Friday, June 20, 2008

The Heritage Foundation on The Costs of Energy

heritagelogo

Our friends over at the Heritage Foundation have been developing quite an interesting portfolio of papers about nuclear energy over the last few months. Their latest is called Critics of Nuclear Power's Costs Miss the Point and addresses the relative costs of nuclear power and its pals in the renewable Club of Heroes, solar and wind.

Writers Jack Spencer and Nick Loris make points we've made here several times over but do a good job of summarizing why it might be that nuclear energy, despite up-front costs that give pause, remains the energy source to favor for emission-free electricity generation (almost sounds like a sale pitch). Here's what they say about some of those up-front costs:

Today, it is very expensive to produce nuclear-qualified components and materials because steep overhead costs are carried by only a few products. Additional production will allow these costs to be spread, thus lowering costs overall. Further savings should be achieved by applying lessons learned from initial construction projects. Because nuclear plants could have an operating life of 80 years, the benefit could be well worth the cost.

John McCain mentioned this the other day in his energy speech and here Spencer and Loris make exactly the point we did: that the potential for industry development around nuclear componentry is enormous.

But what about wind?

Despite efforts to portray these sources as viable alternatives to nuclear power, they have their own problems. They are expensive, intermittent, and inappropriate for broad swaths of the United States. For example, wind turbines are virtually useless in the Southeast, where there is little wind. Even environmental activists are beginning to oppose wind projects because they kill birds, despoil landscapes, and ruin scenic views.

Er, how about solar, guys?

Solar, Inc., the world's largest solar company, recently told investors that its largest market, the European Union, may ban its solar panels because they contain toxic cadmium telluride. To replace the cadmium model with a silicon-based model would quadruple the production costs.

We expect Solar, Inc., will find a way around this, but you get the picture. We're not sure we fully agree with the "all the alternative energy sources have problems, so a pox on all houses" approach here; it's probably fairer to say that all sources of electricity generation present challenges, from construction right up to operation, and it's up to industry, with a nudge from regulators, government and activists, to find ways to solve those challenges.

Nuclear gets the nod in a lot of corners because, in broad terms, it's well understood and has proved its worth in the long term. It's also mature enough to produce electricity less expensively than its cousins.

We cannot nod to our friends over at Heritage without dinging them for a bit of partisan zeal:

Government has no business making any decisions about nuclear power based on costs. Its role should be to provide adequate oversight and fulfill its legal obligations on nuclear waste. It is primarily private companies that produce America's power, and consumers pay for it. Their interactions in the marketplace should determine the best way to meet America's energy needs.

We'd love to believe that government has such a small role to play here; however, when the public good intersects with industrial prerogative, the insertion of government into the mix can be a net positive, welcomed as a counterbalance to the impulse to do what is most immediately profitable - which is where corporations incline, after all. Heritage always seems to assume that if you step one pace away from an unfettered marketplace, Hugo Chavez will be having a ticker tape parade on Fifth Avenue.

Very slight ding, though, on a very good piece. Take a read.

5 comments:

Anonymous said...

Definitely good to see more positive writing about nuclear power, although I do object with their conclusion that "It is therefore difficult to conclude that wind or solar power should be built at all." There are certain places, like the Southeast as they mention, that are not the best places for wind and solar. But the Southwest on the other hand will be a great place for it (solar anyway).
I don't think our prospects are improved when the argument is framed as solar/wind v. nuclear since this is typically the way extremists tend to do it. All of these types of generation have their ups and downs but at the some time think that nuclear will play a much larger role than many are expecting and that evidence from Europe's struggles in utilizing solar and wind are supporting that belief.

Ondrej Chvala said...

Here is my take on why renewables won;t save us - I tried to post it as a comment to GreenOptions, but it didn't pass through, so I post it here:



The "renewables", while useful contribution to the mix, IMHO unfortunately cannot power major part of our grid in a foreseeable future. Most importantly due to their chaotic nature, with available capacity typically 10-30%. I suggest looking up a time profile of a wind or solar plant.

There is no solution to energy storage as yet on the scale necessary. The energy storage proposed by the Grand solar plan, Eurosolar and other is CAES:
http://en.wikipedia.org/wiki/Compressed_air_energy_storage

Unfortunately CAES systems do not scale to GW range as other systems (such as pumped hydro), they are limited to suitable geological locations (perhaps more than pumped hydro), and actually they are not just a storage, but need natgas (as opposed to pumped hydro): "The McIntosh CAES plant requires 0.69kWh of electricity and 1.17kWh of gas for each 1.0kWh of electrical output [1](a non-CAES natural gas plant can be up to 60% efficient therefore uses 1.67kWh of gas per kWh generated."

[NB: CAES depends heavily on both natgas fuel and old used oil/natgas wells. Oil industry must love that. How surprising, isnt it?]

Any form of energy storage is and will be very expensive (and CAES with the grave dependency on natgas is particularly bad), that is requiring large amounts of non-renewable resources, in addition to the non-renewable materials and energy spent on the devices transforming dilute renewable energy flows to usable electricity. A wind mill requires about 5-10 times the amount of steel and concrete as a nuclear power plant, to produce the same amount of electricity. CSP, cheaper than photovoltaincs, but significantly more expensive than wind, will need even more of this on-renewable resources. "Renewables" is a nice catch phrase, but wind mills are indeed (made of) non-renewable resources, as much as steel, plastics (from oil and natgas) and (mostly) coal as a primary energy input.

Back to the problem of chaotic nature of wind and solar: the contemporary solution is matching about 80% of the wind installed generation capacity by
peaking plants which run as spinning reserves when the wind blows (grid regulation is a complicated issue, but this is a typical case unless a grid has major contributions of hydro). Coal and natgas burners are obvious choice, most of their costs are in the fuel.

Unless we come up with some (fantastically) economic for of energy storage, renewables are dependent on fossil fuels, in particular on natural gas. The difference between 1.17kWh of natgas for each 1.0kWh of electrical output with CAES or 1.67kWh of gas per kWh without CAES (assuming we have all the geological locations we need), is not that important, as the amount of energy in known resources of both natgas and oil is similar.

Perhaps a solution could be accommodated by a bunch of small reactors which can vary power output rapidly (such as the Adams Engine engine), constructed nearby wind warms and solar plants. However in this case it would be perhaps cheaper and more efficient to just run the reactors at their maximum capacity compatible with the grid demand, saving all the non-renewable resources and other complications concerning the wind mills...

The hypothetical transition to solar + CAES is therefore a transition from coal to natgas burning, which is even less sustainable than coal, and certainly not affordable: natural gas is the most efficient oil substitute, therefore the prices move along. Natgas now trades above $12/MBTU, while the typical price range assumed for future natgas just a couple of years ago was $6-8 ...

regards
O.

Matthew B said...

But the Southwest on the other hand will be a great place for it (solar anyway).

Only for the economics challenged. Installed systems run at over $8 per watt. The highest estimates for new nukes come in under $5.

At 20% capacity factor (solar) vs. 90% (nuclear) that makes solar 7 times more expensive.

That's also ignoring lifetime. 45 years out of a nuke is proven, with pretty good odds of 60. Solar is an unknown, with at least 25 for the panels, but certainly not 60.

Anonymous said...

I don't think the authors are necessarily trying to pit nuclear against renewables. If the Southwest is a great place for solar, that's fine, but the sun still doesn't shine 24 all the time.

I think the point is that if you have to build nuclear to back up wind and solar, why not just have nuclear and not waste the money building wind and solar? If wind and solar are more economically efficient, then so be it, but I think we all know that's simply not true.

George Carty said...

I think solar power's best application would be for desalination in Middle Eastern Muslim countries.

Such countries may be reluctant to build nuclear reactors for fear of Israeli airstrikes, and desalination doesn't need 24/7 power as one can simply store desalinated water during the day for release at night.