We all knew that 2020 would be an incredibly tough year for nuclear energy. In the United States, the sector has been on the decline for years, saddled with hazardously aging infrastructure and a flood of cheap natural gas thanks to the West Texas shale revolution that the nuclear sector simply can’t compete with. As such, the domestic nuclear sector has become increasingly dependent on government handouts to stay afloat and has saddled the taxpayer with the staggeringly high cost of maintaining radioactive nuclear waste in the form of spent nuclear fuel. COVID-19 only exacerbated the situation, by causing the bottom to fall out of energy demand and placing nuclear energy, which has largely fallen out of favor in the U.S., near the bottom of a long list of energy industries and industrial and economic sectors in general waiting for government bailouts. During the lockdown phase of the pandemic, “renewables have taken a bigger slice of the market because many nations had decided to give new green technologies priority into the grid” reported Bloomberg Green in a May article titled “Nuclear Is Getting Hammered by Green Power and the Pandemic.”
Earlier this summer, however, the U.S. nuclear sector did receive yet another taxpayer bailout. On June 18, the DOE announced “it would be awarding more than $65m in nuclear energy research, cross cutting technology development, facility access, and infrastructure awards.” According to reporting by PowerTechnology, “the awards fall under the department’s nuclear energy programs – the Nuclear Energy University Programme, the Nuclear Energy Enabling Technologies, and the Nuclear Science User Facilities.” This sum of money, however, will almost certainly be too little, too late for domestic nuclear energy.
Related: Iraq Ships More Crude Oil Despite OPEC Output Cut Pledge Just this week, the World Nuclear Industry Status Report summed up the state of the global nuclear industry, and it ain’t pretty. The report shows that the sector continues to stagnate while renewables are going gangbusters. “Just 2.4 GW of new nuclear generation capacity came online last year, compared to 98 GW of solar. The world’s operational nuclear power capacity had declined by 2.1%, to 362 GW, at the end of June,” PV Magazine paraphrased the report’s findings.
And, in what is perhaps the nail in nuclear’s coffin, the report shows that nuclear is now the most expensive form of power generation in the world, with the exception of gas peaking plants. $65 million dollars from the government can’t fix that in a time frame that will save the industry, no matter how innovative the researchers get. The levelized cost of energy of nuclear power production is now $155 per megawatt-hour, as compared to $49/MWh for solar power and $41 for wind. What’s more, nuclear’s increased since the last report, while solar and wind both decreased in cost.
“What is remarkable about these trends, is that the costs of renewables continue to fall due to incremental manufacturing and installation improvements while nuclear, despite over half a century of industrial experience, continues to see costs rising,” read the report released on Thursday.
The impact of this cost difference is obvious. It’s simple economics. Nuclear has become obsolete. “The cost difference is having a huge impact in new generation capacity deployment, with just 2.4 GW of new nuclear plants installed last year, compared to 98 GW of solar and 59.2 GW of wind,” writes PV Magazine.
“Nuclear energy has become irrelevant in the electricity generating technology market,” Mycle Schneider, World Nuclear Industry Status Report coordinator stated. “At the same time, COVID-19 puts additional stress on the sector.” Co-author Antony Froggatt further elaborated: “In economic terms renewables continue to pull away from nuclear power, over the past decade the cost estimates for utility-scale solar dropped by 89 percent, wind by 70 percent, while nuclear increased by 26 percent.”
While other nations are continuing to add nuclear capacity at a breakneck pace, most notably Russia and China, it’s becoming clear that nuclear is not the answer for powering the world in a climate-friendly way unless we see some serious innovation that allows the industry to cut costs in a major way. There are many scientists and researchers endeavoring to do just that, but for now, at least in the U.S., nuclear’s days are numbered.
By Haley Zaremba for Oilprice.com
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