Nuclear power's economic failure

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A new report from Friends of the Earth Australia details the catastrophic cost overruns with nuclear power projects.

There are disturbing, multifaceted connections between small modular reactors and nuclear weapons proliferation, and between SMRs and fossil fuel mining.

Despite the abundance of evidence that nuclear power is economically uncompetitive compared to renewables, the nuclear industry and some of its supporters continue to claim otherwise.

Those claims are typically based on implausible cost projections for non-existent reactor concepts. Moreover, the nuclear lobby's claims about the cost of renewables are just as ridiculous.

Claims about 'cheap' nuclear power certainly don't consider the real-world nuclear construction projects detailed in a new report by Friends of the Earth Australia.

Every power reactor construction project in Western Europe and the US over the past decade has been a disaster.

The V.C. Summer project in South Carolina (two AP1000 reactors) was abandoned after the expenditure of at least US$9 billion leading Westinghouse to file for bankruptcy in 2017.

Criminal investigations

Criminal investigations and prosecutions related to the V.C. Summer project are ongoing ‒ and bailout programs to prolong operation of ageing reactors in the US are also mired in corruption.

The only remaining reactor construction project in the US is the Vogtle project in Georgia (two AP1000 reactors). The current cost estimate of US$27-30+ billion is twice the estimate when construction began (US$14-15.5 billion).

Costs continue to increase and the Vogtle project only survives because of multi-billion-dollar taxpayer bailouts. The project is six years behind schedule.

There are disturbing, multifaceted connections between small modular reactors and nuclear weapons proliferation, and between SMRs and fossil fuel mining.

In 2006, Westinghouse said it could build an AP1000 reactor for as little as US$1.4 billion, 10 times lower than the current estimate for Vogtle.

The Watts Bar 2 reactor in Tennessee began operation in 2016, 43 years after construction began. When construction resumed in 2008 after a long hiatus, the cost estimate to complete the reactor was US$2.5 billion but the final completion cost was US$4.7 billion.

US nuclear renaissance in reverse

The previous reactor start-up in the US was Watts Bar 1, completed 20 years earlier (1996) after a 23-year construction period. Thus Watts Bar 1 and 2 are the only power reactor start-ups in the US over the past quarter-century.

In 2021, TVA abandoned the unfinished Bellefonte nuclear plant in Alabama, 47 years after construction began and following the expenditure of an estimated US$5.8 billion.

There have been no other power reactor construction projects in the US over the past 25 years other than those listed above.

Numerous other reactor projects were abandoned before construction began, some following the expenditure of hundreds of millions of dollars. Twelve reactors have been permanently shut down over the past decade with many more closures in the pipeline.

Western Europe

The only current reactor construction project in France is one EPR reactor under construction at Flamanville. The current cost estimate of €19.1 billion is 5.8 times greater than the original estimate.

The Flamanville reactor is 10 years behind schedule.

The only current reactor construction project in the UK comprises two EPR reactors under construction at Hinkley Point. In the late 2000s, the estimated construction cost for one EPR reactor in the UK was £2 billion.

The current cost estimate for two EPR reactors at Hinkley Point is £22-23 billion, over five times greater than the initial estimate.

In 2007, EDF boasted that Britons would be using electricity from an EPR reactor at Hinkley Point to cook their Christmas turkeys in 2017, but construction didn't even begin until 2018.

Is China a shining light for nuclear power?

One EPR reactor (Olkiluoto-3) is under construction in Finland. The current cost estimate of about €11 billion is 3.7 times greater than the original estimate. Olkiluoto-3 is 13 years behind schedule.

Nuclear power is growing in a few countries, but only barely. China is said to be the industry's shining light but nuclear growth is modest ‒ an average of 2.1 reactor construction starts per year over the past decade.

Moreover, nuclear growth in China is negligible compared to renewables ‒ 2 gigawatts (GW) of nuclear power capacity were added in 2020 compared to 135 GW of renewables.

There were only three power reactor construction starts in Russia in the decade from 2011 to 2020, and only four in India.

Nuclear vs renewables costs

Western Europe and the US provide the most striking examples of a more generalised problem with nuclear power: alone among energy sources, it becomes more expensive over time, or in other words it has a negative learning curve.

Nuclear power has become far more expensive than renewables and the gap widens every year. Lazard's October 2021 report on levelised costs of electricity gives these figures (US$ / megawatt-hour (MWh))

Nuclear 131-204

Wind - onshore 26-50

Solar PV - rooftop residential 147-221

Solar PV - rooftop commercial and industrial 67-180

Solar PV - community 59-91

Solar PV - crystalline utility scale 30-41

Solar PV - thin film utility scale 28-37

Solar thermal tower with storage 126-156

Geothermal 56-93

The nuclear cost is comparable to rooftop residential solar PV, but the latter does not require large downstream costs such as transmission from a power plant.

Capital cost comparisons

Lazards provides these capital cost comparisons in its October 2021 report (US$ per kilowatt):

Nuclear 7800-12800

Wind - onshore 1025-1350

Solar PV - rooftop residential 2475-2850

Solar PV - rooftop commercial and industrial 1400-2850

Solar PV - community 1200-1450

Solar PV - crystalline utility scale 800-950

Solar PV - thin film utility scale 800-950

Solar thermal tower with storage 6000-9090

Geothermal 4325-5575

In 2020, a record 256 GW of renewable capacity were added to the world's power grids compared to a net gain of 0.4 GW of nuclear capacity (and a 3.9 percent decline in nuclear power generation).

This year will be another record-setting year for renewables with 290 GW installed so far, and nuclear power has flatlined yet again with five reactor start-ups matched by five permanent closures.

Small modular reactors

Small modular reactors (SMRs) are heavily promoted but construction projects are few and far between and have exhibited disastrous cost overruns and multi-year delays.

It should be noted that none of the projects discussed below meet the 'modular' definition of serial factory production of reactor components, which could potentially drive down costs.

Using that definition, no SMRs have ever been built and no country, company or utility is building the infrastructure for SMR construction.

In 2004, when the CAREM SMR in Argentina was in the planning stage, Argentina's Bariloche Atomic Center estimated a cost of US$1 billion / GW for an integrated 300 MW plant (while acknowledging that to achieve such a cost would be a "very difficult task").

Now, the cost estimate for the CAREM reactor is a mind-boggling US$23.4 billion / GW (US$750 million / 32 MW). That's a truckload of money for a reactor with the capacity of two large wind turbines. The project is seven years behind schedule and costs will likely increase further.

Russia's floating plant

Russia's floating nuclear power plant (with two 35 MW reactors) is said to be the only operating SMR anywhere in the world (although it doesn't fit the 'modular' definition of serial factory production).

The construction cost increased six-fold from 6 billion rubles to 37 billion rubles (US$502 million).

According to the OECD's Nuclear Energy Agency, electricity produced by the Russian floating plant costs an estimated US$200 / MWh, with the high cost due to large staffing requirements, high fuel costs, and resources required to maintain the barge and coastal infrastructure.

The cost of electricity produced by the Russian plant exceeds costs from large reactors (US$131-204) even though SMRs are being promoted as the solution to the exorbitant costs of large nuclear plants.

Climate solution?

SMRs are being promoted as important potential contributors to climate change abatement but the primary purpose of the Russian plant is to power fossil fuel mining operations in the Arctic.

A 2016 report said that the estimated construction cost of China's demonstration 210 MW high-temperature gas-cooled reactor (HTGR) is about US$5 billion / GW, about twice the initial cost estimates, and that cost increases have arisen from higher material and component costs, increases in labour costs, and project delays.

The World Nuclear Association states that the cost is US$6 billion / GW.

Those figures are 2-3 times higher than the US$2 billion / GW estimate in a 2009 paper by Tsinghua University researchers.

China reportedly plans to upscale the HTGR design to 655 MW but the Institute of Nuclear and New Energy Technology at Tsinghua University expects the cost of a 655 MW HTGR will be 15-20 percent higher than the cost of a conventional 600 MW pressurised water reactor.

HTGR plans dropped

NucNet reported in 2020 that China's State Nuclear Power Technology Corp dropped plans to manufacture 20 HTGR units after levelised cost of electricity estimates rose to levels higher than a conventional pressurised water reactor such as China's indigenous Hualong One.

Likewise, the World Nuclear Association states that plans for 18 additional HTGRs at the same site as the demonstration plant have been "dropped".

In addition to the CAREM reactor in Argentina and the HTGR in China, the World Nuclear Association lists just two other SMR construction projects.

In July 2021, China National Nuclear Corporation (CNNC) New Energy Corporation began construction of the 125 MW pressurised water reactor ACP100.

According to CNNC, construction costs per kilowatt will be twice the cost of large reactors, and the levelised cost of electricity will be 50 percent higher than large reactors.

Fast reactor

In June 2021, construction of the 300 MW demonstration lead-cooled BREST fast reactor began in Russia.

In 2012, the estimated cost for the reactor and associated facilities was 42 billion rubles; now, the estimate is 100 billion rubles (US$1.36 billion).

Much more could be said about the proliferation of SMRs in the 'planning' stage, and the accompanying hype.

For example a recent review asserts that more than 30 demonstrations of different 'advanced' reactor designs are in progress across the globe.

In fact, few have progressed beyond the planning stage, and few will. Private-sector funding has been scant and taxpayer funding has generally been well short of that required for SMR construction projects to proceed.

Subsidies

Large taxpayer subsidies might get some projects, such as the NuScale project in the US or the Rolls-Royce mid-sized reactor project in the UK, to the construction stage.

Or they may join the growing list of abandoned SMR projects:

* The French government abandoned the planned 100-200 MW ASTRID demonstration fast reactor in 2019.

* Babcock & Wilcox abandoned its Generation mPower SMR project in the US despite receiving government funding of US$111 million.

* Transatomic Power gave up on its molten salt reactor R&D in 2018.

* MidAmerican Energy gave up on its plans for SMRs in Iowa in 2013 after failing to secure legislation that would require rate-payers to partially fund construction costs.

* TerraPower abandoned its plan for a prototype fast neutron reactor in China due to restrictions placed on nuclear trade with China by the Trump administration.

* The UK government abandoned consideration of 'integral fast reactors' for plutonium disposition in 2019 and the US government did the same in 2015.

Hype

So we have a history of failed small reactor projects.

And a handful of recent construction projects, most subject to major cost overruns and multi-year delays.

And the possibility of a small number of SMR construction projects over the next decade.

Clearly the hype surrounding SMRs lacks justification.

Moreover, there are disturbing, multifaceted connections between SMR projects and nuclear weapons proliferation, and between SMRs and fossil fuel mining.

Hype cycle

Dr Mark Cooper connects the current SMR hype to the hype surrounding the 'nuclear renaissance' in the late 2000s:

"The vendors and academic institutions that were among the most avid enthusiasts in propagating the early, extremely optimistic cost estimates of the "nuclear renaissance" are the same entities now producing extremely optimistic cost estimates for the next nuclear technology. We are now in the midst of the SMR hype cycle.

* Vendors produce low-cost estimates.

* Advocates offer theoretical explanations as to why the new nuclear technology will be cost competitive.

* Government authorities then bless the estimates by funding studies from friendly academics."

The future is renewable, not radioactive

Enthusiasts hope that nuclear power's cost competitiveness will improve, but in all likelihood it will continue to worsen.

Some nuclear enthusiasts support carbon pricing. That would improve nuclear power's economics relative to fossil fuels.

But carbon pricing wouldn't improve nuclear power's competitiveness relative to renewables.

This Author

Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and the author or a new report on nuclear power's economic crisis.

More from this author

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