Subsidies for new nuclear reactors are a “bet the farm” investment

The traditional business model of “build plants, sell power” and its era are over;  the rapid changes underway require a more agile, many-faceted approach to meeting energy demand in a responsible manner.  Fukushima has exposed new previously-uncalculated risks to nuclear reactors which could each bring even the largest utility company to its knees financially.

The next nuclear disaster—and the world has been averaging one such disaster every 11 years—is likely to lead to even more decisive actions by politicians, perhaps including the closing down of nuclear plants that are still under construction or are relatively new.

However world’s largest utilities are found still stubbornly and tenaciously holding on to plans dominated by massive investments in new, risky and ever-more-costly nuclear plants, while they limit or reject offers of more solar electricity. Those utilities seem oblivious to the real trends in energy economics and technology that are occurring in competitive markets.

The nuclear industry has greatly succeeded in obtaining large subsidies and positive rhetoric (“safe, clean nuclear power”) from elected officials, but ultimately and overwhelmingly failed to live up their lofty claims.

Commercial nuclear power has been with us for more than forty years. If it is not a mature industry by now, consumers of electricity should ask whether it ever will be competitive without public subsidies. There are no projections that nuclear electricity costs will decline

The media has also been a cheerleader for the nuclear industry. Since the early 2000s, slews of media reports have predicted the “nuclear renaissance”, dismissing the unresolved economic, waste and safety problems of nuclear power.

What They Said Then –General Electric Advertisement, 1954

We already know the kinds of plants which will be feasible, how they will operate, and we can estimate what their expenses will be.  In five years – certainly within 10 – a number of them will be operating at about the same cost as those using coal.  They will be privately financed, built without government subsidy.

What We Are Saying Now – The Energy Fair Group Report

There is absolutely no case for subsidizing nuclear power” said Dr Gerry Wolff of the Energy Fair group, responding to the recently-published draft of the Energy Bill 2012. “The proposed ‘feed-in tariff with contracts for difference’ is a blank cheque to a nuclear industry that is already heavily subsidized.

The group’s report on “The financial risks of investing in new nuclear power plants” shows that, by the time any new nuclear power plant may be built in the UK (2020 or later), much of the market for its electricity will be disappearing. The report is based on the UK market, but the same problems follow nuclear construction projects around the world.  In a world that is dominated by renewables, the idea that nuclear power is needed to provide ‘base load’ is out dated.

Despite the fact that all additional nuclear electricity since 1996 has been from existing reactors, most federal elected officials and media are focused on the construction of new reactors.

Yet nuclear power’s own myriad limitations will constrain its growth, it is hampered by a variety of problems that limit its viability as a climate strategy absent massive government subsidies and mandates, especially in the near term.

Continued On Page 2…

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