March 2, 2016

TAX WHAT YOU DON'T WANT, NOT WHAT YOU DO:

Why America abandoned nuclear power (and what we can learn from South Korea) (Brad Plumer, February 29, 2016, Vox)

Nuclear construction costs in the US did spiral out of control, especially after the Three Mile Island meltdown in 1979. But this wasn't universal. Countries like France, Japan, and Canada kept costs fairly stable during this period. And South Korea actually drove nuclear costs down, at a rate similar to what you see for solar. Studying these countries can offer lessons for how to make nuclear cheaper -- so that it can become a useful clean energy resource around the world.

"The biggest thing we found is that there's nothing intrinsic to nuclear that leads to cost escalations," Lovering told me. "It depends on what policies are in place, on the market dynamics. You get very different cases in different countries."

Here's a look at where America's nuclear industry went awry -- and how France and South Korea avoided those mishaps.

Before we dive into the US story, a note on numbers. The Energy Policy paper focuses on "overnight construction costs" for power plants. This is the price of parts, labor, engineering, and land. It doesn't include fuel, operations, or maintenance, but it's the dominant component of lifetime costs. And it's phrased in terms of dollars per kilowatt, so we can compare plants of different sizes.

For context, the Energy Information Administration calculates overnight construction costs for new US power plants ordered in 2014. Today, an advanced nuclear reactor is estimated to cost $5,366 for every kilowatt of capacity. That means a large 1-gigawatt reactor would cost $5.3 billion to build. By contrast, a new wind farm costs just $1,980 per kilowatt. A new gas plant costs just $912 per kilowatt, or one-fifth as much. Even if you adjust for nuclear's higher capacity factors, that's brutal competition. [...]

South Korea had an advantage in that it didn't start entirely from scratch. The country imported proven US, French, and Canadian designs in the 1970s and learned from other countries' experiences before developing its own domestic reactors in 1989. It developed stable regulations, had a single utility overseeing construction, and built reactors in pairs at single sites.

The results were remarkable: overnight construction costs fell 50 percent between 1971 and 2008 as South Korea built 28 reactors in all.

In fact, the Energy Policy paper notes, the decline in South Korean nuclear power costs is comparable to the decline in solar power costs in Germany over the same time period. (Though solar has kept getting cheaper past 2008.) Analysts have marveled at how solar panel costs come down as companies get better at manufacturing them -- a process known as "learning by doing." South Korea's experience suggests similar reductions are possible for nuclear.



Posted by at March 2, 2016 1:26 PM

  

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