Is Nuclear Power A Lousy Investment?

July 16, 6:28 PMProgressive Politics ExaminerJay McDonough

Previous Next

13 comments Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Progressive Politics Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

I've written a number of posts here about the call for offshore and ANWR oil drilling, the resultant cost neutrality and time constraints of that drilling, and alternative energy development.  Invariably, a number of commenters stress the need for nuclear power as a power generator.  President Bush, in his news conference yesterday, called for the development of nuclear power for the U.S.

I'm by no means an expert in large scale power generation, but I had this sense that nuclear power was pretty much a lousy business investment.  Given the incredible cost of building a nuclear power plant, the cost of running the plant from the operational, safety and national security standpoint, the cost of waste storage (the price tag for Yucca Mountain has just been re-estimated to be $90B) and, ultimately, the cost to dismantle the facility safely after the power plants life (I believe about 35-40 years), I wondered whether there were any utilities prepared to make those investments. 

I did some research.  In fact, nuclear power plants aren't constructed with private capital and the cost of capacity has increased 2-4x in just the last couple years.  Government subsidies and loan guarantees are required before utilities sign on to implement nuclear programs.   That should be the first sign the business model is flawed.

In addition to the astronomical cost to construct and manage a nuclear power plant, nuclear power is getting whupped in the market place by alternatives. 

In 2006, the worldwide nuclear industry added about 1.4B watts of capacity.  Sounds like alot, right?  As it turns out, that's about 10% of the windpower capacity added and 2.5% of the micropower (non-hydro renewables + heat/power co-generation) capacity added in 2006.  

China, which boasts of a significant investment in nuclear power, has developed 7x more capacity with renewable energy sources and renewable investments are on the order of 7x nuclear. 

In 2007, there's been some upgrading of nuclear power capacity but no new construction.  In 2007, there's been $71B in new capital invested in renewable energy sources and capacity.

In 2007, the U.S., China and Spain each installed more wind capacity that the rest of the world installed new nuclear capacity. 

And in 2007, the U.S added more wind capacity than it had added coal power plant capacity in the last five years.  (Data from the Rocky Mountain Institute)

At the end of the day, the winner(s) in the energy production game are the ones that provide the cleanest, safest and least expensive power.  Based on the investment patterns of the industry and the resultant capacities, it seems pretty clear; the utilities have made some choices already - and they don't include nuclear generated power.