I like that idea, because when I was arguing with some local ignoramuses about the Swedish nuclear retreat, I suggested that nuclear might be optimal for the obtaining of 'new' fuels.

What about all these gorgeous renewables that Tam and his friends have fallen in love with. We are moving in that direction, which I think is a good thing, but while moving as fast as advisable if cost is taken into consideration, it will be a very long time before we "get off" fossil fuels. A French colleague has estimated that the price of oil will exceed 300 dollars/barrel in a few decades, and I suppose that he obtained that figure by employing an estimate by the French government that a peaking of world oil could take place around 2013. If any of this is true or even close to being true, then I suggest that although Tam Hunt means well, it might be just as well if we ignore his fantasies about renewables and give some thought to the kind and amount of nuclear equipment that we should construct.

A recent review of 99 US nuclear power plants (there are currently 103 operating in the US) and their lifetime costs (assuming a 40 year lifespan, which is in my view generous), by Prof. Dan Kammen and his colleagues at UC Berkeley, found an average of about 7.5 cents per kWh. Most newer plants were much more expensive, some as high as 14 cents per kWh. These figures are of course much higher than the absurd figures bandied around by folks like Patrick Moore, the Greenpeace activist turned nuclear industry shill, who discussed existing plants "operating costs" of about 2 cents per kWh, as though this is anything like the complete cost of nuclear power. He (and you apparently) like to forget the capital costs of nuclear plant construction, which are enormous.

Not including capital costs in the cost of electricity from nuclear plants is like buying a car and not including your monthly loan payments in your total carrying costs for the car.

With nuclear power so expensive, it's quite clear that renewables and energy efficiecy are the answer for climate mitigation. Energy efficiency in particular is far more cost-effective. So why on earth would nations invest in nuclear power when there are so many better alternatives? Maybe money has something to do with it....

Email if anyone would like a copy of Kammen's report.

Early CANDU-6s took about eight years from first pour of concrete to full power but this was later reduced to about six years. Unpredictable external factors were largely responsible for delays and cost increases in two: runaway inflation in Argentina requiring renegotiation of the Embalse contract, and regime change in Romania causing suspension of the construction of Cernavoda-1. The six most recent CANDU-6 reactors were all completed on time and within budget, with Qinshan-4 and -5 in China being six weeks and four months ahead of schedule respectively. Indeed, for Qinshan-5 from first concrete pour to 100 per cent power took only 54 months, making it a record for power reactors built in China."

http://www.magma.ca/~jalrober/CANcoste.htm

80% of our energy used would be in the form of electricity. This is either as it is being generated or from stored sources, like battereis or capacitor banks.

20% of our energy would be from some kind of storable fuel (probably methane or methanol, maybe something else) Of this 20%, about half (10% total) would come from biomass - biofuel derived. The other half would be synthesized using electrolyzed hydrogen and the CO2 byproduct from the biofuels. This would be the most expensive of the 3 main energy sources.

Hydrogen, per se, in vehicles, makes no sense at all. No one asks this, but how would a hydrogen fuel play with a biomass-derived fuel? It would be too wasteful to pull hydrogen from a biofuel that is already carbon-neutral. Better to synthesize something practical to carry around that is the same product as a biofuel, such as methanol or methane. The CO2 by-product from biofuel production provides a good source of envirnmental benign CO2 in concentrated form.

From a practical sense, it would be hard to see how this could be performed without nuclear power, as their would be no baseline generation at all, as coal plants would not be available.

But we can't be totally sure on this yet, b/c the technologies are not at the point yet where we can be certain, hence our hedging.

Re nuclear as a baseload power source, you forget (as most do) that there are many renewable baseload power sources such as hydroelectric, geothermal (huge resource base) biomass and concentrating solar with molten salt thermal storage or other types of storage, or a natural gas backup, such as is used at the SEGs plants in California.

Now, as I've tried to explain to you, a palpable slice of academic economics is nonsense, but there is one part that I definitely buy: if nuclear power is inexpensive in Sweden it can also be inexpensive in the US, and if the Finns choose nuclear over the alternatives - given their access to the alternatives - then lesser mortals should consider doing the same.

About the work of the good Jim Kammen and his foot soldiers at Berkeley. There was a guy from Berkeley who came to Sweden and tried to tell me - Fred - that electric deregulation was not only a good thing, but the only thing. Fortunately I had my soapbox with me that day, and so I was able to work some magic. You used the word "shill" with reference to the excellent Patrick Moore, well that word describes your Berkeley henchmen perfectly. The sad thing here is that the time to have started building those nuclear plants that are certain to be constructed in the future was four or five years ago when interest rates were rock bottom. I don't have to tell you the significance of low interest rates for capital costs, I hope.

Wake up Tam! Get on the team. We're going to have more nuclear whether you or the wonderful Kammen and his merry men want it or not. The thing is to make sure that it's the right kind of nuclear in the right place, and the right...well, everything.

In whcih the 2004 retail small-use electricity rate in France is stated, all taxes in (20.5% VAT + 10% city) at Euro $0.1057 on-peak and Euro $0.0644 off-peak. 87% nuclear. Explanation? Also France EDF has no difficulty selling all excess power to their neighbors at what can be presumed to be fair rates, else the EU would step in.

Sure most Californians if asked would love to have access to such cheap electricity.

Hunt should be forgiven. He is so blinded by his anti-nuclear activism that he does not understand "fully-costed" or "amortization" as well described by that grudging ombudsman, Murray Duffin, in his 10/8/04 Energy Pulse article, "THE ENERGY CHALLENGE 2004 - Nuclear". This is surprising since he is willing to accept $0.14/kW-hr as the "lifetime cost" for power from the never commercially-run Shoreham nuclear generating station. The esteemed Kammen and his merry band seem to have adopted the principal of modified reverse amortization for Shoreham. Last heard from, Hunt was tracking down the history of "lifetime cost" for power produced at Boulder and Grand Coulee Dams. All this, presumably, to understand the contortions of his Berkeley colleagues. Apparently he is still tracking.

You suggest Californians would welcome more nuclear power. That's rather funny in light of the fact that the levelized cost of nuclear electricity in California, from the remaining two plants (San Onofre 2 and Diablo Canyon 2) is, respectively, 7.2 cents per kWh and 7.4 cents. The report doesn't have data on the first reactor for each of those plants but I suspect it's much higher on a levelized basis.

As for the French data you sent, it's meaningless by itself. The retail cost may include subsidies, which I believe are very large. If you have data on levelized cost of electricity from French plants, please send my way.

Last, if you were being intellectually honest, you would realize that nuclear power is most definitely not the way to go to mitigate climate change. If we ignore everything else and look just at economics, it's abundantly clear than energy efficiency, wind power, geothermal, hydro, and biomass can meet future demand in a cost-effective manner - far more cost-effectively than nuclear power can. Nuclear power is the most subsidized form of electicity in the U.S., with $13 billion in subsidies ($5.8 billion in production tax credits alone) in the 2005 Energy Policy Act.

Here's 2003 figures for levelized cost of electricity from various renewable energy sources (CA Energy Commission data):

Energy efficiency, 2000-2004 programs: 1.7 cents/kWh average Flash geothermal: 4.52 cents/kWh Wind: 4.93 cents/kWh Hydro: 6.04 cents/kWh

These figures have of course changed since 2003, but so have all other new plant construction cost figures, making this relationship still very favorable in terms of baseload renewables and wind.

Just to level the playing field here a bit, Hunt should be asked to reproduce the calculations for "levelized cost of nuclear electricity" at SONGS 2 and DCNPP 2 for Energy Pulse readers. To maintain a high level of "intellectual honesty", Hunt might want to list and explain the assumptions, data and data sources used in such calculations. Hopefully, he can do a better job than Kammen and company. Do not be surprised, however, if the only rigor involved is mortis.

A further point along the same lines. Ontraio hydro planned a small re-furb. shutdown of one of their plants, which they budgeted according to construction industry standards at $350 million with a restart planned in just a few months. It was such a minor event they didn't even remove the fuel from the reactor. HOWEVER, some crazy activists got going in the courts and found a loophole which enabled them to impose a requirement for a full federal environmental review of the process (ridiculous on a 20+ year-old existing facility. What new environmental issues could replacing a set of steam generators raise?) The fedeeral government had JUST THEN started up a new agency to oversee atomic energy in Canada, which agency didn't even have offices, much less staff, at the time the review started. Anyway, they were able to delay the re-start for 3 1/2 years, with no eventual change AT ALL in the actual work performed. HOWEVER, what they did accomplish was to force Ontario Hydro to purchase replacement power on the international spot market for 3.5 years, which cost the company MORE THAN $3 billion. Those SAME ACTIVISTS now run around producing "official publications" claiming that refurbisments of nuclear plants are prohibitively expensive and Ontario Hydro was poorly managed because they didn't know how to estimate refurbishment costs.

You can take your "levelized costs of existing operations" and _____ it.

In California, our per capita electricity use has stayed level since the 1970s due to CA's strong policies in support of energy efficiency (see Paul Krugman's latest NY Times oped), while US per capita electricity use has gone up sharply.

Energy efficiency in the electricity sector can be as simple as replaced an incandescent light bulb with a compact fluorescent light bulb or installing double pane windows or installing a more efficient refrigerator. The capital costs required quickly pay for themselves with reduced energy bills - hence the 1.7 c/kWh figure for energy efficiency programs in California I cited earlier.

Energy efficiency has nothing to do with outsourcing aluminum production, etc.

I came across this choice quote recently from the 1994 Blue Book, which was a CPUC document that set the stage for California's ill-fated deregulation experiment:

"[A] large part of the high rates charged by the IOUs is the result of key investment decisions made a decade or more ago, more or less jointly by both utilities and state regulators. California regulators and utilities, like those in many other states, chose to pursue large nuclear plants in the 1970s. Like many others across the country, nuclear plants turned out to be far more expensive than their advocates hoped or even their critics feared."

Concerning relative costs between nuclear and renewables; two points. First of all, it’s intermittency, not cost, that is the real reason why almost nobody believes that renewable sources will make up more than ~20% of generation for the foreseeable future. Heck, even the renewable power industry doesn’t (e.g., the US Wind Power Association, which estimates ~6% from wind by 2020, at most). Suffice it to say that I don’t share Mr. Hunts optimism concerning renewables (even combinations of different sources) ability to overcome this problem. Concerning conservation, even though it is indeed more economic than all generation options, people still aren’t going to do it to the optimum extent. Most project that aggressive conservation programs could reduce annual power demand growth from ~2% to ~1%. The most we could conceivably achieve is zero growth. But the above article is about eliminating the use of fossil fuels!

Concerning cost, all I can say is that I can produce studies showing that nuclear’s overall costs (including capital) are ~2/3 to half what even wind costs. An example is a recent EPRI study showing costs under 4 cents for nuclear and ~7 cents for wind. We can all argue this till we’re blue in the face, and everyone can come up with studies (with varying degrees of honesty and pedigree) until the end of time. Personally, I tire of it all, especially given that it’s entirely unnecessary. Here’s an idea, let the market (i.e., investors) decide! At least concerning issues like cost.

The three main issues/externalities out there are:

1) Air pollution (~25,000 deaths every year) 2) Global warming 3) Foreign energy imports

Government should simply discourage the above three things by taxing or capping them, and then get the heck out of the way. No picking winners, and no “plans” like the one advocated by Mr. Hunt (above) or by anyone, for that matter. If nuclear is as uneconomic as Mr. Hunt says, than we won’t have any “problem” now will we?

To really have a fair competition between nuclear and other sources, nuclear would have to not be actively interfered with, and treated like other sources. Examples include:

1) Remove the ban on new plants in CA (it’s fossil plants, not nuclear, that have an unsolved waste problem) 2) No political/legal interference with nuclear licensing/construction projects 3) Remove all renewable portfolio standard policies (if renewables are so economical, why are laws needed to require their use?)

Everyone recognizes that many of construction projects for the first wave of plants did not go well, for various reasons. Things will go better this time around, for too many reasons to list here. Apparently, many investors agree. Why are there over 30 new plant proposals in the US? The cost of new nuclear will be at most ~5 cents/kW-hr. Thus, it offers reliable, steady power for roughly the same cost (using Tam’s figures) that renewables offer intermittent, unpredictable power.

1) You assume, as do many people, that all renewables are intermittent. Geothermal, biomass, hydroelectric and backed-up concentrating solar power are BASELOAD renewables. 5% of California's electricity comes from baseload geothermal at very economical rates.

2) We're talking about optimal policies here and about incentives - as you mention. Energy efficiency could, given the right incentives, meet ALL future demand growth for at least the next decade or so, and save money doing it. Accepting this, as I think you do, you should then agree to the second point: governments should provide the policies to ensure that this economical potential is realized. If all states simply followed California's lead on this, we'd be well on our way.

3) You talk about producing reports to back up any position, stating its meaningless. Then you throw out your own figures for new nuclear electricity. Where does this figure come from? It's belied by the gold standard reports on the future cost of nuclear electricity: the 2003 MIT report. As the Kammen/Koomey papers show, however, the 2003 MIT report is wildly optimistic. Studies exist for a reason: they are created to guide policy. There is a continuum of excellence for the various studies and the best ones actually reflect reality, allowing us to project future costs, etc. To ignore this is to be ignored.

4) You talk about leveling the playing field and then seeing what falls out in terms of new power plants. The problem is, this is not remotely realistic, given our system of politics. And even if it was, it certainly wouldn't be nuclear that rises to the top. You cite the 30 new proposals for nuclear plants in the U.S. You clearly don't know why, however, those 30 new proposals exist. I'll tell you: they're a direct result of the more than $13 billion in subsidies provided to nuclear by the 2005 Energy Policy Act. If you don't believe me, simply go back a couple of years and find out how many nuclear proposals there were before this law passed. Not a single nuclear power plant has been built in a competitive economic environment. In other words, nuclear power plants are only built when public money is risked for private gain. This is b/c they aren't economical given the risks they pose.

Nuclear is not the most subsidized power source. With the passage of the 2005 Energy Bill, it went from being the one major energy source that got virtually no subsidies at all to having subsidies on a par with other sources.

On a total subsidy basis (which is a lot less relevant than the per-kW-hr subsidy), fossil fuels got more than nuclear did in the Energy Bill. On a per-kW-hr basis, wind is at least as subsidized as nuclear, and solar PV’s subsidies are about an order of magnitude higher. The nuclear production tax credit is merely the same as wind’s, and for nuclear it only applies to the first 8 GW of plant, and only for a few years.

As for loan guarantees, they apply for all “advanced sources that can result in reduced CO2 emissions” (read the bill). IGCC coal plants received such loan guarantees even before the 2005 bill. Renewable have always gotten financing terms at least that good (and would certainly get these guarantees with the Bill). Wind also has a lot of hidden subsidies, such as required grid upgrades and costs related to fossil backup power. Do Tam’s quoted wind costs include all this?

The subsidies in the 2005 bill are not the main reason why we have over 30 plant proposals (although they do help). After all, they only apply for the first ~6 plants, not 30 or more. And even for the first 6 plants, the subsidies are no better than what other sources are getting. What are these other investors thinking? I’ll tell you. They’re thinking that limits on CO2 emissions are coming. And under any system where CO2 emissions are limited, nuclear needs absolutely no subsidies of any kind to thrive, and be immensely profitable. Anyone who can’t figure that out can’t do basic math, or they, well, think that renewables can meet all of our future needs….

Are they right? Once again, let’s just limit emissions and see what happens!

Arguing over the relative future costs of various sources IS meaningless, because we can just set valid policy (e.g., account for external costs) and let the market decide. This is especially true given the tremendous range of cost values, for different sources, produced by different studies, and the fact that so many studies are politically influenced, one way or another. The good news is that we do not have to resolve these economic issues in order to set the right policy. We can leave that to the market. Just account for external costs, and then ensure that different sources are treated fairly (e.g., equally attractive financing terms, etc..).

I fully agree that we should implement policies to encourage conservation. One of the best ways is to add the external costs of various energy sources, thus increasing their price. Higher efficiency standards for appliances and electronics should definitely be looked at. That said, almost nobody anticipates negative growth in energy consumption.

The MIT report is outdated, especially concerning natural gas prices. Also, I'm not sure they consider CO2 policies (or any external costs for that matter). It's irrelevant that a coal plant costs ~2 cents less if emissions are controlled. Coal is simply not an option. And no, coal w/ sequestration will not compete w/ nuclear. Speaking of cheap gas prices, the temporary and unsustainable glut of gas in the '90s (w/ prices of ~$3/MBTU or less), along with the fact that we had too much generation capacity in the 80s and 90s, is why almost no power plants of any type other than gas were built during that period. This was not a nuclear problem, specifically. This is something people never choose to mention.

Concerning which source will rise to the top, I simply don't agree with you. The best way to find out is to simply limit CO2 (and imported gas/oil) and let the market decide what to do.

Well, as of the present date, THE SWEDISH NUCLEAR INDUSTRY HAS NOT BEEN PROVIDED WITH ANY SUBSIDIES! I'm reluctant to continue trying to explain this to the anti-nuclear mafia, but the next time you visit this country I suggest that you arrange a public 'discussion' between me and your good self, which will give me a chance to humbly and with great respect explain this contention, and you the opportunity to use your legal training to put me in my place. That is, to elaborate on what you call "the continuum of excellence".

And speaking of that continuum, I spent a few years one evening trying to make economic sense of the Kammen report. Unfortunately I failed, so could you arrange for me to obtain, in hard form, the latest copy of Professor Kammen's masterpiece before you arrive.

Fred

Environmental externalities costs are the "Holy Grail" of the alternative energy folks. There are two fundamental aproaches to calculating those costs: control cost; and, damage cost. Assuming it is possible to get past that decision, the challenge then becomes establishing accurate cost numbers. California, at one time, had established three different environmental externalities cost numbers for various controlled pollutant emissions: one cost for emissions in the LA basin; one for emissions in the rest of the state; and, a third for emissions outside the state. It will not take you long to guess which cost was highest and which lowest. Some, myself included, thought this was just a bit cynical at the time.

The environmental movement has been "In Search of the Holy Grail" for several decades; and, looking very much like the Monty Python troup in the process. Of course, government could merely set levels which advanced the causes of its selected "winners" while retarding the causes of its selected "losers".

I would also ask that we be careful regarding the difference between conservation (doing less) and energy efficiency (doing with less). Energy efficiency is durable: once the more efficient device is placed into service, it continues to provide benefits over its useful life. Conservation is far less durable: it lasts only as long as the "conservers" continue to choose to do less. For example, how many of us are still wearing our "Carter cardigans" and keeping the house or office at 66F during the winter? My personal guess would be not many.

Average Operating Expenses for Major U.S. Investor-Owned Electric Utilities Electric Power Annual with data for 2005 Report Released: October 4, 2006 Next Release Date: October 2007 Table 8.2. Average Power Plant Operating Expenses for Major U.S. Investor-Owned Electric Utilities, 1994 through 2005 (Mills per Kilowatthour)

Year 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 Plant Type Operation Expenses Nuclear 8.39 8.3 8.86 8.54 8.3 8.41 8.93 9.98 11.02 9.47 9.43 9.79

Fossil Steam 2.97 2.68 2.5 2.54 2.4 2.31 2.21 2.17 2.22 2.25 2.38 2.32

Hydroelectric[1] 5.26 5.05 4.5 5.07 5.79 4.74 4.17 3.85 3.29 3.87 3.69 4.53

Gas Turbine and 2.97 2.73 2.76 2.72 3.15 4.57 5.16 3.85 Small Scale[2] 4.43 5.08 3.57 4.58

Maintenance Expenses

Nuclear 5.23 5.38 5.23 5.04 5.01 4.93 5.13 5.79 6.9 5.68 5.21 5.2

Fossil Steam 2.96 2.96 2.73 2.68 2.61 2.45 2.38 2.41 2.43 2.49 2.65 2.82

Hydroelectric[1] 3.6 3.64 3.01 3.58 3.97 2.99 2.6 2 2.49 2.08 2.19 2.9

Gas Turbine and 2.15 2.16 2.26 2.38 3.33 3.5 4.8 3.43 Small Scale[2] 3.43 4.98 4.28 5.39

Fuel Expenses

Nuclear 4.54 4.58 4.6 4.6 4.67 4.95 5.17 5.39 5.42 5.5 5.75 5.87

Fossil Steam 21.77 18.21 17.35 16.11 18.13 17.69 15.62 15.94 16.8 16.51 16.07 16.67

Hydroelectric[1] -- -- -- -- -- -- -- -- -- -- -- --

Gas Turbine and 53.73 45.2 43.91 31.82 43.56 39.19 28.72 23.02 Small Scale[2] 24.94 30.58 20.83 22.19

Total Expenses

Nuclear 18.16 18.26 18.69 18.18 17.98 18.28 19.23 21.16 23.33 20.65 20.39 20.86

Fossil Steam 27.69 23.85 22.59 21.32 23.14 22.44 20.22 20.52 21.45 21.25 21.11 21.8

Hydroelectric[1] 8.86 8.69 7.51 8.65 9.76 7.73 6.77 5.86 5.78 5.95 5.89 7.43

Gas Turbine and 58.85 50.1 48.93 36.93 50.04 47.26 38.68 30.3 Small Scale[2] 32.8 40.64 28.67 32.16

[1] Conventional hydro and pumped storage. [2] Gas turbine, internal combustion, photovoltaic, and wind plants. Notes: Expenses are average expenses weighted by net generation. A mill is a monetary cost and billing unit equal to 1/1000 of the U.S. dollar (equivalent to 1/10 of one cent). Totals may not equal sum of components because of independent rounding. Source: Federal Energy Regulatory Commission, FERC Form 1, "Annual Report of Major Electric Utilities, Licensees and Others."

Unlike Hunt, U.S. IOUs read, understand and appreciate the contents of the Electric Power Annual. Perhaps something other than subsidies leads to their new interest in nuclear generating stations.

Again: ignoring capital costs for electricity generation is like ignoring your loan payments when calculating the total costs of your car. They form the lion's share of most generation.

What about this concept do you find so hard to grasp?

A growing share of world uranium supplies are obtained on the spot market, so this huge run up in uranium costs will soon be reflected in "production costs" for nuclear power.

And before you say "but uranium costs are a small portion of total costs for nuclear power," look at the data you just supplied from EIA and you will see that fuel costs constitute about 25% of total production costs, which constitute about 25% of total retail costs. So when fuel costs on the spot market are fully reflected in total costs, we can expect this 6.25% share to rise radically.

Re:"...this huge run up in uranium costs will soon be reflected in "production costs" for nuclear power..." Odd isn't it that Hunt's skyrocket hasn't taken off in the "... last five years...". From $0.00495/kW-hr in 2000 to $0.00454/kW-hr in 2005 seems to indicate the flight of what we might call the Kammen-Hunt retrorocket. Hunt's theatrics remind one of the "Coming Soon!" banner run before the previews in movie houses years ago. Maybe the 2007 Table 8.2 of meaningless average operating expenses will support Hunt's radical fuel cost rise. One wonders if such an event would remain so absolutely inconsequential to our budding electric power Nostradamus.

However, the fuel assembly cost is not the uranium ore cost. The cost of ore is only a small fraction of the cost of assemblies. The assembly cost includes a host of subsequent, value-added processes (mostly labor), including processing ore into yellowcake (and then UF6), uranium enrichment, processing the enriched material into sintered, ceramic fuel pellets, and finally fuel assembly fabrication. These additional processes account for most of the cost of a fuel assembly. The cost of these processes has not gone up. These processes are also completely domestic, BTW. Anyway, the cost of raw uranium ore (which has indeed gone up quite a bit recently) is a much smaller fraction of nuclear’s overall cost, ~2% at most (not 25%). I believe the ore cost, even at today’s prices amounts to ~0.2 cents/kW-hr (used to be less than 0.1). One final note, there are things that they can due to ameliorate this effect, such as squeezing more uranium out of existing depleted uranium tails, running fuel to higher burnup levels, etc..

For all these reasons, the increased cost of raw ore will not significantly impact nuclear’s economics. And as Len said, this is a temporary effect, and the ore cost will eventually come down.

I don’t disagree with anything you say. I know that determining the external costs will be difficult, and will be heavily disputed. But this scientific argument is the very argument that we have to have. And at least it will be argued in the scientific arena, where it should be, and less in the political arena. Although it’s difficult to resolve these issues, the fact is that we simply must, or at least we must try to as best we can. After all, if we can’t quantify these external costs (i.e., the degree of damage to public health and the environment, along with indirect economic costs), then what is our basis for intelligently forming any environmental policy? This is true regardless of whether we use a pollution tax (i.e., applied external cost) approach, the traditional regulation approach, or any other. If we can’t quantify the level of harm caused by pollution, what is our basis even for setting traditional regulatory limits on emissions? The answer is that, in the absence of scientifically establishing these levels of harm, these decisions have been made largely politically (with the associated influence of money and lobbying, of course).

We need to have the scientific argument right up front, with the understanding that some value for the external costs (per ton of various emitted pollutants) will be established. These values are subject to change, from new scientific data. Heck, although ideally this should be purely based on science, I would even be able to accept that this would be a political platform, i.e., raising or lowering the current established value for various external costs. At least this approach is very clear about what the disagreement is about (i.e., how much harm is being caused by pollutant X).

The beauty of the pollution tax (i.e., applied external cost) approach is that you don’t have to concern yourself with a host of issues that are repeatedly raised in traditional pollution regulation policy debates. These include whether it is practical to reduce the emissions, how much it would cost, and how quickly it can be done. That’s correct. With a pollution tax/disincentive approach, none of these issues are at all relevant, and nobody has to figure out the answers to any of those questions. Another question that need not be answered is what the potential of various alternatives are, and whether or not they will be successful. That can be left to the market. The only questions that need be answered are what the degree of harm is from releasing one ton of pollutant X (i.e., the purely scientific questions discussed above). A corresponding financial penalty for emitting that ton is then simply applied. That is the extent of the policy.

Under this approach, industry will have a constant, financial incentive to reduce these pollutants as much as they can, with the incentive being directly proportional to the level of harm. This is very important. Under the traditional approach, industry argues (rightly or wrongly) that reducing emissions a certain amount will be impractical, too expensive, or take too long, etc.. The result is an easier requirement, with no incentive to do better once it’s met.

As a stark example, let’s say that coal plants have ~5 cents/kW-hr of external cost from pollution, and that there is no technical way to improve that. Under the traditional approach, industry argues that there is no way to clean coal up, so a reduced emissions goal is impractical. As a result, stricter requirements are not instituted. As there are no new requirements, there are no extra costs for coal plants (not 5 cents, not 0.1 cents). Then it’s time to build the next power plant. Let’s say that a clean power plant (pick your type) costs ~0.5 cents/kW-hr more than a coal plant (but avoids 5 cents in pollution costs). Which type of plant does the utility choose? The coal plant of course. After all, it’s 0.5 cents “cheaper”.

This situation simply MUST change. There must be a constant financial disincentive to emit pollution, with no lower threshold

BTW, I also share your thoughts about conservation. There are two types, which I call "efficiency" conservation and "austerity" conservation. Efficiency conservation is simply good sense (subject to economic analysis), and should be encouraged to the maximum externt practical. Austerity conservation is rarely called for, the only example being a urgent temporary situation, such as when blackouts threaten. People would find it difficult to stay in an austerity mode over any significant length of time.

If we push austerity conservation as a solution to our energy problems, result will be making the whole notion of conservation (including efficiency) unpopular. Given all the efficiency techologies that are out there, as well as clean, abundant alterantive energy sources, asking people to make significant lifestyle changes is simply not necessary.

As I stated earlier, with uranium costs rising 1200% in the last six years, the spot market cost of uranium will soon be reflected in the fuel costs for nuclear and we will see a sharp increasein the "production costs" of nuclear power.

Here's the bottomline: every serious observer recognizes that nuclear power is very expensive. The serious observers who still support nuclear power argue, with some credibility, that nuclear power is still a worthy power source b/c it is baseload and has less greenhouse gas emissions than coal.

In fact, the greenhouse gas emissions from the nuclear lifecycle are about 40% of those from a modern natural gas plant on a lifecycle basis. As we run out of high grade ore, nuclear emissions will rise to about 100% of a natural gas plant's emissions.

So if nuclear power is so expensive, has far higher GHG emissions than renewables and energy efficiency, is highly attractive to terrorists, and has serious waste disposal problems, why would rational policymakers support nuclear instead of baseload renewables like geothermal, biomass, hydroelectric and backed-up solar power?

(QUOTE) The most recent driver of the uranium price stems from misfortune at the world’s largest producer, Cameco, a Canadian company. Cameco’s unfinished Cigar Lake mine, which was expected to come into production next year, and produce up to 10% of the world’s uranium supply was flooded last month, delaying production by at least a year. This set the prices of uranium and competitors’ shares soaring. (END QUOTE)

(QUOTE)Froneman says growing concern about global warming, which is thought to be caused partly by burning fossil fuels such as coal, will result in increased uranium demand. He reckons governments are starting to realise that there is no commercially viable alternative to fossil fuels other than uranium. “I think very little of this environmental impact has really come into the demand side [of uranium] yet,” argues Froneman.

China has plans to build several new nuclear power plants, and Froneman is excited about a deal struck between the Indian and US governments for the latter to supply the former with enriched uranium.

Another factor counting in favour of the uranium story is that its price is only 3-5% of the total cost of producing electricity from nuclear sources, says Froneman. Thus, even a large increase in the uranium price has a relatively small effect on governments’ decisions to go nuclear.(END QUOTE)

(FURTHER) Asked how SXR will respond to a uranium price decrease, Froneman responds. “We certainly have some of the lower-cost projects in the world at $14.50 per pound and at $60 a pound; that’s giving us $45 a pound of margin. So we can stomach a big change, not that I think it’s coming. We’re going to have healthy margins.” (END)

This man has got the formula! Maybe he was sitting - incognito - in my finance classes when I was teaching or trying to teach amateurs how to run with and impress so-called 'masters of the universe'.

That last thought is frightening. Our "serious", "rational" influencer of policymakers did get one thing almost right in his latest workouts. The industry and the USNRC do have some serious problems with waste storage. The problems are not quite the ones Hunt would have you believe. They are more like the "informed" action of the ninth circuit court of appeals holding up the construction of on-site storage facilities at Diablo Canyon. You see, the strategy in CA has been to "influence" state legislators to pass a moratorium banning any new nukes until a federal spent-fuel repository opens, delay that opening by all possible legal means and then apply similar legal means to operating nukes. As pointed out by an earlier commenter, the Hunts, Kammens and the like need a variety of ways to justify an end or a "LCOE". Dealing with plant life extensions and combined construction and operating licenses may finally be too much for them, but don't place any bets. Tort reform might help.

One way to mitigate much of the spent fuel storage issue is to abandon the Carter policy against nuclear fuel reprocessing. Whatever sense this policy may have made thirty years ago, it makes no sense now. This is particularly true if the world is going to move in the direction of reduced CO2 emissions. There is enormous potential residual energy value in all of those fuel rods.

I plan to watch with great interest as the following plays out: "We project 1,000 MW of wind power could be built in our county (onshore and offshore) by 2020, providing about eighty percent of our electricity demand in 2020 under a “business as usual” scenario." The image of 200 to 400 multi-mw wind turbines off Santa Barbara is just too rich.

You make some very good points. "I worship the quicksand you walk on."

You favor a scientific determinatiion of emissions costs, which is commendable but makes the problem far more difficult because it requires that the answer be based on facts and logic. The political approach is far simpler because it requires neither; and, other than tax revenues, it need not necessarily produce results, because its intentions were good. (Note both how the CO2 Cap and Trade (Sorry, Fred.) mechanism was set in the EU; and, how well it has worked.)

The control cost method of setting emissions costs is far more straightforward than the damage cost method. However, for CO2 (today) there is no approved control method except elimination; sequestration and permanent fixation are still subjects of debate. So then, how do we approach a factual determination of the damage costs of CO2 emissions? Do we net out the benefits of increased CO2 concentrations to many plant species? If I operate an "X" megawatt coal generating station which produces "Y" tons of CO2 emissions per year, can I purchase "Z" acres of land and grow corn or switch grass for ethanol production and take credit for the CO2 converted by the crops? If so, does the resulting ethanol get taxed because its use as a motor fuel is no longer carbon-neutral? When assessing the damage caused by my CO2 emissions, do I include just damages in the US, or are worldwide damages taken into account? How does the damage caused by a 1F warming (if a FACT) differ in Minnesota relative to Arizona?

I would suggest that, no matter how fervently you believe in a scientific solution to the environmental externalities cost issue, it is highly unlikely to happen in my lifetime. (What is more likely to occur is a "urination competition".) I would also suggest that, if China proceeds with its plans to build one large scale coal-fired generator per week through 2050, any effort we make here to reduce our CO2 emissions will ultimately cause them to increase theirs.

I believe that, so far, the US and the world are guilty of "beginning vast programs with half-vast ideas". Kyoto fits the description, as does the response of many of the signers of the Accords. McCain/Lieberman ("Kyoto Lite") fits as well. To my mind, the greatest failure in the process is the failure to be honest about the ultimate goal, the timeline to achieve it and the changes which would be required to get there. The general population of the US and the world are currently being subjected to the "mushroom treatment" on a grand scale!

I believe there is at least one approach available to the US which would result in both energy independence and dramatic reductions (~95%) in CO2 emissions that could be accomplished by 2050 with commercially available technology, potentially augmented by new technology which becomes commercial after the process begins. I seriously doubt that the political will to pursue this approach exists in the US today, though I suspect the political will to see us pursue it exists generally outside the US.

Ed Reid

Your last two comments appeal immensely to this warped sense of humor. Knew there was a reason Momma warned me not to compete with those furry, black little critters with white stripes and to avoid those who'd keep me in the dark. That emminent nuclear engineer, Jimmy Who?, did a real number on the industry during his tenure. Caused, as best this memory recalls, the Allied-Gulf reprocessing facility at Barnwell, SC to be sold to Uncle Sam for $1.

Don

That has much to do with their source.

Ed

You stop breathing first, just to set a good example, then I'll stop. :-)))))

It just goes to prove that, if you set the caps high enough, there is very little trading necessary; and, virtually no real reductions in total CO2 emissions, so the trading price is very low once the market begins to work effectively. The modern day liberal argument here is that their intentions were good; and, therefore, they cannot be criticized for the failure of their efforts to accomplish anything of value.

"...because that scam can (ceteris paribus) only increase the movement of energy intensive industry out of Sweden."

"I would also suggest that, if China proceeds with its plans to build one large scale coal-fired generator per week through 2050, any effort we make here to reduce our CO2 emissions will ultimately cause them to increase theirs." (From response to Mr. Hopf above.)

"We must all hang together, or we shall surely hang separately." - except for those who don't have to do anything.

The AGW "acclaimers" appear to be in "full blown" stage 1, while already trying to silence the AGW "deniers" who are in stage 2 and deflect attention from the progressive impact of emerging reality on their most dire predictions. It would appear that some of the political elite may already have proceeded to stage 3, because the "house of cards" is beginning to teeter just a bit, as evidenced by their attempts to assist the "acclaimers" in silencing the "deniers" before more doubt is spread. I do not yet see any signs of stage 4 anywhere, with the possible exception of "The Case of the Disappearing Hockey Stick". The real ugliness doesn't start until stage 5. Stage 6 is just a disgusting CYA ploy, which is of no interest to anyone but those with exposed asses.

It was not intended to be funny; it was deadly serious commentary, stated with humor. My motivation is pure skepticism, triggered by the actions of the "acclaimers" and their political activist supporters. I believe we are being given the mushroom treatment on a grand scale. I believe the Kyoto Accords were ill conceived from the start. I am convinced that the US-led six party technology sharing agreement has far greater potential to have a meaningful effect, because it offers the potential to apply BACT in the developing countries to minimize the adverse effects of their expected rapid growth. I know that Kyoto is only step one; I am furious that the "acclaimers" refuse to be honest about the rest of the process they envision and the timeline they believe is necessary. I am equally furious that our legislators are not calling them out for refusing to do so.

As I am sure you are aware, it is not possible to prove a negative, so there cannot be "certain knowledge that the effects are harmless". You are welcome to your concerns, however; and, your "no regrets" approach to dealing with them.. I believe I am still free not to share them. I choose not to do so.

If you want to contemplate "a very stupid experiment", contemplate the Chinese building and commissioning one new large scale coal plant a week between now and 2050 with old technology, unhampered by the Kyoto Accords. If AGW is a disaster in the making, it would appear that China has the potential to push spaceship earth past the tipping point and make the disaster inevitable, while we worry about: compact fluorescent lamps, the energy efficiency and carbon neutrality of ethanol production and use; the permanency of CO2 fixation technologies; and, the real cost and potential contribution of wind power.

Ed

--- G. R. L. Cowan, former hydrogen fan
Oxygen expands around B fire, car goes

The hockey stick renders two historical events of some significance "non-events"; and, there seems to be unusual interest among some in the community to keep it that way.

Just general comments on the article and on what some have stated or implied.

I also live in California, in Pacifica to be exact. I also believe that on this forum I'm the only one who works in power production...please correct me if I'm wrong. I'm a power plant control operator in San Francisco at a conventionally fired NG fuel 200 MW plant. A baby comared to the some of the big plants out there.

I was also "on the board" during late Great, Californial Energy Crisis. Yes, dereguation sucks, "even where it works", as oversight goes out the window and everything is driven by "profit". When we worked for PG&E, we were supposed to care about grid conditions (frequence, voltage, etc). Now, we are told we don't care, all care about is wattage out. It sucks, and it still sucks. Enough fo politics.

A few thougths. I hear 7.5 cents a kW/hr...I hear more, I hear less. Right now, PG&E charges you at your home 11 cents a kW/hr! And, if you go over 200 kW/hrs per month, you are then charged at 14 cents a Kw/hr! That's a $114/MW hour to put int in realistic terms. Rignt now at this time and date, PG&E is buying/selling whole sale power at $42/MWhr. Everyone should think about these numbers.

With O&M, fuel and paying off the almost paid off Diablo Canyon Nuclear Power (refinanced to much lower interest rates several times), it is PG&E's most profitable energy source. Of course those market numbers subtracted from the cost to homeowners is where the profit is made regardless folks of the cost of the power..and ALL sources of power for PG&E eternally come in right now at 4 cents a kWhr, internally they come in lower than that! Geothermal, which is slowly dying and loosing it's steam pack, produces about 1/2 of what it did 20 years ago when I went to work at PG&E. Hydro is virtually free, coming in at about a cent. The point is that the market is deciding and none of the operators at Diablo or San Onifre have anything to worry about in terms of their still cheap at-unsubsididzed prices.

Wind. Gawwwddd. I'm all for wind. Love it. I sail. I love the windmills over near Livermore. Wouldn't want live anywhere near them but they make power. They are old and shouldn't be used for comparison for the folks in Santa Barbara. But you have to calculate at least 1 MW of fossil/nuclear/hydro ondemand for EVERY watt of wind. Everyone but people now in the know, understand this. Can't run a grid on wind, so why even propose it? Ah...politics, or course. I willing to state that we should give current wind farms a chance over the next few years to prove themselves. I don't think they have. I don't think all that nice salt air in the North Sea has quite done it's work yet, we shall see. It's good to know that not one MW of wind could exist in Germany or Holland without all the clean, cheap nuclear power supporting the European grid from France...or that nice wet lignite they brun by the ton every hour in Germany. I choose nuclear over coal, its the ONLY choice and the folks in Santa Barbara ought to consider this, instead of those windmills off the coast that are never going to be built.

David Walters San Francisco, CA

Judging from the response to an innocent question about the effects of Coronal Mass Expulsion (CME, for tradition's sake) and the cavalier treatment of Boron (a moderator if there ever was one) there, the Real Climate forum seems more polarized than we are here. Didn't think that was possible.

--- G. R. L. Cowan, former hydrogen fan
Oxygen expands around B fire, car goes

OK, I’ll do the math myself. The current price of $85 per pound U3O8 corresponds to ~$100 per pound of pure uranium metal. This metal is then enriched to ~5% 235U. It takes ~9.6 lb. of uranium metal to make one lb. of 5%-enriched uranium metal (leaving 8.6 lb. of depleted uranium “tails”, which contains 235U at a concentration of 0.2%). Thus, it takes 21,120 lbs. of raw (natural) uranium metal to make one metric ton (2200 lbs.) of 5%-enriched uranium metal (2200 x 9.6 = 21,120). Since the raw uranium metal costs $100/lb., the cost of one metric ton (or “MTU”) of 5%-enriched uranium metal is 2.112 million dollars. Nuclear fuel with an initial 235U enrichment can reach a “burnup level” of 60,000 MW-days per MTU. That is the thermal energy released per metric ton of initial enriched uranium. Assuming 33% efficiency, this one ton of uranium produces 20,000 MW-days of electricity, or 480 million kW-hrs. Dividing the 2.112 million dollar ore cost by the electricity production of 480 million kW-hrs yields a uranium ore cost of 0.44 cents/kW-hr.

To corroborate the above analysis, I looked up the annual uranium usage and saw it was 67,000 tons. This powers 440 reactors with an overall capacity of ~400 GW. With capacity factor, this corresponds to average power output of ~360 GW, or annual generation of ~3.2 trillion kW-hrs. 67,000 tons equals 147 million pounds (of uranium metal), which costs 14.7 billion dollars at $100/lb. Dividing 14.7 billion dollars by 3.2 trillion kW-hrs yields ~0.46 cents/kW-hr. Both methods agree. Lets call it 0.45 cents/kW-hr.

So, the cost of nuclear electricity will go up by ~1/4 cent/kW-hr due to the recent run up in ore cost, assuming its all bought on the spot market (vs. a more typical price of ~$38/lb. U3O8). It may be as much as ~1/3 cent versus the (temporary) all time low ore cost seen around the year 2000. The bottom line is that even with this recent run up, nuclear’s power costs have been much less affected by fuel (ore) cost increases than have any of the other sources (i.e., coal and gas). Thus, nuclear is more competitive than it ever was. Even with this extra ~1/4 cent cost, existing nuclear plants still have the lowest operating costs, so this has no impact on their staying open. By the time new plants come into operation (~2015), new mines will be online, and ore costs will have already come down. A cost increment of ~1/4 cent wouldn’t significantly affect any decision anyway.

There is a difference between the uranium situation and the oil & gas situation. Oil and gas prices are rising (and will stay high) because we are literally running out of these resources, and our ability to produce is falling short of demand. No major discoveries have been made in decades. Uranium prices are (temporarily) high because we don’t currently have enough mines in operation. We just need to open more, that’s all. Anyone concerned about running out of iron, aluminum, copper or any other metal. You shouldn’t be. Uranium’s situation is no different from other metals. More on this at:

http://216.94.150.122/investor_relations/speeches/speech_text.php?spid=49

and

http://www.americanenergyindependence.com/uranium.html

No, its net emissions are not 40% those of a gas plant!! Nuclear’s net emissions are ~2% of coal’s and ~5% that of gas. It’s net emissions are equal to or lower than most renewables.

http://www.iaea.org/Publications/Magazines/Bulletin/Bull422/article4.pdf

And no, we don’t have to worry about running out of high grade ore for the foreseeable future, as the 2nd link in my previous post discusses. We’ll be breeding (or have moved on to other sources) long before that happens.

Few even take the Leeuwen-Smith study (concerning nuclear’s net emissions) seriously, let alone agree with it. This is a classic example of why I’m tiring of the competing studies game, Ed. If we simply had a policy of taxing all carbon bearing fuels the moment they come out of the ground, we wouldn’t have any need for all these studies trying to estimate how much CO2 is indirectly emitted by nuclear or any other source. Under that system, if nuclear had significant net emissions, we would find out right away, as we would see nuclear’s price go up.

Of note is that fact that it is folks like me who are willing to let fair competition decide these issues (e.g., the most cost effective way to reduce CO2 emissions), and are willing to abide by the result. On the other hand, it seems that Tam and other environmental “purists” prefer the more traditional approach, where our energy future is decided politically, by fiat (with established “plans” for how we are going to generate our power), as opposed to letting the market decide the best approach. They’re confident (perhaps justifiably) that they can trot out BS studies like Leeuwen-Smith and convince politicians to enforce their vision of the future, based on that “data”. They talk about being willing to engage in fair competition, and how renewables are competitive, etc.., but their actions to not match their words. Instead, they go about trying to actively interfere with nuclear development wherever possible, and pushing renewable portfolio standards which literally force utilities to use renewables. I’ll ask again, if they’re so competitive, why do we need such laws?

For starters, I clearly recall all the reports put out by the IPCC (whatever you may think of the organization) stated that compliance costs would be a fraction of 1% of GNP for most or all developed nations. A quick search did not find any IPCC reports, but below is a link to a US Energy Information Administration study (a source that, if anything, would be biased in the other direction). It apparently also found the annual costs of limiting/reducing emissions would be ~1% of GNP, or less, for all but a few of the studied scenarios. And these costs are not permanent, they only apply over a finite number of years and then go away.

http://www.eia.doe.gov/oiaf/kyoto3/execsummary.html#economy

After hearing of the IPCC study results, I did a quick analysis of my own. To be very brief, even if you assume that nuclear costs 2 cents/kW-hr more than the coal that would otherwise be used (a high estimate of the price difference), we’re talking about increasing the cost by ~2 cents for ~50% of our power, resulting in a 1 cent increase in the average cost. Given that we use ~4 trillion kW-hrs per year, this translates into an annual cost of ~$40 billion, which is less than 0.5% GNP. Of course, if the coal/nuclear price difference is more like 1 cent (which it is), the compliance cost will be half that. And if there are other viable non/low-fossil sources that are less expensive than nuclear (as Tam suggests) then the cost will be even lower. And this net cost does not even include other benefits (economic and non-economic) of moving away from fossil sources such as reducing air pollution and foreign energy dependence.

Simply replacing coal would lower US emissions by 1/3. Estimating the cost of reducing emissions from the other major sector (transport) is a little more involved. It will likely involve spending a few thousand more dollars for a plug-in hybrid or electric car. Part of this cost is offset, however, by the fact that the effective fuel cost will be significantly cheaper, even if the power comes from new non-fossil sources of capacity.

I admit that the one weakness in my analysis is that it ignores the time element. In other words, it evaluates the costs of not building any new coal plants (and building non-fossil plants instead). It doesn’t consider the cost of retiring coal plants prematurely. If we had a crash program where all coal plants were replaced with non-fossil plants as soon as possible, it would likely roughly double the overall cost.

CANDU reactors have cool heavy water for bulk moderation, hot heavy water in the fuel channels for cooling. Because in the latter circuit it is kept liquid, it is limited to about 300 Celsius. I don't think it would be too much of a change to have supercritical heavy water there, or liquid lead if one is prepared to deal with freezing. The moderator would still have the coolness that is necessary if unenriched uranium is to burn (and this is a big logistical advantage if many hundreds of GW of coal plant are to be converted, because it can then happen without waiting for U enrichment plants to get built).

Either the hot D2O(g) or hot nitrogen that has been heated by the lead then goes to the formerly coal-fired steam generators. Much less trouble than coal, and it takes advantage of turbines and grid connections that already exist.

The Kyoto reductions are merely the downpayment; the issue is the balance to be paid later. The Phase 1 reductions would certainly be cheaper and easier than the following phases. Replacing all fossil fuels, for all applications, with "zero net CO2 emissions" alternatives, as it appears would be required to stabilize CO2 concentrations at ~ 500 ppm, would have a far greater impact. Assuming that the reductions would be required by 2050, as has been suggested, would require massive incremental capital investment, by both suppliers and end users, at least through 2050. This is possible with current commercially available technology, but at a very substantial cost.

I have not yet heard anyone chanting: "Kyoto 1 and then we're done!"

How did the Fukishima Straits get into this? Thought Ed G. in comment #290 was, as the youngsters say, "dissing" Boron as a propellant. Wrong. He was really after one S. Reynolds, author of comment #278, not "Burn boron in pure O2 for car power", the author of comment #279. Coal - car coupling makes perfect sense. Who wants a runaway load of coal?

Don

At one time Helium at 1427 degrees F and ThC2/UC2 at 4.25:1 did a pretty good job too. Made 2500 psig/ 1000 degree F superheated steam and 600 psig/ 1002 degree F reheat steam for a turbine designed for fossil-fired superheat with reheat steam cycles. Understand that particular turbine is still in use, but NG creates the steam cycle.

Don

The gold standard in terms of judging the costs of climate change mitigation is the Stern Review (which is not a UN IPCC document as James suggests), commissioned by the UK Treasury last year. You can find it online easily.

It found that mitigating the worst effects of climate change (i.e., keeping CO2 to 450 PPM or lower) would cost about 1% of global GDP through this century. Before you gag, the review also found that climate change impacts, left unmitigated, would probably cause a 5 to 20 percent loss in GDP on an annual basis. If you believe the methodology is sound, you can't help but conclude that mitigating climate change is the way to go.

Closer to home, a number of rigorous reports looking at CA have found that meeting the 2020 goal of returning to 1990 emissions levels will probably result in a net gain to California - $78 billion by a UC Berkeley study by Roland Holst.

So we really should be (accurately) plugging climate mitigation as a cost-savings issue, not a cost-negative issue.

As shown in the following article:

http://www.energycentral.com/centers/news/daily/article.cfm?aid=7943905

all sorts of energy projects (almost everyone) gets loan guarantees from the federal government. While the loan guarantees are the most significant part of the nuclear incentives in the Energy Policy Act, they are nothing special or unique.

The other primary incentive, the production tax credit, is merely the same 1.8 cents/kW-hr that wind has always gotten, except that in nuclear's case, the PTC only applies for the first 8 GW of plants, and only for a few years.

And of course, this is nothing compared to what solar gets, as shown in this second article:

http://www.energycentral.com/centers/news/daily/article.cfm?aid=7947306

It gets a ~30% subsidy. Based on the full cost of ~24 cents/kW-hr (for PV), this amounts to a per kW-hr subsidy of ~8 cents/kW-hr!!

As I said before, nuclear is one of the least subsidized energy sources. With the Energy Act of 2005, it went from getting almost no subsidies at all to getting subsidies that are merely in line with most other sources. And this only refers to direct subsidies, and does not consider the vastly larger subsidy fossil fuels get by being allowed to pollute the environment for free (a subsidy that most studies show is worth over 5 cents/kW-hr for coal, enough to render it completely non-competative if it were ever applied).

And incidentally, I'm a guy who still believes that mitigating or trying-to-mitigate the effects of climate warming or supposed climate warming makes economic sense, assuming that they do it my way.

You say nuclear 'only' gets a subsidy on the first 8 GW of plants and only for a limited time. Comparing that to your cited worst offender, PV, and for the 8 years they hope to extend it out to, you're comparing 8 GW * 3 years vs. 1 to 1.5 GW * 8 years. Only the new solar installed under this new PTC (or the 30% tax credit) qualifies for it, so it's actually more like 0.5 GW * 8 years. Those seem pretty equal if not slanted toward nuclear.

I'm curious of how much subsidy did the second GW of nuclear get?

Keep in mind that non-government run solar thermal (the single most viable and near term renewable) qualifies for exactly no subsidies OR loan guarantees.

Moreover, $13 billion in the 2005 EPAct goes to 8 GW of nuclear, which amounts to $1.625 billion per GW. This in fact the projected capital cost for new nuclear from the 2003 MIT study. I think those capital cost projects are very optimistic, as revealed by the huge run-ups in actual costs for just about every nuclear power plant every built (as one factoid: the decommissioning costs alone for the 1 GW San Onofre 1 reactor are currently estimated by SCE to be $504 million (with over $350 already spent as of 2005)).

However, at even 50% of the capital cost of a nuclear plant, surely you agree this is an exorbitant subsidy?

Do you think Olkiluoto is still a good model for new plants elsewhere in the EU and the world?

"Huge cost over-runs and delays". They want those, don't they? In this part of the world they are completely unnecessary if they were not desired. It's like the mathematics deficiencies that are showing up among many students at Swedish universities. These could easily be cured in a month or two, and if they arn't cured it's because somebody or a lot of somebodies prefer things that way. Take my word on this matter.

And incidentally, I am NOT nuclear power's #1 fan. Just a great economics and finance teach doing - in the Irving Berlin sense - what comes naturally.

--- G. R. L. Cowan, former hydrogen fan
Oxygen expands around B fire, car goes

Disinformation? Gosh, all I did was give links to some articles. Read them and draw your own conclusions.

The 8 million is basically just the administrative cost. With loan guarantees, the cost is basically nothing until and unless there is a loan default. The govt. is accepting some of the risk, not paying out a direct cost. Calculating the effective equivalent subsidy from a loan guarantee is complicated, and a function of many variables (such as the risk of default). The effective cost, or subsidy, is generally a small fraction of the loan amount. Thus, it would be a small fraction of 9 billion (a cost that would not be paid for some time, only if and when there is a default).

Based on what you're saying, the solar subsidy covers a smaller amount of potential generation, vs. nuclear. This is probably simply because the amount of expected generation is that much smaller. Given that the magnitude of the subsidy, in cent/kW-hr, is much larger for solar, I'd say that the program more heavily favors solar, but that's just me.

I'm not sure I understand your question about the "2nd nuclear GW". Nuclear hasn't received any benefits yet, as construction hasn't started. Once again, nuclear is supposed to get loan guarantees for the first 8 GW (if they actually fund these legislated promises, let's hope the war ends soon).

Also, I'd be very surprised if solar thermal isn't getting a loan guarantee. The text of the 2005 Energy Act states that any source of power that would reduce CO2 or help with energy independence is eligible for the loan guarantees. Solar thermal clearly qualifies. I'm less certain if it gets a PTC, but would be surprised if it didn't (if not something even better). Solar PV assuredly does get something much better (govt. paying a large fraction of a very large up front cost).

In my link above, I discuss the loan guarantees, and their real cost (or effective subsidy) versus the total value of the guaranteed loan. Is the $13 billion you're quoting the overall loan guarantee value? I did the math myself on a PTC of 1.8 cents/kW-hr for six years of 8 GW of nuclear generation, and came up with a total subsidy of ~1 billion.

That leaves 12 billion that must be the loan guarantee. This is roughly equal to the quoted construction costs for the 8 GW of nukes. It makes perfect sense that the construction loan the utilities would be seeking would be most of the overall cost. So, it seems clear that the quoted $12 billion is the overall loan value. The effective subsidy is a small fraction of that (perhaps ~10%) under standard accounting techniques. I've heard effective subsidy estimates for these loan guarantees of less than 1 billion. Thus, it is not correct to treat the $13 billion as a direct subsidy.

And one more thing, even if $13 billion went to nuclear, it remains true that the subsidies for fossil fuels are even larger (the energy sources that we are supposedly trying to move away from).

As for cost overruns, we will defintely do better this time around, for a myriad of reasons. And most of the plants recently build in the Far East over the last 10-15 years have been built on budget and on schedule. Any overruns that occur will be much smaller this time around, including in Finland (which is a first of a kind plant, BTW).

Concerning decommissioning, this is not a subsidy as the utilities are required, by law, to set aside sufficient funds to cover the full cost. Due to the power of long term interest, this only requires ~0.25 cents/kW-hr to be set aside. WIth 40 years of operation (let alone the 60 that will be seen for all plants still in operation today), 0.25 cents is enough to create a fund of ~$500 million or more for plant decommissioning, when the time comes.

Under the 2005 law, new nuclear gets a PTC that is equal to that for wind, and for nuclear, it's temporary and limited in scope. New nukes also get the same loan guarantees that virtually every energy source other than conventional coal and gas plants get (as shown in the linked article). There is no basis for arguing that nuclear is significantly more subsidized than other sources. It's treated about the same.

fossil fuels are .. the energy sources that we are supposedly trying to move away from ...

My 'second GW' of nuclear comment was referring to the subsidies given to nuclear once a whole GW was in place half a century ago. I would guess it was more actual dollars than the second GW of PV is planned to get. I could be wrong though.

Regarding the calculation of the subsidies, I don't know which to use. It just seems to me that the money allocated to one or the other should be the standard. I say this because the risks involved are vastly different from a bank's standard. Nuclear is a mature technology and only has regulations and subsidies to consider. PV has yet to prove it's technical viability to the majority of people. Any loan guarantee only takes a percentage of the risk and the bank still has to carry the rest. My experience has been that they still turn down many projects for this reason. It's really hard to convince a 'businessman' to go against what he's read everywhere else when there's so much conflicting opinions out there.

This segways right into the solar thermal projects. It's not that they don't qualify for the subsidies, but the logistics are roadblocking it. The only solar thermal projects out there are all partnered with the DOE or NREL, et. al.. and I don't know the economics of those deals. For any private group trying to enter the market, there's a little phrase that says the subsidies are only for commercially available systems. So the developers can only get subsidies (or grants or loans) for R&D work. However, between licensing rights clauses, bonding and cost share requirements, etc., those don't work out either. This is WHY the only projects going in are government controlled. It's one step away from a scam in my opinion. The US even 'bought into' other countries' projects and, in the case of Spain, justified a delay in the project of around 5 years.

This leaves only the private sector to fund these type of R&D projects and how do their research of whether it's a good investment or not? Since the big players like the SEGS and the other NREL systems don't publish their finances, they look to others and there are none. ...yet.

If you know of any sane way to raise capital for such a project, I'm all ears.

http://www.citizen.org/documents/JTF-Cost.pdf

$5.7 billion is for the production tax credit for the first 6 GW, and lasts for 8 years.

$6 billion is in the form of loan guarantees.

Also, historically, nuclear power has received by far the highest R&D subsidies from the US government - far higher even on a per GWh basis for actual generation.

The PTC value of $5.7 billion checks out, based on a credit of 1.8 cents/kW-hr (I erred above). But again, this is simply the same amount wind gets on a quasi-permanent basis. I suppose the problem is that nuclear just generates such a large amount of domestic, emission-free power! Hence the large absolute value. And fossil fuels (which are much less desireable) still got more.

At present, nuclear's R&D "subsidy" amounts to only ~0.1 cents/kW-hr (the $800 million budget divided by ~800 billion kW-hrs of annual generation). The renewables budget is as large or larger than nuclear's and renewables generate far less power (espeically if hydro, which gets little R&D money, is excluded). Thus, their per kW-hr subsidy is far higher, roughly an order of magnitude. Note, however, that I'm all for increasing the renewables budget. And this is just the federal budget. One should factor in the states, many of which have renewable programs but none of which provide any nuclear R&D funding. CA would be a great example of this.

Even if you look at the total history, the per kW-hr subsidy for nuclear is not that large. Even if you assumed that nuclear's overall historical R&D subsidy was $200 billion (the ballpark of what some have claimed), if you divide the by ~20 trillion kW-hrs that US nuclear plants have produced, you get a "subsidy" of only ~1 cent. It seems, by my analysis, that this is merely roughly equal to the per kW-hr R&D subsidy that renewables are getting right now. If you go back in time, the per kW-hr R&D subsidies were surely much larger, as there was very little generation.

"If you go back in time, the per kW-hr R&D subsidies were surely much larger, as there was very little generation."

I just can't get my head to find the apples on the other side to compare to. You can't compare the 2007 dollars for Nuclear and renewables because nuclear is half a century old and has matured and done giga-tons of 'lessons learned'. You also can't compare the per kwh money of the two because nuclear has decades of use under it's belt. The only fair comparison is to adjust for dollar value and then look at nuclear's first year on both a total dollar and dollar / kwh basis (back in the mid 1900's and compare that straight across with renewables on the same basis today.

Of course this doesn't even address the fact that somehow all the renewables are getting lumped together for their contribution when each one really should be considered separately.

I'm fully ready to go on record with a prediction that solar thermal is at least 2 orders of magnatude lower than either of the ones in this discussion. How is this possible when it's actually generated hundreds of times more electricity of PV to date?