Why the free market can't do nuclear power and our industry is slowly declining (UK)

[kristopher]

4. How convenient of you to ignore the decades of subsidies for nuclear...

...that have resulted in steadily increasing costs.

And the results of the pittance paid to date in subsidies for renewables that has resulted in near price parity with fossil fuels.

Your focus on fledgling offshore wind in your example is a mark of your desperation. You know that over the history of nuclear the public has largely paid for the electricity generated twice since the total subsidies have largely been more than the total value of all the electricity the nuclear fleet has generated.

Nuclear is a prime example of how NOT to use subsidies.


Union of Concerned Scientists: Nuke Subsidies Exceed Value of Electricity Produced

NUCLEAR POWER: Still Not Viable Without Subsidies
(From Executive Summary)
Conspicuously absent from industry press releases and briefing memos touting nuclear power’s potential as a solution to global warming is any mention of the industry’s long and expensive history of taxpayer subsidies and excessive charges to utility ratepayers. These subsidies not only enabled the nation’s existing reactors to be built in the first place, but have also supported their operation for decades.

The industry and its allies are now pressuring all levels of government for large new subsidies to support the construction and operation of a new generation of reactors and fuel-cycle facilities. The substantial political support the industry has attracted thus far rests largely on an uncritical acceptance of the industry’s economic claims and an incomplete understanding of the subsidies that made—and continue to make—the existing nuclear fleet possible.

Such blind acceptance is an unwarranted, expensive leap of faith that could set back more cost-effective efforts to combat climate change. A fair comparison of the available options for reducing heat-trapping carbon emissions while generating electricity requires consideration not only of the private costs of building plants and their associated infrastructure but also of the public subsidies given to the industry. Moreover, nuclear power brings with it important economic, waste disposal, safety, and security risks unique among low-carbon energy sources. Shifting these risks and their associated costs onto the public is the major goal of the new subsidies sought by the industry (just as it was in the past), and by not incorporating these costs into its estimates, the industry presents a skewed economic picture of nuclear power’s value compared with other low-carbon power sources.

SUBSIDIES OFTEN EXCEED THE VALUE OF THE ENERGY PRODUCED
This report catalogues in one place and for the first time the full range of subsidies that benefit the nuclear power sector. The findings are striking: since its inception more than 50 years ago, the nuclear power industry has benefited—and continues to benefit—from a vast array of preferential government subsidies. Indeed, as Figure ES-1 (p. 2) shows, subsidies to the nuclear fuel cycle have often exceeded the value of the power produced. This means that buying power on the open market and giving it away for free would have been less costly than subsidizing the construction and operation of nuclear power plants. Subsidies to new reactors are on a similar path...

Doug Koplow is the founder of Earth Track, Inc., and has worked on naturalresource subsidy issues for more than 20 years, mainly in the energy sector. He holds a B.A. in economics from Wesleyan University and an M.B.A. from the Harvard Graduate School of Business Administration.

The Union of Concerned Scientists (UCS) is the leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choice.

Notes on Chart:
IOU and POU refer to Individually Owned and Publicly Owned units
The dotted lines break the chart into 3 temporal segments where the bars are the subsidy amounts and the dotted lines show EIA averaged electricity prices for the period in question.




Download full report at http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_report.pdf

Download Executive Summary at http://www.ucsusa.org/assets/documents/nuclear_power/nuclear_subsidies_summary.pdf

From Press Release:

The key subsidies for nuclear power do not involve cash payments, the report found. They shift the risks of constructing and operating plants -- including cost overruns, loan defaults, accidents and waste management -- from plant owners and investors to taxpayers and ratepayers. These hidden subsidies distort market choices that would otherwise favor less risky investments.

The most significant forms of subsidies to nuclear power have four principal objectives: Reduce the cost of capital, labor and land through loan guarantees and tax incentives; mask the true costs of producing nuclear energy through subsidies to uranium mining and water usage; shift security and accident risks to the public via the 1957 Price-Anderson Act and other mechanisms; and shift long-term operating risks such as radioactive waste storage to the public.

The report evaluates legacy subsidies that helped build the industry, ongoing support to existing reactors, and subsidies available for new projects. According to the report, legacy subsidies exceeded 7 cents per kilowatt-hour (¢/kWh), well above the average wholesale price of power from 1960 to 2008. In effect, the subsidies were more valuable than the power the subsidized plants produced.

“Without these generous subsidies, the nuclear industry would have faced a very different market reality,” said Doug Koplow, the author of the report and principal at the Cambridge, Massachusetts-based consulting firm, Earth Track. “Many of the 104 reactors currently operating would never have been built, and the utilities that built reactors would have been forced to charge ratepayers even higher rates.”

http://www.ucsusa.org/news/press_release/nuclear-power-subsidies-report-0504.html?utm_&utm_medium=pr&utm_campaign=NukeSub-pr-2-23-2011