Nuclear Facts

Renewable Energy Technologies Are Expanding Faster Than Nuclear

It is instructive to compare this “nuclear renaissance” with the current rate of growth in wind power, which is adding about 3,000 MW of generating capacity per year. To accurately compare the two, capacity utilization must be factored in: Assuming a favorable case, namely that by 2021 the nuclear tax credits actually stimulate 1.5 times the amount of subsidized capacity, and with an average capacity utilization factor of 85 percent, then 0.85 x 9,000 MW = 7,650 MW/15 years = 510 MW/yr as the average annual expected growth for nuclear, but with none of it available for at least 10 years.

Even though wind has a much lower capacity utilization factor, and even assuming no further acceleration in the its rate of growth, then 0.35 x 3,000 MW x 15 yrs = 15,750 MW for wind over the same period, or at least 1,050 MW/yr, with all of it available each year. In other words, wind power is already growing at twice the potential growth rate of nuclear over the next decade, and the outlook for wind is for even faster growth.

In a similar vein, recent dramatic improvements in the processes for mass-producing solar photovoltaic cells suggest that by the time these subsidized new nuclear plants are connected to the grid, distributed solar power will be a formidable, and likely superior competitor.

Nuclear Capital Costs Remain Too High

If these subsidized “first mover” nuclear plants fail to produce major design and production innovations that significantly reduce the high capital cost of subsequent nuclear power plants—and there is little evidence to date to indicate that they will —then private investors will return to looking unfavorably on the industry once the current tax credits expire.

The cost growth already occurring in the new Areva “European” power reactor under construction in Finland is not encouraging. The 2002 cost estimate of $2.3 billion for this 1,500 MW reactor had grown to $3.8 billion by July 2006, and this number does not include “off-balance sheet” costs of 1.5-2 billion euros ($1.92-$2.56 billion) that reactor builder Areva has separately agreed to devote to the project.

A probable total project cost at or above $5 billion for this new reactor is certain to scare U.S. utilities and capital investors from making an aggressive commitment to nuclear energy in the near term. Moreover, as the technologies for renewables, energy efficiency, and industrial waste-heat co-generation continue to improve, they will become increasingly attractive investment alternatives to nuclear power.

A national cap on carbon emissions would certainly help reduce nuclear’s significant current cost differential with large coal- and gas-fired power plants, but it will not ensure that nuclear stays competitive with these smaller, cheaper, cleaner, faster, and more flexible distributed sources of electric power generation.