratory puts the average cost of new wind farms at just $20/MWh. Solar is not far behind – and both cheaper than the subsidies needed by nuclear to keep ageing plants operating.
“Nuclear power is failing despite the fact that it is already heavily subsidised,” said Tim Judson, of the Nuclear Information and Resource Service.
“With renewable energy now surpassing nuclear by widening margins, its clear that subsidizing nuclear is an expensive way to slow down the growth of clean, safe, affordable, job-creating energy sources.”
Consumers are the biggest victims from the latest attempts to revive the nuclear industry, because the utilities that proposed them made sure that it was the consumers, not the investors, that took the risk.
Peter Bradford, a former Nuclear Regulatory Commission (NRC) Commissioner, and past chair of the New York and Maine state utility regulatory commissions, said using ratepayers to finance construction of nuclear reactors in advance are debacles waiting to happen.
“The primary lessons for Georgia, Virginia, and other states, from the South Carolina cancellations (as well as Levy County in Florida and Kemper in Mississippi) is that laws and regulatory decisions placing economic risks on customers instead of the investors and lenders who should properly bear them are a disastrous mistake,” he says.
“Freed of responsibility for the consequences of their mistakes, utility executives too often plunge into ill-advised schemes to pad their rate bases (and individual compensation) when they should be managing competitive processes designed to select the most cost-effective alternative.”
He warned that taxpayers could still end up on the hook for billions of dollars if the Vogtle project goes belly up.
Unlike VC Summer, Vogtle managed to win themselves more than $US8 billion in taxpayer-backed loan guarantees. Critics say it is clearer than ever that the writing is on the wall for taxpayers.
Bradford says it is clear that the any remaining illusions about a resurgence of nuclear power in the United States are now dead.
“In fact, there never was an actual nuclear renaissance, just the 31 paper applications on file at the Nuclear Regulatory Commission by early 2009.
“Now nearly all but two are cancelled, leaving a trail of economic waste in their wake. The intent of the renaissance dream was to show that new reactor designs and an expedited licensing process from which the public was largely excluded would produce reactors that could be completed on time and on budget as well as at competitive costs.
“The expectation was that private financing, without subsidy from customers and taxpayers, would then become available to nuclear power. That dream is now in ruins.
“The Westinghouse bankruptcy and subsequent events in South Carolina make the lessons so clear that even the most ardent nuclear propagandists probably can no longer shout them down.”