When the subject was oil, my students at the Asian Institute of Technology (Bangkok) were politely asked to study the situation in the United States. It told me everything I needed to know about the peaking of oil production, and I presumed that it would do the same for them. In the matter of nuclear, my students in other institutions of higher or lower education this year will be told to study the situation in Sweden – assuming that they prefer a passing to a failing grade.
In the past month or two, several contributions have appeared that turned thumbs down on nuclear energy. Among these were one by Dr Benjamin Sovacool (2010), who provided a strange claim as to why a nuclear renaissance should be questioned, and more lately Diana Powers (2010) who discussed in the New York Times some work of Professor (of economics) John O. Blackburn of Duke University (USA), who was assisted by a graduate student named Sam Cunningham.
The conclusion Blackburn and Cunningham arrived at was that a crossover point has been reached for the cost of electricity generated by nuclear and Solar Voltaic systems. The figure they gave was sixteen cents per kilowatt-hour (=16 c/kWh).
Under the heading of cost, Dr Sovocool has some interesting news for non-thinkers. His levelized cost figures include 3-7 c/kWh for hydro, 5-12 c/kWh for wind, 18-30 c/kWh for nuclear, and 20-80 c/kWh for solar voltaics. For what it is worth, his figure for solar voltaics does not match that cited by Ms Powers.
The important thing above is that hydro is the lowest cost source of electricity, which I make a point of accepting and telling my students to remember. Without knowing (or being interested in) the exact cost figure for hydro, I can use Swedish and Norwegian data to infer that nuclear and hydro have about the same unit costs for electricity.
I get this because Norway has almost 100 percent hydro, and Sweden has approximately 50-50 hydro and nuclear, and since (before deregulation) Sweden and Norway had about the same (aggregate) electric cost, the cost of nuclear must have been approximately the same as the cost of hydro.
The algebra for that contention is shown in the next edition of my energy economics textbook (2011). In addition, my cost calculation for nuclear is 9 c/kWh.
What about the price of wind generated power. Again Sweden provides a lovely example. The Swedish utility Vattenfall – the 5th largest in Europe – deals in hydro, nuclear, soft coal and wind.
According to the last published report, the first three of these made a profit, but wind made a loss. In case anyone is interested, Vattenfall is a boisterous booster of Carbon Capture and Sequestration (CCS). What they make it their business not to discuss is that if they decide to go into CCS in a big way, only hydro and nuclear will guarantee a profit.
As for the situation with wind, nobody in their right mind should expect this to always guarantee a profit, although it may be true that occasionally profits will be registered by wind parks in favourable localities. Tierra del Fuego, for instance, might be at the top of the list here.
Of course, I don’t need Dr Sovocool or Professor Blackburn or anybody else to tell me anything about the cost of nuclear. The Swedish nuclear inventory of 12 reactors was constructed in only 13-14 years, and since I teach economics and not physics, I happen to believe that when it becomes necessary – in this country and elsewhere – it will be possible to construct large Generation 3 reactors in three years.
And eventually it will become necessary!
By. Professor Ferdinand E. Banks
Banks, Ferdinand E. (2007). The Political Economy of World Energy: An Introductory
Textbook. Singapore, New York and London: World Scientific.
Powers, Diana S. (2010). ‘Nuclear energy loses cost advantage’. The New York Times
July 25 (Global Issues).
Sovacool, Benjamin K. (2010). ‘Questioning a nuclear renaissance’. GPPi Policy Paper No.
8. Lee Kwan Yew School of Public Policy (Singapore)