New Nuclear Plants Not Viable Without Government Support 19 comments
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New nuclear power plants are unlikely to be built without financial incentives from governments, according to Oxford Analytica.
A so-called nuclear renaissance has been underway for some years now, OxAn says. It has taken three broad forms, namely:
- the predominantly state-led and financed continuation of nuclear construction in countries with an existing industry, such as South Korea, China, India and Russia;
- renewed support for nuclear power in countries that have existing industries but that have not seen any newbuild in decades, the most notable in this regard being the United Kingdom and United States; and
- a host of potential newcomers to the nuclear market, the most substantial groups being emerging economies in Asia and the Middle East.
However, in practice, outside countries where nuclear is state-subsidised and driven by government-set targets, new nuclear is making little progress, despite increasingly supportive policy environments. Moreover, the financial crisis is having various impacts on the industry, the most critical of which is likely to be the increased cost of capital.
Increased borrowing costs are likely to more than outweigh the impact of the decline in basic commodity prices. Even if central bank rates have fallen, the cost of project finance has not.
For project financiers working in energy, wind, solar or natural gas-fired plants, remain much safer investments than nuclear. Smaller-scale projects also suit the current conservatism in project lending.
On the other hand, governments, faced with recession, are committing themselves to a huge range of public spending initiatives, and promotion of so-called ‘green jobs’, which are undermining previous commitments not to engage in forms of state aid. A lack of bank lending is also pushing borrowers towards state banks, export-import banks and multilaterals. Both these trends could benefit nuclear, as governments become more amenable to providing the cheap finance that new nuclear requires. As such, the financial crisis may increase the chances of state support for new nuclear.
Nevertheless, the main new nuclear building programmes are taking place in China, Russian and India — all countries where the government has mandated targets and is building new units through state-owned companies. In addition, South Korea and Japan, which are already heavily dependent on both nuclear power and imported fuels, have major construction programmes. In South Korea, all of the country’s nuclear reactors are owned by a subsidiary of the state-owned Korea Electric Power Corporation. By contrast, only two nuclear plants are under construction in Western Europe and none in the United States.
It would appear that the risks associated with new nuclear in liberalised, or liberalising, markets are too high to attract capital at a price that makes new nuclear viable.
Without additional state support, new nuclear will have to be built from existing utility revenue streams, which in some cases could damage credit ratings.
Meeting both carbon emissions and supply security goals will be difficult, if not impossible, if an established low-carbon base-load technology like nuclear is ignored, OxAn concludes. However, newbuild does not look viable in current market conditions. State support is needed and may be more forthcoming from governments faced with recession.
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This article has 19 comments:
cost/capital, if not tight, would still be gated by ENERGY/ENVIRONMENTAL policy decisions within OECD nations.
Also, the alternatives aren't much safer. For instance, liquified natural gas cargo ships and storage tanks are very vulnerable--and dangerous to their surroundings in case of an attack. And pipelines are vulnerable too.
Solar has NO maintenance and NO fuel cost and NO significant availablity threats or issues (other than dealing with the daily load leveling - which really provides another opportunity in solving that problem from in-process to end use storage, or like we do today for peaking problems, provide complementary power production during dipping periods) - but it is not a deal breaker! I'm sure hydro had to deal with it's roadblockers: "what about draughts", etc.; not to ignore making folks move, covering historical sites, blocking the fish, ruining nature, etc.
So, Go solar! Subsidized or not, what a dream fulfilled (if you're not already married).
How about a little diversity; a little tolerance; a little flexibility??
About nuclear needing government help. That may be true, because the young geniuses on Wall Street and in The City of London are just as dumb as Gorgeous George when it comes to energy economics, but there is no need to worry. When the price of energy starts escalating again, the Great Unlearned will come to their senses...I think. Moreover, it isn't just the young geniuses, but also our political masters. In a country like Sweden where it is simple to prove that nuclear has paid its way, the ignoramuses in government claim the opposite.
I also know very well what nucs require in maintenance (regardless of the cost or how the cost is priced in for the consumer to pay). It's like cancer: I'd rather not have it at all, regardless of who pays for the treatment for me; even if I come out cured. I'd rather not under go the ordeal; economics aside.
Your problem as an economist is that economics matters ALWAYS. It doesn't.
.
On Jan 10 01:03 PM Ferdinand E. Banks wrote:
> Reading an article like this, and some of the comments, warms my
> heart. What it shows is that I not only know more energy economics
> than most people, but I know a great great deal more. Of course,
> knowing a great deal isn't much help if you find yourself in a seminar
> room or at a conference in front of the Great Unlearned, and so in
> those situations I make a point of taking no prisoners. In terms
> of reliability, flexibility and cost, nuclear is in first place,
> and I explain that very carefully.
>
> About nuclear needing government help. That may be true, because
> the young geniuses on Wall Street and in The City of London are just
> as dumb as Gorgeous George when it comes to energy economics, but
> there is no need to worry. When the price of energy starts escalating
> again, the Great Unlearned will come to their senses...I think. Moreover,
> it isn't just the young geniuses, but also our political masters.
> In a country like Sweden where it is simple to prove that nuclear
> has paid its way, the ignoramuses in government claim the opposite.
energy density
cost
scale
until the arithmetic is done, the preference is not clear[wind/solar vs, coal or nuclear or NG]
as per solar maintenance--
what size facility[GW hr KW hr or what]?
CSP or PV?
wind maintenance tends to be on high side
dialogue with major players suggested[ FPL group, VESTA, GE, IBERDROLLA, etc]
On Jan 10 12:47 PM nakedjaybird wrote:
> Well, as much as I like nuclear, if given the choice to build solar
> and wind where both have ZERO fuel costs forever and available forever
> vis-a-vis nuclear's low unit power cost and hydro's zero cost of
> fuel, I would certainly take a good hard look at solar and wind before
> committing big bucks and all the rest that goes into new nuclear
> 10-15 year hurang; plus all the annual and unique maintenance chores
> and still have to deal with regulators and waste mongers upon disposal
> and tear down.
>
> Solar has NO maintenance and NO fuel cost and NO significant availablity
> threats or issues (other than dealing with the daily load leveling
> - which really provides another opportunity in solving that problem
> from in-process to end use storage, or like we do today for peaking
> problems, provide complementary power production during dipping periods)
> - but it is not a deal breaker! I'm sure hydro had to deal with it's
> roadblockers: "what about draughts", etc.; not to ignore making folks
> move, covering historical sites, blocking the fish, ruining nature,
> etc.
> So, Go solar! Subsidized or not, what a dream fulfilled (if you're
> not already married).
>
> How about a little diversity; a little tolerance; a little flexibility??
On Jan 10 10:37 AM bjohn13 wrote:
> I would be willing to spend money to actively support new nuclear
> facilities from being built. Sure, nuclear energy is a non-carbon
> producing energy source, but is it green? I hardly think so. In the
> new terror-laden world, does our nation need more targets? Pundits
> claim that there have been no major nuclear catastrophes in almost
> two decades, but all it takes is one.
Sometimes the things you mention just do not matter. Technical feasibilty will trump economic feasibility often. Depends, sometimes, on the simplicity versus complexity of the alternatives, if there are any? And nuc and coal and oil and shale and tar sand have many, many complexities from source to ultimate use, especially including all the in-between conversion and transportation/deliver... aspects, not to mention ultimate use, work and disposal.
Wind will NEVER experience the type nor amount of maintenance that nuclear (and all the others except solar) guarantees.
And, obviously, I'm talking about Solar PV - no moving parts, etc., duh!
And don't get on me about sand to silicon, and sun to electrons, and electrons to real work; shade damage; earth cooling, etc.; all these issues pale in comparison to the destruction in oil, coal, gas, tar, shale, uranium, plutonium, etc.
I have said for many years that when the "many objectors for many different reasons" to nuc flip their light switches on and nothing happens, nuc will come back.
But, solar and wind may be better choices today: no fuel breech damage; no SG replacements; no refueling shutdowns; no dose; no burial req'ts; etc. No revisiting all the previous arguments from siting, regs ... to what, "the whole fuel cycle"......?
W.R.T. wind and solar's low energy and power density, where plenty of wide open space (and even not so open if remote, or self-relient on roof tops, etc.,) wind and solar appropriately work. There is an independence, reliability, maybe even emergency factor which may trump economics, local generation, urban or remote. Major solar and wind farms? Why not. Lot's of non-economic advantages (no moving parts; maintenance complexity; ultimate fuel availability...); and some economic advantages (zero fuel cost forever for starters, and maybe enders!).
PV is not destined for major electric utility--note r. rapier blog, late dec '08 might be useful reference on SOLAR in Europe. time/technology application still ???.
per detroit, these folks are users, not providers of energy. i don't make the linkage.
i reiterate my recommendation to utilize experience of major industry sources who "pay to play" referenced in prior post.
On Jan 10 03:21 PM nakedjaybird wrote:
> Fran - tell Detroit that it's all about energy density, cost and
> scale. Fools are born every minute, yes?
>
> Sometimes the things you mention just do not matter. Technical feasibilty
> will trump economic feasibility often. Depends, sometimes, on the
> simplicity versus complexity of the alternatives, if there are any?
> And nuc and coal and oil and shale and tar sand have many, many complexities
> from source to ultimate use, especially including all the in-between
> conversion and transportation/deliver... aspects, not to mention
> ultimate use, work and disposal.
>
> Wind will NEVER experience the type nor amount of maintenance that
> nuclear (and all the others except solar) guarantees.
>
> And, obviously, I'm talking about Solar PV - no moving parts, etc.,
> duh!
>
> And don't get on me about sand to silicon, and sun to electrons,
> and electrons to real work; shade damage; earth cooling, etc.; all
> these issues pale in comparison to the destruction in oil, coal,
> gas, tar, shale, uranium, plutonium, etc.
Nukes can.
End of Story
the incompetents in congress have let this fester for the last 40 years. the reason is not because there are no solutions - the environmental lobby has blocked the solutions. once the waste issue is resolved, it lowers the costs of construction (you do not have to plan for onsite storage). and you do realize the moronic majority speaker of the senate will not allow a facility to be built in his state.
and for those who continue to think nukes are a terrorist threat - i have a little news for you. of course a terrorist hit on a plant would be front page news. but nukes are built in isolated areas limiting damage. but conventional fossil plants are built in populated areas. ask someone what would happen if you strapped explosives on the main steam lines of a plant using superheated steam.
for your kind information.