Skip to main content

More on Energy Incentives

A Musing Environment follows up on David Bradish's analysis from earlier this week.

Technorati tags: , , , , , ,


Jim Hopf said…
This analysis is an extremely important reference for nuclear professionals to have on hand when the issue of subsidies comes up. The best I've seen.

What's amazing is that fossil fuel subsidies are higher even though the analysis only considers monetary subsidies, and ignores the largest fossil fuel subsidy of all. That is, the priveledge of polluting the air and water for free, and not paying for any of the (huge) public health and environmental effects that result. Most studies, such as the European Commission's ExternE project (, show these costs (i.e., this subsidy) to be huge, on the order of 4-8 cents/kW-hr, enough to double fossil fuels' price.

It is not correct to equate Price Anderson with economic subsidies like those calculated in this study. It is correct to equate it with an external (i.e., unpaid health/environmental) cost, such as the huge unpaid costs enjoyed by fossil fuels. In either case, it's about inflicting (or potentially inflicting) health and environmental damage w/o paying for it. It's the same animal. Its just several orders of magnitude smaller for nuclear.

The whole idea behind PA is that nuclear should have to pay complete compensation for any health or environmental costs if it ever were to pollute the environment. The question is whether or not they are paying sufficient premiums to pay for full insurance that would cover even the worst accident. If nuclear's current premiums are only a fraction of what would be necessary, then the remainder could be considered a subsidy.

Sure, perhaps it is. But to give you an idea of the magnitude of this "subsidy", you have to consider the long term average public health and economic damage caused by such potential events. Well, it's been over 40 years and nothing even approaching such an event has happened. Furthermore, studies show that the ANNUAL pollution from fossil plants causes roughly the same magnitude of economic damage and far larger public health impact than would a very severe meltdown!! They do this every year and never pay one dime in compensation! As the expected frequency of a severe meltdown is roughly one per 1000 years, then the PA "subsidy" is ~1000 times smaller than the subsidy enjoyed by fossil fuels, even if you assumed the premiums paid by the industry are negligile/zero.

Studies bear this out. Even studies by anti-nuclear organizations that attempted to quantify the PA subsidy came up with values ranging from 0.03 to 0.3 cents/kW-hr. This, compared to the ~4-8 cent/kW-hr subsidy enjoyed by fossil fuels. I'd be happy to have nuclear pay an additional ~0.1 cent/kW-hr to cover any potential PA subsidy, or to pay for unlimited insurance itself, as long as fossil plants have to pay their (4-8 cent/kW-hr) external costs as well. Until that happens, forget it!

Popular posts from this blog

A Billion Miles Under Nuclear Energy (Updated)

And the winner is…Cassini-Huygens, in triple overtime.

The spaceship conceived in 1982 and launched fifteen years later, will crash into Saturn on September 15, after a mission of 19 years and 355 days, powered by the audacity and technical prowess of scientists and engineers from 17 different countries, and 72 pounds of plutonium.

The mission was so successful that it was extended three times; it was intended to last only until 2008.

Since April, the ship has been continuing to orbit Saturn, swinging through the 1,500-mile gap between the planet and its rings, an area not previously explored. This is a good maneuver for a spaceship nearing the end of its mission, since colliding with a rock could end things early.

Cassini will dive a little deeper and plunge toward Saturn’s surface, where it will transmit data until it burns up in the planet’s atmosphere. The radio signal will arrive here early Friday morning, Eastern time. A NASA video explains.

In the years since Cassini has launc…

Sneak Peek

There's an invisible force powering and propelling our way of life.
It's all around us. You can't feel it. Smell it. Or taste it.
But it's there all the same. And if you look close enough, you can see all the amazing and wondrous things it does.
It not only powers our cities and towns.
And all the high-tech things we love.
It gives us the power to invent.
To explore.
To discover.
To create advanced technologies.
This invisible force creates jobs out of thin air.
It adds billions to our economy.
It's on even when we're not.
And stays on no matter what Mother Nature throws at it.
This invisible force takes us to the outer reaches of outer space.
And to the very depths of our oceans.
It brings us together. And it makes us better.
And most importantly, it has the power to do all this in our lifetime while barely leaving a trace.
Some people might say it's kind of unbelievable.
They wonder, what is this new power that does all these extraordinary things?

Missing the Point about Pennsylvania’s Nuclear Plants

A group that includes oil and gas companies in Pennsylvania released a study on Monday that argues that twenty years ago, planners underestimated the value of nuclear plants in the electricity market. According to the group, that means the state should now let the plants close.


The question confronting the state now isn’t what the companies that owned the reactors at the time of de-regulation got or didn’t get. It’s not a question of whether they were profitable in the '80s, '90s and '00s. It’s about now. Business works by looking at the present and making projections about the future.

Is losing the nuclear plants what’s best for the state going forward?

Pennsylvania needs clean air. It needs jobs. And it needs protection against over-reliance on a single fuel source.

What the reactors need is recognition of all the value they provide. The electricity market is depressed, and if electricity is treated as a simple commodity, with no regard for its benefit to clean air o…