By Paul Gipe, edited by Renewable Energy Focus staff

The cabinet of Germany's conservative Government on Monday 30 May voted to take the country out of nuclear permanently by 2022. Not to be outdone on the right, the country's opposition parties say that's not fast enough.

Bavaria's conservative party has gone even further and says that while it was first in German nuclear power it will now be first in exiting nuclear. Bavaria, known as the ‘Texas of Germany’ for its conservatism, gets more than 50% of its electricity from nuclear energy.

But it's the sheer cost of nuclear that may overwhelm any industry ‘renaissance’.

Little data exists on the actual cost of new nuclear generation. Rumours persist in Ontario, Canada, that the Government's delay in building its promised new reactors was due to ‘sticker shock’ after receiving costly proposals.

Whatever the reason for delay, the actual cost of the proposals are being hidden from public view.

Thus, policy discussions are often dependent on studies of nuclear's cost by organisations with a particular axe to grind.

One exception is the California Energy Commission (CEC), a public agency mandated with the task of periodically examining the costs of various electricity generation technologies that may be used in the state to meet demand.

There are four operating reactors in the state, two each in two locations. There is an addition 900 MW reactor that was decommissioned by the Sacramento Municipal Utility District (SMUD) after a plebiscite on 7 June, 1989. California is unlikely ever to build another reactor. State law prohibits construction until a permanent waste repository is available.

Nevertheless, the CEC in its most recent Integrated Energy Policy Report (IEPR) examined the cost of electricity from 21 different central-station generation technologies. Such studies, says the CEC, are useful for comparing the relative costs between technologies. The actual cost of electricity to consumers can be quite different from these hypothetical studies.

The detailed study considered three forms of ownership: Merchant Plant, Investor-Owned Utility (IOU), and Publicly-Owned Utility (POU). Merchant plants are built to serve de-regulated markets and assume a high degree of market risk. They may not be able to sell all their electricity at any one time if their price is too high.

Investor-Owned Utilities are the traditional private companies serving a regulated market. In California, Pacific Gas & Electric and Southern California Edison are IOUs. Publicly-Owned Utilities are municipal utilities, like SMUD. Publicly-Owned utilities pay fewer taxes and have access to lower cost financing than either IOUs or merchant plants.

The 186-page report, 2010 Comparative Costs of California Central Station Electricity Generation, found that a 1 GW Pressurised Water Reactor would generate electricity in 2018 from as little as US$0.17/kWh to as much as US$0.34/kWh.

The results of the CEC study are startling. Most renewable technologies today, even solar photovoltaics (PV), generate electricity for less than nuclear power in 2018. Only a municipal utility could generate nuclear electricity for less cost than than that of solar PV.

Currently Germany pays as little as US$0.31/kWh for electricity from solar PV to as much as US$0.41/kWh.

Though industry's promises of "electricity too cheap to meter" have not materialised for either nuclear power or solar PV, the cost of solar-generated electricity today is equivalent to the cost estimated by the CEC for a nuclear plant beginning operation in 2018.

All observers, even critics, expect the cost of solar PV to continue declining during the next decade. If solar PV is cheaper today than nuclear in the future, in all likelihood solar-generated electricity in 2018 will be less costly than that generated by nuclear power if the CEC's estimates of nuclear costs are accurate.

Nuclear uninsurable

In an unrelated study for the German Renewable Energy Association (Bundesverband Erneuerbare Energie), consultants in Leipzig found that nuclear reactors are effectively uninsurable.

While this has been common knowledge in the energy industry for decades, the question has again been raised in light of the costly disaster in Japan and claims by proponents of a nuclear ‘renaissance’ that the technology is ‘safe’.

The 157 page report by Versicherungsforen Leipzig estimated that the premium necessary to insure a nuclear reactor from accident would cost from €0.14/kWh (US$0.20/kWh) to a staggering €2.36/kWh (US$3.40/kWh).

Thus, the cost to insure a nuclear reactor – at a minimum – would cost as much as the electricity itself from a nuclear plant built in California in 2018.

Earlier German studies of the cost for insuring reactors against catastrophic failure found similar results. A 1999 report for the European Commission, ExterneE, on the externalities of energy found that the external cost of nuclear power was €1.80/kWh (US$2.59/kWh) largely due to the cost of insurance.

These studies indicate that the cost of nuclear energy is far higher than proponents have led policymakers to believe.

This feed-in tariff news update is partially supported by An Environmental Trust and David Blittersdorf in cooperation with the Institute for Local Self-Reliance. The views expressed are those of Paul Gipe and are not necessarily those of the sponsors.

Paul Gipe
661 325 9590, 661 472 1657 mobile
pgipe@igc.org, www.wind-works.org