Earlier this month several highly respected climate scientists sent a letter to environmental groups urging them to support nuclear power as a solution to climate change. The letter predictably set off a debate about the importance of nuclear power, and CNN fanned the flames on November 7 when it screened “Pandora’s Promise,” a recently released documentary that depicts nuclear power in a favorable light. The showing was preceded by a debate on Crossfire between consumer advocate Ralph Nader and Michael Shellenberger, President of The Breakthrough Institute, an unabashedly pro-nuclear think tank.
The nuclear boosters charge that traditional environmental groups have stood in the way of nuclear power for decades, cutting off the lone viable source of baseload carbon-free power. While nuclear power may indeed be critical for bringing down carbon emissions in the coming decades, blaming environmental groups for the industry’s troubles is an oversimplification. Whatever supporters of nuclear power may say, the industry is facing enormous challenges due mostly to economics.
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In fact, it is nearly impossible to build new reactors in the U.S. because of their high cost. New reactors cost billions and require years of construction before they come online. Utilities and their financiers are wary of this risk, especially when there are cheaper alternatives. The most recent example of this came on November 8 when Luminant Generation decided to withdraw its application to build two new reactors in Texas, citing cheap natural gas. Many other proposed reactors have been cancelled in recent years for similar reasons.
There are currently five nuclear reactors under construction, but it is unlikely that more will follow. The Watts Bar reactor under construction in Tennessee was originally started in the 1980’s and put on hold because of a lack of electricity demand. Construction recently resumed and is expected to be completed in the coming years at a higher cost than expected. Two reactors in South Carolina and two more in Georgia are also behind schedule and over budget.
In particular, the Vogtle reactors being built by Southern Company in Georgia were highly touted as a model for the new era of nuclear power. Using the Westinghouse AP1000 design, reactor safety would be upgraded while costs cut. The Obama administration jumped on board, awarding a loan guarantee way back in 2010, but the details have yet to be ironed out. Construction began in 2012, but it is already facing delays, with costs rising from an original estimate of $14 billion up to $15.5 billion, prompting Moody’s Investor Service in October 2013 to warn about the negative effect on the credit ratings of the utilities involved.
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Morningstar’s Utilities Observer put it less charitably in a recent report, forcefully claiming that “new-build nuclear in the West is dead.”
Even some existing reactors are beginning to shut down as they age and/or struggle to compete in a market awash in shale gas. Entergy decided to close down its Vermont Yankee plant because of economics. Dominion came to a similar conclusion earlier this year when it decided to shut down the Kewaunee plant in Wisconsin.
Still, the nuclear industry has a compelling case to make. It can produce large amounts of clean electricity. Despite safety concerns, the death toll from nuclear accidents remains orders of magnitude lower than coal-fired power plants, which kills tens of thousands every year from air pollution. With global electricity demand expected to continue to climb in the decades ahead, the world may need to call on nuclear power to meet energy demands while keeping a lid on carbon emissions. Nuclear supporters are right to highlight these strengths. Now, if only the industry can figure out the economics.
By. Nick Cunningham