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Oct 24, 2012

Nuclear power costs are going up and up, Minister, not down

Contrary to what radioactive Minister Martin Ferguson might claim, the already high costs of nuclear power are growing higher amid delays and safety concerns.


While Martin Ferguson’s role as chief Labor spruiker of all things radioactive is well known, occasionally his enthusiasm for things that glow in the dark carries him away.

In particular, he appears to have yesterday made an outrageously misleading claim about nuclear power. “The only part of the energy mix not included in Australia at the moment is nuclear, and I must say that is going to reduce in costs over time as we go forward,” The Australian reported him telling a Perth conference.

In 2009 Crikey undertook a detailed examination of the costs of nuclear power overseas and locally, showing that despite a rise in construction of nuclear power stations in countries like China and India, the contribution of nuclear power to global power production was declining as ageing reactors are shut down and multi-year construction delays dog new projects. And capital costs are so great that the technology is considerably more expensive per kilowatt (kW) even than many renewable sources.

Contrary to Ferguson’s optimistic view about falling costs, things have only got worse since then.

In May, a Reuters analyst said “a clear upward trajectory is evident in developed countries” in nuclear power costs driven by increased regulation in the wake of Fukushima, project delays and skill shortages. Even before Fukushima, capital costs for nuclear power construction were rising significantly. And the two European projects Crikey discussed in 2009, in France and Finland, have since seen further delays and cost blow-outs: the company building the Flamanville reactor has estimated its per kW price will be more than double original estimates, and construction is now four years behind schedule.

The Olkiluoto-3 reactor in Finland is now five years behind schedule, rather than three back in 2009, and “massively over-budget”. Delays feed into capital costs, which feed in turn into the rate of return reactor operators must obtain once the reactor finally commences operating … whenever that is.

But construction delays — which mean higher capital and interest costs — plague the industry. According to the World Nuclear Industry Status Report from July, of 59 current nuclear reactor construction projects around the world, 18 are behind schedule by more than a year and of the remainder, none have yet reached projected start-up dates. One US reactor project, already running behind schedule when the nuclear power industry went into a slump following Three Mile Island and then restarted last decade, has been under construction for 39 years and recently saw a further multi-year delay.

Delays, cost overruns and the response to Fukushima have seen the credit ratings of major nuclear power companies downgraded, pushing up borrowing costs. EDF, builder of Flamanville, has been downgraded from AA- to A+ by Standard and Poor’s; TEPCO from AA in 2010 to B+ now, AREVA from A- in 2009 to BBB-; TVO, builder of Olkiluoto-3, was downgraded by Fitch to BBB+. Companies like Siemens that have announced they are exiting the industry have been endorsed by ratings agencies.

And new nuclear projects in the UK have also struggled to attract capital, with investors and partners walking out on consortia.

It’s not just new investment that’s a problem: earlier this month, post-Fukushima stress tests on European reactors identified €25 billion in upgrades and fixes needed to bring existing plants up to acceptable safety levels. Japan isn’t the only country shutting down reactors: two were shut down in Belgium in September due to safety flaws.

About the only cost for nuclear power that’s falling is the price of uranium, which is now at five-year lows as the industry struggles in the wake of events in Japan. But operating costs aren’t the issue for nuclear power: the massive capital costs and associated borrowing charges are the problem, especially when five-year construction schedules almost invariably end up double that, or more.

That’s why nuclear power is only viable, especially in a country like Australia that has no extant industry, construction or operational skill base, via either outright government ownership or massive debt government guarantees, far beyond the level of government support required by renewables.


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55 thoughts on “Nuclear power costs are going up and up, Minister, not down

  1. Liz A

    The most spectacular in my opinion is the Darlington upgrade in Canada: 4 new reactors of the new CANDO variety (meant to be safer and more efficient), at a cost of $10,800 per kW!

    That’s in a market that already has expertise and the plant was at a brownfields site, so additional costs of transmission and infrastructure was minimal.

    Of course, none of those “benefits” exist here in Australia.


  2. Modus Ponens

    Ferguson must have equated the falling price of uranium to mean that the price of using that uranium to make electrons is also falling.

    He is a bit like that. Pity he is applying that intellectual integrity to cabinet discussions.

  3. Mark Duffett

    I hope Bernard’s got a job lined up in a cherry orchard over summer.

    It’s odd to say the least that he fails to refer to the BREE Australian Energy Technology Assessment, released only a few months ago. Presumably he considers it inferior to this update of his own 2009 scholarship. He’d want to have a pretty good rationale for that, though, because figures like bree.gov.au/documents/publications/aeta/2030-LCOE-Summary-Chart.pdf show his nuclear requiring “far beyond the level of government support required by renewables” contention to be utter…um, let’s say ‘overstated’. Not to mention that there are far more issues with renewables than just the cost of building new capacity.

    engineersaustralia.org.au/sites/default/files/he_economics_of_nuclear_power.pdf also gives some much-needed up to date nuance and perspective.

  4. Fauzi Rahman

    Nuclear power fuel is cheap.
    Nuclear power is not.
    The cost of (getting rid of )nuclear waste is exorbitant.


    In Sept. the NY Times did an article about Japan “phasing out” nukes by 2040, including this:

    “In announcing the energy plan, Motohisa Furukawa, the minister of state for national policy, said there was no change to the government’s quest to restart those reactors. And although the long-term plan stipulates that no new reactors will be built, it leaves open the possibility that seven reactors at varying stages of construction could be activated. That decision would be left up to the new nuclear committee headed by Mr. Tanaka. ”

    Sounds like a dead cert, doesn’t it?

    Japan simply cannot afford to turn off nuclear power, as it’s latest fuel import bill shows, so all the ‘debate’ about running costs better be put up against importing and burning hydrocarbons.

    And, lest we forget, not one person has died as a result of the accident at Fukushima, and on current analysis, no one is likely to, but near 20 thousand were killed by the tsunami. You’d hardly think so the way the media love to dramatise it.

    Prediction: We will be buying our small modular thorium reactors from China before Japan is ever nuclear free.

    And if not, the planet will be cooked, because renewables (or ‘unreliables’ if you like) cannot replace the vast coal burning industry the world relies on more and more and more… every single day.

    Take ya pick.

  6. Coaltopia

    Who’s blowing the wind up Fergie’s ass this time?

    Mabye he can visit the Levy County Nuclear Power Plant in Florida and ask them how their projects costs quadrupled from $5 billion to $20 billion.

  7. Microseris

    If proponents of nuclear power can get the new technology generation 4 reactors, with significant safeguards incorporated in the the design, functional then nuclear may have a future in Aust.

    Until then its about as viable as clean coal.


    FT article,show it’s not as simple as a promise in Japan:


  9. michael r james

    MarkD at 2:43 pm

    (Yes, I’m rising to the bait.) Both links rely upon those pretty pictures of Levelized Costs, which magically show that nuclear is one of the lowest costs, and even retrofitting of CCS (carbon capture storage) to existing brown coal plants is cheaper than almost any alternative!

    Other than the opacity of whatever lies behind those magic “levilizers”, this would of course explain why the world is rushing to build CCS. It isn’t just its nuclear plans collapsing due to outrageously optimistic costs (they probably had the same set of economists cooking up the same levelized costs) in the UK but its big plans for CCS have also collapsed. Due to funders withdrawing at the speed of sound. The most significant CCS retrofitted to an actual operating coal-burning plant, Mountaineer in the US, cost north of $100M to capture only 1.5% (20MW equivalent) of the giant 1300MW plant which suggests the cost of CCS for 90% of the plants output would be about $4bn. As I reported here in Crikey back in 2009. At that time the first truly honest assessment of CCS was made by Australia’s GCCSI, and there has hardly been a peep about the subject since–including from Ferguson. Given the low position on that LCOE graph you cited, do you want to explain this anomaly?

    You see Mark, those favourable levelized cost graphs are only intended by industry to persuade government (or other suckers) to greenlight projects. But when industry is forced into actually finding the finance, the brutal truth emerges and they run for the hills.

  10. michael r james

    MarkD at 2:43 pm

    I have a reply in moderation.
    I also laughed when I saw that I mispelled levelizers as levilizers (l’evil-izers!). Freudian.

  11. John Bennetts

    Microseris isn’t even half right.

    Fast nuclear power plants were first constructed about 40 years ago. There are examples of them running satisfactorily for decades, however the program was shut down in America for political, not technical or economic reasons. Other nations followed suit. Thankfully, the past several years have seen a resurgence in construction of these plant.

    Add reprocessing facilities and the result will be extraction of 99+% of the available energy from the uranium fuel, as against the current (Gen III) result of 0.7%.

    The other 98.3% of the fuel which is already stockpiled, along with plutonium and uranium from existing nuclear warheads have potential to provide the world’s energy for hundreds or thousands of years without necessitating any further mining. Not just no new mines, but the existing uranium and coal mines could also be shut down as soon as the Type IV plant are available.

    What’s there not to like about that?

  12. John Bennetts

    I am past being amused to read from certain sources that nuclear is not viable without government subsidy – It is quite capable of competing with other power sources, provided that the cards are not wilfully stacked against them.

    Yet these same folk plead for increased and continuing subsidies for renewables, despite the fact that REC’s, advantageous market entry rules, FiT’s, mandated targets and straight out government donations abound in the renewables sector.

    Folks, this is serious stuff and not a joke. If decarbonisation of our energy supplies is important, then so are all non-carbon dioxide emitting technologies, and that includes nuclear.

    Nuclear power is the ONLY currently feasible renewable, carbon-free energy source which is not dependant upon gas or oil fired generation for at least part of the time.

    It’s time for the drum-beaters to shut up and listen for a change.

  13. Dogs breakfast

    Well indeed. what’s not to like.

    But if you are going nuclear, it needs to be a proper assessment that counts all the costs.

    And in simple economic terms, in political terms, in carbon output terms, nuclear is unviable in Australia.

    Now if we can all agree on just one of those being correct, let’s go for ‘political’, then we can have the real debate.

    Which is, why do we need to debate something that we are never going to do?

    Answer this question – Where are you going to build it?

    Otherwise, this is all just ‘angels on the head of a pin’ type discussion.

    As for cherry picking, well let’s just say that the nuclear industry has been cherry picking for a while, including not counting the cost of clean ups, storing radioactive waste, de-commissioning etc when doing their sums, so it only seems fair.


    Sorry, but “Moderation” is anything but moderate on this site Crikey.

    Big fat fail.

  15. michael r james

    John Bennetts at 4:45 pm

    More wishfulfillment from BB? I am guessing you are thinking of:
    –General Electric-Hitachi’s resurrection of the IFR as a fast neutron reactor (FNR) to burn plutonium waste
    –Bill Gates’ TerraPower is developing a type of FNR called a traveling wave reactor.
    –General Atomics is developing a FNR called the Energy Multiplier Module.

    All the other breeder research projects around the world have failed (see summary from Lovins below). As a scientist I am happy to see research continue though even the US gave up on it, including the Navy (for their aircraft carriers and submarines) for good reasons. No conspiracy needed.

    In a way all these various failures of existing designs and many new designs (not to mention Thorium) shows the problem: clearly there is NOT one single simple way forward or they would be doing it. Any new design involves taking multi-bets (technologically and financially and politically). And the history of nuclear reactor development over the past 60 years shows the time element and capital cost is a killer.

    [IFRs might in principle offer some safety advantages over todayʼs light-water reactors,
    but create different safety concerns, including the sodium coolantʼs chemical reactivity
    and radioactivity. Over the past half-century, the worldʼs leading nuclear technologists
    have built about three dozen sodium-cooled fast reactors, 11 of them Naval. Of the 22
    whose histories are mostly reported, over half had sodium leaks, four suffered fuel
    damage (including two partial meltdowns), several others had serious accidents, most
    were prematurely closed, and only six succeeded. Admiral Rickover canceled sodium-cooled propulsion for USS Seawolf in 1956 as “expensive to build, complex to operate, susceptible to prolonged shutdown as a result of even minor malfunctions, and difficult and time-consuming to repair.” Little has changed. As Dr. Tom Cochran of NRDC notes, fast reactor programs were tried in the US, UK, France, Germany, Italy, Japan, the USSR, and the US and Soviet Navies. All failed. After a half-century and tens of billions of dollars, the world has one operational commercial-sized fast reactor (Russiaʼs BN600) out of 438 commercial power reactors, and itʼs not fueled with plutonium.]

  16. Ian

    I have to question why our politicians always seem set on the big business option to solve problems even if the evidence is dead against it. Taking the big business option also adds risk. In the case of nuclear power for instance big business throw their weight about to get regulations relaxed, to get extensions to plant lives a la Vermont Yankee etc.

  17. John Bennetts


    As a “scientist”, you should know better than to quote from biased and discredited sources, such as Lovins.

    Try the following link for something that is not a week off the press, a paper presented at the World Energy Forum.


  18. Down and Out of Sài Gòn

    … and another comment stuck in moderation.

  19. michael r james

    That is just yet another paper trying to make a case for some futureware. Now without any bias at all, just tell me what the 60 year history of such things are?

    And so knocking Lovins and not addressing his claims is not going to make me run to BNC and waste my energy on that frustrating site (long, long threads that change their minds every hour and are filled with vapourware and wishfulfillment, totally ignoring the harsh depressing reality. Probably still claiming Fukushima is proof of why Japan should still be supporting nuclear power.
    And you know, even if for the sake of argument technically correct, we all know what the politics is. I am not going to give much thought to nuclear power until there is an actual proven design that meets cost and safety claims. (in other words come back in 20 years on thorium or FNR).

  20. Ian

    If all this push for nuclear is about replacing “cheap” coal or gas there’s obviously no chance in the near future (from a cost point of view). If its about reducing GHG emissions then we need to take into account the opportunity cost of continuing emissions during the long lead time it takes before a nuclear facility can be up and running compared to the time it takes for the various renewables to be put in place.

  21. beachcomber

    Reported elsewhere today:
    “OUTSPOKEN Senator Barnaby Joyce has put nuclear power on the LNP’s agenda in the lead-up to the next federal election following Queensland’s decision to resume uranium mining.”
    Barnaby Joyce and Martin Ferguson have much in common. Both are embarrassments to their parties, if not the nation.

  22. zut alors

    Is the price of de-commissioning the nvclear plants factored into this allegedly cheap source of power?

  23. zut alors

    Re Joyce and Ferguson: a nvclear reactor in each of their electorates would be the jewel in their respective crowns.

  24. dspw

    Refreshing to see a simple debunk of the economies of nuclear power. Gotta admit though, as a long standing tree hugger, I believe carbon poses a much greater threat to the planet than nuclear problems, in spite of the time issues of decay.

    Get efficient, green based, diverse sources of energy online ASAP! Now.

    Investment and bravery are key!

  25. wbddrss

    I am no expert. Especially I am no expert in this technology even though I have a degree in science.

    I suspect the reason for pursuing nuclear technology is more around energy intensity, not energy efficiency. Also energy independence rather than any favourability to and/or political alignment with extensive & well known nuclear risks.

    All costings are bised to financial engineering, capital guarantees, public liability insurance & massive size of owners equity to handle any catatrophe. Hence Nuclear just is not viable. This has nothing to do with energy intensity or energy efficiency. If u want energy independence you just have to put up with these disadvantages.

    Cross subsidies are everywhere in society & as it takes energy to create energy therefore dirty polluting energy is alweays used to create clean energy; making notions of energy efficiency & cost effectiveness as nonsense. This applies to all sources of energy. For example it takes energy to convert sand to silicon. There fore PV solar is not in my opinion free from the above claims in principle.

    I really do not know what the answer is except to accept energy diversity, including nuclear, & hope for the best.


  26. Malcolm Street

    Renewable energy is also capital-intensive, but has the advantage that capacity can be rolled out progressively, ie you start getting income much sooner than with a nuclear plant. And there isn’t the waste problem either.

    Dog’s breakfast – got it in one. Nuclear plants need far more cooling than fossil fuel ones (you don’t have much of the heat going out of a chimney and the thermal efficiency is lower), which generally means they have be by the sea. The French had to cut back the power output of inland plants during a drought a few years ago due to insufficient cooling water. There is *no way* an inland nuclear plant would be viable in Australia – we don’t have sufficiently reliable river systems. So they’d have to be in the coastal strip, the most heavily populated part. After Fukushima, who’s going to have one?

    Plenty of good comments about what a joke full-sized breeder reactors are – this is a technology that’s been around for nearly 60 years and still isn’t viable at full scale. Yes, I know the next generation will fix the problems, just like the new French and Finnish reactors are…

  27. Mark Duffett

    Contrary to Malcolm Street, nuclear plants do not need “far more” cooling than fossil ones (world-nuclear.org/info/cooling_power_plants_inf121.html). Inherent in this is the answer to Dogs breakfast’s question of ‘where’ – a simple one-for-one substitution of nuclear on existing coal and gas generation sites, using their existing water supply and grid distribution networks, will do quite nicely.

    Let’s not lose sight of the magnitude of the task here. An extremely (many would say ‘laughably’) optimistic pricing of powering Australia with renewable energy (speaking of vapourware) comes in at $370 billion (BZE). Even using Olkiluoto-like assumptions, a straight nuclear-for-fossil substitution in Australia would cost considerably less than that, and be more reliable to boot. If we really got our act together and mandated a single off-the-shelf model for use in Australia (e.g. the gen 3+ Westinghouse AP1000) the cost would drop substantially further, as the first-of-a-kind costs that have dogged other nuclear projects are eliminated.

    MRJ, there haven’t been ‘long, long threads’ on BNC for some time now. Discussions there have been shifted into a more tightly controlled forum. And you don’t need to go to BNC to see Fukushima as proof of why Japan should be supporting nuclear power, you can go to the Japan Times for that: japantimes.co.jp/text/eo20121023gc.html (not to mention Monbiot).

  28. Ben Heard

    Plenty of reasonable and correct points made in this article. Capital costs are indeed high for nuclear. Delays are indeed experienced in developed economies. In highly privatised electricity markets, that makes things tough. There would indeed need to be some hand of Government involved were Australia to follow this route.

    That’s were the reasonableness ends. Nuclear is not expensive per kW installed compared to “many renewables” or at least, not compared to any that can deliver the same product of zero-carbon electricity with a 90% capacity factor at massive scale. Which means, more to the point, nuclear is certainly not expensive per kWh compared to “many renewables”. The AETA report published by BTRE just a few months ago, which this author inexplicably failed to mention, makes these points clear.

    Japan has begun restarting reactors. It will be completing the construction of the new reactors. Nuclear build is running well in many countries around the world, China, the UAE and Sth Korea being notable examples.

    Nuclear technology does continue to develop, much to our benefit, and many of these changes control costs by simplifying and standardising design. The advent of small modular reactors (SMR) is a further development that will help to overcome the capital hurdle, very much in support of the comments of made by the minister.

    To suggest that nuclear is “far beyond the level of government support required by renewables” is to live in a wonderland that is inhabited by no renewable industry professionals. Every one I have met or heard from, and that is quite a few, are wholly pragmatic about such things. Meanwhile, renewables-champions BZE have put together a veritable fruit-salad of funding and subsidy to build the case for their Repower Pt August concept.

    To be aware of and honest about the challenges of nuclear power is very important. There certainly are some. But this article is deeply biased cherry-picking that misunderstands the options. No to nuclear will remain our choice, but that’s a route of fossil fuel dependence, not renewable revolution.

  29. Modus Ponens

    Why do so many commentators here say that nuclear is renewable when uranium, plutonium exhausts?

    If nuclear is so economical, why has it not been built? Liberal and Labor governments would get out of the way and let a firm construct one if it was purely economical – even with the political problem of where to locate it.

    With falling demand, huge time delay between investment and return and the leaps and bounds in real renewable technologies, the possibility of nuclear being established in Australia is somewhere in the proximity of 0-1%

  30. izatso?

    …. then this …. Inflated accounting shortfalls/cost over-runs, management myeopea/boof headedness brings the science undone every time. combined with, er, boosters on the payroll, construction ‘difficulties’, contractual parachute clauses for this, that, the other, and whatever else we may overlook ….. O, and not forgetting at any time the dirty great shield wall/force field/security barrier neccessary to keep the hi-jacked accountants kamikaze lear jet off the premises. how do you factor out human stupidity and pig headednes. don’t exclude this entirely as cynicism. people are not half as thorough now as once was neccessary …. the easy option, from the imaginary safety of the crowd of scapegoats is ever there.

  31. izatso?

    …. ‘the easy option, from the INBUILT safety of the crowd of scapegoats is ever there’ …. of course.

  32. Coaltopia

    Ferguson is clearly wrong – Nuclear will get more expensive like the (revised) $24 billion plant in Florida with a AP1000. Costs will also rise due to the need for increased safety.

    I’m always open to nuclear replacing coal, but will it supplant renewables instead? Arguably we need to be finding efficiencies, building better corridors/inter-connectors, fostering feed-in tariffs, *and* having generation that smooths out peaks and troughs. All of this takes money. The CEFC will be able to get private investment in certain sized renewable projects, but who will take part in a $25 billion+ project (we don’t have an established industry so costs are likely to be higher than the US).

    Will all parties be willing to suffer the intense public backlash against a nuclear plant? Just watch the video at the end of the article Down and Out linked.

    And where’s the waste facility? Who’s paying for it?

  33. John Bennetts

    @ Coaltopia, nuclear is already MUCH safer than any other substantial energy source, with the exception of hydro on existing dams.

    There is no need to fantasize that “costs will rise due to the need for increased safety”. If safety should be improved and thus cause increases in projected costs, then solar PV, solar thermal, all forms of fossil fuelled power station would have to raise their standards in order to meet current nuclear performance.

    If not for the Chernobyl experience, which was the result of non-approved, stupidly risky and undocumented “tests”, the total number of radiation-caused fatalities due to operation of nuclear power stations world-wide would be able to be counted on the fingers of one hand. Daily, there are car accidents somewhere causing much greater trauma, yet there is no equivalent outcry from the anti-nuclear industry.

    Comparative safety issues aren’t relevant in this discussion, except to support nuclear options, not to punish them.

    Regarding “where’s the waste facility?” As explained above, 99% of the hot radwaste from conventional nuclear power plants are the fuel for many centuries of world-scale nuclear, without digging any more uranium out of the ground anywhere. Whatever waste facility may be required for current stockpiles of waste will not be added to by fast nuclear generation – the waste problem will be progressively eliminated. That which will remain will have a much shorter half-life and highly secure containment only for 300 years. There are mmany sites world wide which have been contaminated FOR EVER due to chemical waste which does not spontaneously decompose, eg lead. I turn your question back on you… “Given that the existing ratioactive waste problem can be reduced by operation of fast breeder nuclear power plant, what additional costs should be borne by each of the other energy technologies in order to achieve an improvement in the existing chemical waste problems of the world?”

    This is not trivial. Lead, rare earths, arsenic and many other elements are integral components of solar and wind technologies. What is the plan to clean these up permanently? Other elements are released by burning of coal, eg selenium and arsenic and sub-PM10 particulates to atmosphere. What can this industry do to match the current achievements of nuclear power, let alone the promises of future nuclear options?

  34. Ian


    You say: – “I really do not know what the answer is except to accept energy diversity, including nuclear, & hope for the best.”

    Nuclear at its very best is just kicking the can down the road. It’s a polluting option just like fossil fuels and it’s relying on a limited resource that will, like all the other natural resources we use, get more expensive to extract as it becomes harder to find and get to.

    Of course you can say the same for renewables because they do rely on various rare earths and other non-renewable materials themselves but not as fuel and, I guess the road is likely to be a lot longer in their case.

    Also we should not forget that replacing fossil fuels with uranium fuels means ramping up the amount of uranium needed, dumping sites needed, as well as all the risks inherent in its use several fold.

  35. Coaltopia

    Happy not to call it safety, let’s call it increased compliance and I cite the €25 billion price tag above.

    How soon could a fast reactor realistically be built?

  36. michael r james

    John Bennetts at 2:08 pm

    JB, your “arguments” are riddled with–and apparently dependent on–false equivalences. (More people die in car accidents than nuclear accidents!) And the idea of endless nuclear fuel provided by breeders is belied by the evidence of all those failed FBs littered around the world (and accurately summarized in my extract of Levins, not a single point of which you have deigned to counter with evidence). The two biggest such projects from two countries seriously interested in pushing the technology for energy independence reasons (France and Japan) closed their programs due to accidents and fires, and cost and no sign of convincing progress on the horizon. It exhausted political support in both those countries who have vastly more persistence on these things than most others. Doesn’t that tell you something?

    In today’s AFR:

    [EDF seeks nuclear incentives
    Jim Pickard & Sylvia Pfeifer
    The French energy group EDF has given warning that it my not pursue plans to build Britain’s first new nuclear power station for decades unless it is offered sufficient incentives. Vincent de Rivaz, chief executive, told the Commons energy committee yesterday that EDF needed “a compelling business case to proceed with a project he compared in scale to the Olympics.]

    The cost of the plant EDF is wanting to build at Hinkley Point in Somerset is GBP14bn (AUD$22bn). Hinkley Point already has several old nuclear reactors.

    You know, the major difference between someone like you (or BB) is not on the technology or its promise. Though I think France has pursued breeders about as much as a country could–and proven yet again that the (sometimes wrong) intuition that using liquid sodium at 800C is … tricky! One can make a fair case for thorium or pebble bed, or small modular reactors etc. The problem is that you are blind to the history and evidence that these things take decades of R&D and one never can tell how well any one plan will work (if we/they did, it wouldn’t be R&D, they would be building them; they aren’t). And there is no credible evidence that Japan is going to build new reactors.

    It is fundamentally different to R&D in renewables or batteries/storage where the costs of R&D are a quantum lower and don’t suddenly lead to a $20bn project hitting a cul de sac and being cancelled (Phenix etc) with almost nothing to show for it. The planet is awash with huge amounts of “free” energy that, to be sure, requires entirely different approaches (primarily due to low energy density and intermittency), but so what? You really don’t believe there is not going to be massive progress in those technologies in the next 20 years, during which time barely a half-dozen new reactors will get built in the developed world? The biggest risk with nuclear is that it would represent a huge distraction and diversion of funds and political energy into a cul de sac.

  37. michael r james

    Most of post stuck in mod.

    In today’s AFR:

    [EDF seeks nuclear incentives
    Jim Pickard & Sylvia Pfeifer
    The French energy group EDF has given warning that it my not pursue plans to build Britain’s first new nuclear power station for decades unless it is offered sufficient incentives. Vincent de Rivaz, chief executive, told the Commons energy committee yesterday that EDF needed “a compelling business case to proceed with a project he compared in scale to the Olympics.]

    The cost of the plant EDF is wanting to build at Hinkley Point in Somerset is GBP14bn (AUD$22bn). Hinkley Point already has several old nuclear reactors.

  38. John Bennetts

    1. Your preferred option is not even remotely affordable. Renewables have been tried and are now up against a wall locally and internationally. AGL has this week dropped its plans for expanding its South Australian wind and solar, Germany has poured hundreds of billions of dollars into wind and now have offshore wind generators which is unable to be connected to the load: it sits there, costing money and doing nothing.

    You mention Japan and France regarding nuclear cutbacks. I’m surprised that you didn’t also mention Germany. They are all playing the same game, in which short term cutbacks are used as political expedients to buy time in the knowledge that the inevitable pain from power blackouts and quality issues such as frequency droops will lead industry to flee Germany and Japan to more reliable energy grids. The political pendulum will swing as the public sees that their money and standard of living have been needlessly sacrificed on the altar constructed by the anti-nuclear industry.

    Once public sentiment swings back to nuclear, as it surely must, the race will re-start in earnest in all three of these countries.

    One reason I did not answer point by point the comments regarding Lovins, is that I simply cannot stand his one-eyed, ranting, cherry-picked cr_p. I’ve read too much of it already and don’t want to go back there.

    The other reason is that I have a smashed right index finger, so typing is somewhat tedious.

    So, while I enjoy contemplating the world’s energy future and would enjoy face to face discussion with knowledgeable others who share this interest, such as mrj, tit-for-tat online slanging matches do little to advance the prospect of worldwide secure, safe and abundant energy or reduction of the imminent threat of climate damage through use of fossil fuels: gas, coal and oil.

    Before signing off, I must correct one error I made above. I referred in haste to nuclear as being “renewable”, which it of course is not. However, the fuels for the next 10,000 years have already been mined, provided that the correct technological path is followed. The same cannot be said for any other proposal except pure solar PV, which simply isn’t available 3/4 of the time.

    Time will tell. This debate hasn’t really progressed for ten years, as rich countries throw their treasure at dreams of renewables and poor countries make do with little or nothing, energy-wise as in all things. In another ten years the situation will have changed again. Here’s hoping for carbon-free, economically rational, globally available, schedulable and reliable power systems. A mix of nuclear and renewables might do the job. Renewables alone have no chance.

  39. michael r james


    Not sure what you think “my preferred option” is since I didn’t specify. Certainly I see no reason why renewables cannot end up supplying the majority of Australia’s electrical generation. Yes, the storage problem will need to be solved –which means economically, though in some senses it is not as difficult as some believe since it involves selling power back to the grid at optimal peak prices. And which, incidentally, is the opposite of the nuclear power conundrum of only really being good at supplying baseload, not peak load (which of course France increasingly buys off its neighbours paying top price while selling its nuclear excess power at cheapest rates at off-peak).

    As I have argued many times, I am not unilaterally against nuclear power, except for today and the near future. All the various wonderful benefits of 4th gen need to be delivered rather than promised, before I will change my mind.

    Your point about “public sentiment swings back to nuclear” is curious because it is indeed a paradox that the countries most subject to energy shortage inconveniences are France and Japan. Not Germany which as you will be aware, had a spectacular fortnight a few months ago when renewables supplied >50% of the grid (no grid meltdown as some predict). The Japanese public seem capable of putting up with such inconveniences and the main driver for turning back on some of the nukes is to get industry back up to full speed. Fair enough. But building more, I don’t think so.

    Incidentally France can solve some of its current energy problems by the easiest of means: efficiency. Because after 40 years of “energy too cheap to metre” (though still >2x Australian prices) they are way behind the rest of Europe on efficiency (insulation etc, use of electric heating). Japan is best in the world on efficiency already.

    And those poor countries are likely to benefit the most from the rich world’s development of cheap(er) renewable energy systems, since it will avoid awful trade imbalances on the usual fossil fuels. (Nuclear is completely untenable in most of the world because of ridiculous upfront capital requirements and the need for stable high electricity tariffs; some of the funding models for nuclear in the US depend on electricity retail prices going up years ahead of delivery so as to help pay for that upfront capital loading.)

  40. michael r james

    Mark D.

    Technically it IS true that an equivalent sized nuke needs more cooling than coal:

    [However, currently operating nuclear plants often do have slightly lower thermal efficiency than coal counterparts of similar age, and coal plants discharge some waste heat with combustion gases, whereas nuclear plants rely on water. ]

    This may be considered “minor” until droughts and hot summers intervene. Then it results in nuclear power plants being rundown and power being imported from other sources to make up the shortfall. This has happened almost all over the world–Europe, USA, Japan (and almost certainly will happen to all those plants China is building because China actually has a bigger water shortage than any of these countries, and already eco-stressed waterways).

    Then there is the issue that nuclear plants tend to be 1. bigger (Areva’s EPR is 1.6GW) and 2. multiple units tend to get built at the same site.

    Finally, although cooling systems can be built to greatly reduce the dependence of nuclear power (or any fossil fueled generator), the cost is apparently so great that I am not aware of anyone doing it, ie. certainly retrospectively (eg. all those inland plants in France). The financial structure of nukes is so delicate and so loaded with capital costs that they avoid this additional cost (which is why even new ones are still not being built with such cooling systems; I suppose this is one advantage Finland has for its Areva plant: permanently cool water.)

    At any rate, with respect to Australia, you wouldn’t argue that it is extraordinarily unlikely that any proposed nuclear plant would be anywhere other than on the coastline?

  41. John Bennetts

    Dry cooling is existing technology.

    MRJ is correct, nuclear power plant are slightly less thermally efficient that coal fired thermal plant. They are similar, from an energy in/ energy out point of view, to solar thermal. This is because they operate at similar low temperatures, while coal fired units operate far hotter and are thus able to capture a larger percentage of the energy from the steam for sending out as electricity. Solar thermal and nuclear are thus slightly thirstier than coal fired plant of equal size.

    However, there are alternatives, such as dry cooling, for a price. Dry cooling towers use lots of space, lots of fans and cost more money to construct and to operate.

    Dry cooling towers are thus not specifically an argument against nuclear power. They are an argument against using a scarce resource, fresh water, to condense spent steam when alternatives are available.

    Remember, Australia is the driest continent. We only have a couple of dry cooling tower base load power stations at present. Regardless of the technology, any future steam-driven power turbines will probably be dry cooled on future sites because ocean frontages are becoming rarer and more expensive and fresh water is not easy to obtain in Australia.

    Regarding retrospective fitting of dry condensers, I agree that this is not probable, because this implies major rearrangement of the layout of major items of very expensive plant, such as switchyards and transmission lines and generator transformers weighing hundreds of tonnes. It makes better sense to back off the load a bit during extreme heat waves and to stay within the existing water budget and environmental limits on cooling water exit temperatures.

  42. Ian


    Do you have any info on the level of direct subsidies being provided to nuclear plant operators. Also indirect subsidies and if any are 100% government owned?

    And once again thank you for your informative posts on this site.

  43. John Bennetts

    Ian, I have no idea where you are coming from. Nuclear power receives no subsidies in Australia – there are legislative barriers to the industry.

    In USA, the nuclear power industry pays a levy for future waste management. The amounts raised but not spent are prodigeous, and certainly more than adequate for the purpose. Nuclear power plant operators are required to provide their own insurances, contrary to popular misconception.

    In Germany, nuclear power stations have been subject to a special additional tax for almost a decade, the purpose of which is to provide funds for subsidy of renewable wind and solar.

    If you have questions about subsidy of specific power technologies, I suggest that you should enquire more broadly and include wind, solar PV and other power systems in your enquiries.

    Your enquiry reeks of prejudice. Why on earth do you suppose that nuclear power is actually subsidised? It is hobbled and handicapped at every turn. It is forced to comply with special regulation which applies only to nuclear power, it is forced to be safer and cheaper than its competitors, yet you enquire about imagined subsidies.

    All this, as the world heats up due to climate change!

    The real challenge is not for less nuclear power, it is for less fossil fuells, yet we waste time setting ever more hurdles for fission solutions to our energy problems to jump. Amazing!

  44. michael r james

    JB: “Dry cooling towers are thus not specifically an argument against nuclear power.”

    That is semantics. The reality is that the extra capital cost of so-called “dry cooling” is such that nuclear proposals resist them. Or underestimate the problem (ie. hotter & drier summers) or overestimate the available cooling (rivers). In that infamous French summer shutdown (I recall about one third of their national system) the plants did in fact exceed their agreed environmental limits; no doubt because they were hoping the weather would change etc. And nukes still require huge cooling even after being shut off (as we saw dramatically at Fukushima). (Newer designs apparently can be ramped up and down more quickly though I am unsure what the cooling requirements would be.)

    Incidentally there is another alternative to using “duck water” (rivers) or “dry cooling”. The giant Martin gas + solar-thermal plant in Florida uses cooling ponds spread over 7,200 ha in which the water flows over a 50km route to cool down. This is in Florida, the most consistently hot/sunny part of the US mainland. The plant is apparently the largest gas generator (almost 4GW) in the US. It is fresh water (the area was a swamp like a lot of old Florida) and so one still wonders about water use which must come from the adjoining Lake Okeechobee (the largest freshwater lake, though shallowest, in southern US). I presume this elaborate system was forced on Florida Light & Power because Lake Okeechobee is a stressed part of the wetlands & everglades. In the past decade its water level is down to 2.7m from longterm average of ≈4m.

    Excuse the longish excursion of this story but I find it illustrative of the problems facing powergen everywhere and in which water is a key part of the story. Unlike the even quite recent past it can no longer be ignored. And in turn what that means, is that solar PV has a “hidden” benefit in not requiring any cooling (indeed when built in urban areas on roofs it saves on building heating costs. That is, in addition to its other “hidden” effects of: 1. removal of need for expensive upgrade of power transmission systems 2. merit order effect (selling into most-expensive peak market) 3. providing power at exactly time required (hottest, sunniest part of day).

  45. John Bennetts

    We don’t have to go to Florida in order to compare once-through power station cooling water systems using a freshwater dam with cooling towers. There are examples her in Australia, including two that I am intimately familiar with.

    Bayswater Power Station (commissioned mid-1980’s) draws water from the Hunter River, stores it in dams and uses it in conventional cooling towers – the same kind as are used to dispose of the latent heat of condensation of nuclear power stations. The sister station, Liddell (commissioned early 1970’s), is constructed on the shores of Lake Liddell, which is also topped up from the Hunter River.

    Studies have shown that the newer, slightly more efficient Bayswater, uses slightly more water as a percentage of energy sent out than does Liddell.

    There is a reason:
    Liddell’s waste heat is primarily lost via evaporation from the surface of the lake, as also the example cited in Florida. A small amount is also lost via radiation from the surface of the lake.

    Bayswater, on the other hand, does not disperse heat by radiation and is further penalised, though only slightly, due to wind drift of droplets.

    The result is as stated above, Bayswater uses a little more water than Liddell per MWh sent out.

    To, at this late stage, try to divert the discussion by mentioning some strengths of PV such as merit order effect (but only on sunny days) or the other two you have dragged in may be interesting, but it is also irrelevant.

    At no stage did I say that power plant should be run outside of environmental envelopes, as you have accusued the French of doing. That is inexcusable.

    Where this was heading was comparison of the costs and benefits of dry cooling towers versus wet cooling towers. There are costs and there are benefits.

    If PV has none of these costs, then that will be reflected in the LCOE figure. LCOE = Least Cost Of Energy. It is the internationally recognised comparitor between competing energy sources after all lifetime costs have been taken into account.

    PV has a higher LCOE than many other generation options. I wish that this was not so, because I have a soft spot for PV. It is a neat part-solution. However, it certainly is not cheapest or best in all situations.

    The subjective benefits of solar are somewhat off topic here, in any case. This thread is/was about the comparative costs of nuclear options. Costs. This is about money. It is not a fashion parade.

  46. Mark Duffett

    “(PV)…providing power at exactly time required (hottest, sunniest part of day).”

    I’m pretty sure I’ve mentioned before that peak power demand on the hottest days (i.e. annual peak, not just diurnal) occurs not long before 5 pm, just as PV output is beginning to plummet. PV efficiency also drops with temperature, to a similar degree as increased water usage by nuclear over coal.

    I also find it more than a little hypocritical that those decrying LCOE as a reasonable basis for comparison also profess adherence to long term thinking about economic goals and constraints, and criticise industry for its short-termism.

  47. Ian


    You say, “In USA, the nuclear power industry pays a levy for future waste management. The amounts raised but not spent are prodigeous, and certainly more than adequate for the purpose. Nuclear power plant operators are required to provide their own insurances, contrary to popular misconception.”

    Really? The levies are more than adequate are they? As far as I know they have not yet found a way to deal with their waste and their are all sorts of subsidies and guarantees provided to the industry in the US and elsewhere.

    You say my inquiry reeks of prejudice. You are right and your answer is similarly biased I would suggest.

    The real thing to do in addressing climate change is to encourage those solutions that offer the best chance of solving the GHG problem and doing so quickly. At the

  48. Ian

    Sorry my comment was prematurely posted. I continue…

    At the same time we should not embark on proposed solutions that at best create more problems down the road, are dangerous right now, are slow to roll out and have many other potential and adverse consequences.

    I will not address the other points you made in your reply as they are simply a diversion that serve to cloud the the fact that nuclear is both a dangerous and an expensive potential solution to the world’s GHG/energy problems.

  49. John Bennetts

    Ian, the nuclear power industry in USA is levied 0.1 cents per kWh for waste management via the NRC. The fund has been reported to be worth over $30B and growing rapidly.

    You facetiously challenge whether they have found a way to manage this waste. The simple answer is that, yes, there are several ways to manage this waste. I favour using it as fuel in advanced reactors and thus recovering 100 times the energy already derived, at the same time reducing the remaining waste fuel to a tiny fraction of its present mass and reducing dramatically the time during which the residual fuel is dangerously radioactive, to a reported 300 years. After this time, the waste is no more radioactive than the uranium ore bady from which it was originally mined. That sounds like a solution to me.

    The lead article is about whether or not nuclear power costs are reducing over time, which they are and by various pathways.

    Virtually everything posted here by Ian has related to his personal assessment that the article was about something else entirely.

    It is not about GHG and climate change, although there are clearly avenues to make significant improvements on these issues by using more and better nuclear power plant than at present.

    It is not about subjective assessment of dangers posed by nuclear power, although there is plenty of credible data to indicate that the safety record of NPP’s is better than, for example, fossil fuelled power stations and even wind and solar installations.

    It is about cost, and the international comparator of energy costs is LCOE – Levellised Cost Of Energy. There are many studies available which demonstrate that the LCOE of nuclear power is falling and is way below fossil, wind and solar.

  50. michael r james

    JB: “If PV has none of these costs, then that will be reflected in the LCOE figure. LCOE = Least Cost Of Energy.”

    (I thought the L was for Levelized?)

    I am not aware of any nuclear plants which employ dry cooling. I suppose there might be a few somewhere? At any rate I reject the validity of those LCOE tables: in the real world they clearly are nonsense. (And that is without adding in all the serious costs not included or covered de facto by government. For example the gov. $8bn loan guarantee for those twin nukes in Georgia comes with an approx. $800M insurance fee which is the normal industry fee for such loan guarantees but which the Georgia builders don’t want to pay and threatened to halt the project.)

    Ian at 1.28pm.

    You are correct. The industry buys insurance but it only covers accidents/liabilities up to a few hundred million. Beyond that of course it falls to government. Because even accidents that result in no deaths can easily render adjoining land uninhabitable for a very long periods (Fukushima) the cost of that alone will run into billions.

    Re decommissioning, most of the approx. 25 plants that have been partly or fully decommissioned, most are early small or experimental reactors. Costs are in direct proportion to size. Most big commercial reactors in the US (and there are 104 reactors most reaching their end of life) are put into stasis (to be fair part of the reason is that it makes sense to wait ≈50 years by which time a lot of the short-half-life nasties have decayed). An idea of the issues can be grasped from this NYT article from 2010:

    [Twelve years ago, Commonwealth Edison found itself in a bind. The Zion Station, its twin-unit nuclear reactor [1040 MW] here, was no longer profitable. But the company could not afford to tear it down: the cost of dismantling the vast steel and concrete building, with multiple areas of radioactive contamination, would exceed $1 billion, double what it had cost to build the reactors in the 1970s. Nor could Commonwealth Edison walk away from the plant, because of the contamination. The result was that Zion Station sat in limbo for more than a decade, and Commonwealth Edison, now part of Exelon, paid about $10 million a year to baby-sit the defunct reactor.]

    That story in Nov 2010 discussed a new idea on how to contain costs but in June this year (Chicago Tribune):
    [In Zion’s case, Commonwealth Edison ratepayers contributed to its trust fund while paying electricity bills over many years. Exelon didn’t think the fund was adequate and planned to let it grow, the company said. Its goal was to begin decommissioning Zion in 2014 and completed by 2030 – 32 years after the plant’s permanent shut down. But EnergySolutions said it could do it sooner, faster and cheaper; so, Exelon hashed out a deal.]

    Of course in the US the decommissioning means all the low-level contaminated structural components (steel, concrete) are simply shifted to a federal storage site (eg. Hanford in Wash State). Hi-level stuff is similarly shipped to Hanford (given political failure to agree on the Yucca mountain permanent storage site) or kept on-site if that site has other working nukes. Interestingly in France they have built a dedicated steel works that reprocesses the stuff into new steel that is used in new construction of new nukes.

  51. Ian


    1. In reference to the 2 new nuclear power stations being given the go-ahead in Georgia, USA, I ask is the following incorrect?
    “Not only did the Energy Department award the two proposed new Vogtle AP1000s an $8.33 billion nuclear loan guarantee, at taxpayer financial risk — DOE also chose the AP1000 as a “Nuclear Power 2010″ program design, subsidizing its engineering design as well as regulatory licensing costs in a 50-50 cost-share with industry”

    2. Am I wrong in asserting that the cleanup of the Fukushima nuclear meltdown will largely be borne by taxpayers as too the current and future health problems that will result from the fallout?

    3. Will Finland’s Olkiluoto 3 overruns (50%+)and extensive delays end in a viable, non-subsidized producer of energy?

    4. If externalities are ignored both for fossil fuel and nuclear powered energy options would nuclear really be the cheapest alternative?

    But as you say, “The lead article is about whether or not nuclear power costs are reducing over time, which they are and by various pathways.” The nuclear power industry is a fairly mature one, certainly more so than most renewables so I find it very hard to believe that “costs” are falling even at this point. And what do you mean by costs? There are many ways to measure costs and when estimating future costs there are many assumptions that can be made so I take any claim of falling costs for nuclear with a pinch of salt – especially when they are made by vested interests and their supporters like Ferguson.

  52. John Bennetts

    1. A loan guarantee is not a subsidy. Loan guarantees are relatively common for major projects, because lenders are risk averse. I have been advised that not a single loan guarantee in the USA’s hundreds of nuclear power plant has ever been called in. So, agree with you that many billions of dollars of loans have been guaranteed by the US Government. That is a far cry from having hundreds of millions of dollars go up in smoke when a solar cell factory fails. That one, earlier this year, was actual cash subsidy and it was lost almost as soon as the factory opened for business.

    2. Regarding cleanup costs for Fukishima, I have heard that public funds will be called upon after the corporation has spent what it has. From memory, there is also in the US a government undertaking that, beyond a predetermined figure, cleanup will also be at public expense. I don’t like that at all and do not support privatising profits while socialising the risks.

    Before we leave this topic, I must mention the many hundreds of abandoned wind generators and solar installations across USA. Google abandoned wind farms” and similar – they photos are horrifying. In USA at least, energy industries in general appear to be passing their cleanup costs back to the taxpayer. This, then, is not about nuclear or solar or anything in particular – we might be able to agree that those who make messes should be required to provide properly either via cash (as per the levy of 0.1 cents per kWh, above for American NPP’s) or insurance.

    3&4. As mentioned previously, discussion of comparative energy costs for proposed plant should be on the basis of LCOE, which for some reason Ian avoids – presumably, because as I pointed out, nuclear has a lower LCOE than its competitors, except for new hydro on existing dams, which is pretty much limited in Oz. Olkiluoto has been cited, even at the current final construction, operating and ownership costs, as having a satisfactory and competitive LCOE, though not as good as had been projected. Surely the comment was not to be interpreted as a claim that only nuclear power stations have cost over-runs.

    Reference demonstrating the clear safety advantage of nuclear power in comparison to others: http://seekerblog.com/2012/03/21/fukushima-syndrome/

    Reference citing LCOE for FOAK (first of a kind) nuclear power against competing technologies. NB Olkiluoto is an example of FOAK. The next in the series can be expected to be somewhat better. Ian selectively referred to an FOAK experience, then c laimed that this is typical of NPP generally, which is not the case. This reference, like many others, illustrates the fallacy embodied in this assertion. See Figure 1.

  53. Mark Duffett

    “The nuclear power industry is a fairly mature one, certainly more so than most renewables”

    I disagree. Photovoltaic cells, wind turbines, solar thermal power plants and hydroelectrics are all well over a century old – at least twice the age of nuclear. Looking forward, nuclear has demonstrably further to travel upside. There is nothing on the renewables horizon to compare with the combined 100-fold efficiency increase and waste-eliminating capability of Generation IV technology.

  54. John Bennetts

    Typo: LCOE of course means the Levellised Cost, as I stated originally when I introduced the term.

    This article is about LCOE, not selective bits and pieces combined with discussion about the Fukishima experience, the Japanese government’s role in making bad into worse or fosussing entirely on opinion when facts get in the way.

    LCOE is the internationally recognised method of comparing costs for various power generation proposals and is thus at the core of this discussion, yet both the original writer and those who have come here to defend a certain point of view have avoided its use, relying instead on opinions.

    If the LCOE is increasing, then Mr Keane is correct. However, the LCOE remains stubbornly in favour of other technologies, including both new nuclear, far in front of PV and solar thermal and offshore wind and most onshore wind, whose best sites are rapidly becoming full, so wind’s energy costs must rise.

    The facts which others stubbornly avoid are out there. What the Minister said is correct. Keane is not.


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