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Greenpeace’s Economics of Nuclear Power

Greenpeace International recently issued a report titled “The Economics of Nuclear Power” (pdf). The four analysts (commissioned by Greenpeace) pulled cost information from 12 recent studies, analyzed how they differed, and even got into the breakdown and makeup of nuclear’s cost components. They discussed all the different reactor technologies and kept Greenpeace’s anti-nuclear spin to a minimum. Facts are facts and writers should not have to spin facts to bolster their arguments.

With that being said, I have a few problems with the study. There are some contradictions in the report; it is a bit careless with the data; and the authors apparently have not fully thought out their alternative solutions.

Contradictions in the Report
From the press release:

A new report published by a team of international energy and economic experts…conclusively proves that nuclear power is neither a practical nor economically viable solution to tackling climate change.

I read the report before I read the press release and from my reading of the report, it does not conclude with the above statement. Here’s what the report concluded (p. 49):
Hydro electricity and wind energy are expected to deliver the biggest increases in electricity production by 2020 – roughly 2000 TWh in each case, depending on the growth rate in wind. Each of these technologies is expected to deliver electricity at around €40-50/MWh, which is likely to be competitive with nuclear, gas and coal – although this depends on the price of carbon by that time…
So based on this conclusion, nuclear is already economically competitive with gas and coal, and hydro and wind will be competitive with nuclear, gas and coal sometime in the future. Did Greenpeace even read the report they commissioned? Apparently not, because the report concluded that nuclear power is currently “economically viable” with fossil fuels. Not the other way around like their press release states.

P. 21:
...from the late 1980s onwards, the nuclear industry worldwide has made strenuous efforts to improve performance. Worldwide, load factors now average more than 80%. The USA has an annual average of about 90% compared to less than 60% in 1980…
Hmm. The press release states nuclear plants have “poor reliability” but the report says we have strenuously improved performance. It looks like Greenpeace wrote the press release before the report was even written, then didn’t bother to read what they paid for.

On page 8, the report provides a table on the “Construction time of nuclear power plants worldwide.” The period of reference in the table moves in 6 year increments yet skips the period 1989 – 1994. Oops.

On page 30 is Table 2.2 which compares the cost components of the 12 recent studies of nuclear. But it neglects to indicate the monetary year in which costs are given. Is it in 2005 euros? 2006 euros? 2000 euros? All the studies were released in different years and so when comparing studies, the authors need to adjust the figures for inflation. The chart is meaningless if costs are not adjusted to a common year.

On page 42 and 44 the reader will find that Table 4.1 and 4.2 are actually the same tables with apparently different sources. Oops again.

This is nitpicking on my part but if we’re discussing economics I would make sure my data is impeccable.

Too Much Time Spent on Olkiluoto
Part 3 begins with a three page analysis of the Olkiluoto reactor currently under construction by Areva in Finland. For those who do not know, the reactor is an Evolutionary Power Reactor (EPR) rated at 1,600 MW. The Olkiluoto project is the first EPR to be constructed, and the U.S. and France are looking to build several more. The reason why it is highlighted in this report (as some of the readers here I’m sure can guess) is that startup has been delayed by about a year and a half.

The 1,600 MW reactor was originally projected to take about 4 years to build. It is now about 1.5 to 2 years behind schedule therefore taking 5-6 years to construct. Considering that it will be the largest reactor in the world when finished and is the first of its kind, I think a 6 year construction period is pretty good compared to nuclear power’s construction history. Let’s wait and see when the plant is finished.

The thing to keep in mind about Olkiluoto is that it is one reactor under construction out of over 500 reactors that have been constructed in the world. And it will not be the last reactor to be built.

Let’s not forget that the nuclear industry isn’t the only industry that experiences delays and cost overruns during construction. For instance, take the Mackenzie gas pipeline which will run from Canada to the U.S.:
Imperial Oil Ltd., the lead partner in the pipeline project, said Monday costs to build the pipeline and a gathering system and develop three anchor fields escalated to $16.2-billion, from $7-billion predicted in 2004. The company also said the startup date for the pipeline will arrive no sooner than 2014, three years later than had been anticipated.
Wow, their price for the pipeline more than doubled and the start up date increased by three years. Does this delay mean though we should stop building all gas pipelines because this project is experiencing a construction delay?

The Alternatives
What I look forward to most about reading this type of report are the alternative solutions brought forth. “The Economics of Nuclear Power” (pdf) cites another Greenpeace report as the primary source for information about alternatives. That report, entitled “Energy Revolution: A Sustainable World Energy Outlook” is summarized in Annex C of the Economics report. According to the report:
Renewable Energy will deliver nearly 70% of global electricity supply and 65% of global heat supply by 2050.
At the same time the report says the world will be able to cut CO2 emissions by almost 50%. How are they going to do this you ask? P. 57:
The phasing out of nuclear energy and rising electricity demand will be met initially by bringing into operation new highly efficient gas fired combined-cycle power plants…
Greenpeace’s plan is to rely on more fossil fuels in order to phase out nuclear energy. But it also plans to reduce emissions by about 50% by 2050. I wonder if they know that gas plants emit CO2 and nuclear plants do not. This plan is backwards. P. 57:
wind will be the most important single source of electricity generation
As wind technology advances, its capacity factor could gradually increase from its current 30%. But the wind doesn’t always blow and according to the report on page 48:
Wind, wave and solar energy are variable, and generally unpredictable.
So this begs the question, can the world run on an “unpredictable” source of energy? My opinion: not if people want to live prosperous lives.

P. 57:
The installed capacity of renewable energy technologies will grow from the current 800 GW to 7,100 GW (emphasis mine) in 2050.
The world needs to build an additional 6,300 GW of renewable capacity in 43 years. Wow. That’s equal to building 147 GW a year or 1 GW every 2.5 days of renewable capacity. One gigawatt is the average size of a current U.S. nuclear plant. So the report wants to build the equivalent renewable capacity of one nuclear plant every 2.5 days. I wonder what the IEER thinks of Greenpeace's plan since it gawks at the idea of nuclear plants being built "more rapid than one a week." (pdf)

I’m not saying that it can’t be done though. What I want to point out is that current worldwide nuclear capacity is 370 GW (pdf) versus renewables’ 800 GW. Yet they are roughly providing the same worldwide energy contribution (see chart below).

This should tell readers that we would need twice as much renewable capacity as nuclear capacity to provide the same needs. So if we need 6,300 GW of renewable capacity, that means we really only need 3,150 GW of nuclear capacity to do the same thing.

What about costs? The Greenpeace report states that hydro and wind will be economically competitive with nuclear, coal and gas. So if renewables are around the same price in the future as nuclear and you need twice as much renewables to match the same output as one nuclear plant, then we’re talking about twice as much money required for renewables then for nuclear. It appears the report is so concerned about the costs of nuclear they fail to realize how much more it will cost to implement 6,300 GW of renewables vs. 3,150 GW of nuclear for the same output.

Wrap Up
Before the report analyzed 12 different studies, it noted that “a forecast is only as good as the assumptions that go into it.” That’s the key. All we are doing here are making assumptions. To conclude that nuclear plants are uneconomical is premature. The simple fact is this: there are 436 nuclear reactors currently operating in the world (pdf). If they weren’t economical, then they wouldn’t be operating.

After about a 10-15 year lull in new nuclear plant construction, the world is going to give it another shot. We already know how to make these plants safe and efficient. The key now is making them economically better than the alternatives. And only time, not Greenpeace reports, will tell if nuclear can compete. Nuclear power is too good of a technology to stop using. We’re talking about harnessing the atom after all. I mean how cool is that?


Matthew66 said…
I would love to see a study that analyzes all the nuclear power stations that have been built. For each station I would like to know:
1. Original projected cost and construction period.
2. Actual cost and construction period.
3. If actual is different to projected, an analysis of the variance.
4. Lifetime plant capacity factor.
5. For units that have been shut down, whether the shutdown occurred earlier than originally anticipated, and if so the reason for the early shutdown.

My suspicion is, that the majority of the 440 operating power reactors (and for that matter the shut down reactors) were delivered on time, and on budget, and operate as projected. We tend to be told, ad nauseum, about cost overruns and poor performance, I would like some perspective on those pontifications.
Anonymous said…
Good analysis. However, I would take issue with the statement "As wind technology advances, its capacity factor could gradually increase from its current 30%."

Actually the converse is more likely. Capacity factor will decrease as wind installations increase in number. As windmills begin to dot the landscape, they will have to be places in less than optimum locations. Also, although the unpredictable wind output is required by regulation to all be used, as the wind share increases, it is more likely that there will be no market for some of the output and wind capacity factor will fall due to necessary shutdowns and rollbacks.
Anonymous said…
So greenpeace is now a hydro advocacy group?

I'm making the conjecture that they are lumping hydro and wind together because the output of wind is trivial, but hydro isn't. Hydro is tapped out and not useful for significant new source of generation. Wind power is growing at a rapid rate, going from very very trivial to very trivial.

With a slight of hand, they are trying to convince people that wind growth can amount to something relevant.

- Matthew B
Anonymous said…
Don't forget that there are so-called "environmental" groups out there advocating the destruction of hydropower as well. What was the one group agitating for the "removal" (i.e., demolition) of the dams on the Columbia Rver to restore the natural run of salmon? There was another group pushing for the "removal" (blowing up) of the Glen Canyon Dam as well.

Anyone who advocates increased hydropower in the face of this reality has to be a wolf in sheep's clothing. They aren't interested in clean energy, they're interested in no energy.
Anonymous said…
I'm waiting for Greenpeace to write a companion report "The Economics of the Toyota Prius" comparing the cost of carbon abatement by driving a Prius, compared to driving a Corolla and spending the difference on replacing a bunch of lightbulbs with compact fluorescents.

All snark aside, it's really an irrelevant question when it comes to the core issue of whether private companies should be permitted to build nuclear power plants. It's the government's job to make sure the plants are run safely, not to second-guess the investors on whether it's a good deal for them or not.

By the way, anonymous, there are some pretty reasonable arguments to suggest that at hydropower can be a bad idea a lot of the time.
Anonymous said…
I'm not arguing the merits of hydropower, I am pointing out the hypocrisy of those in the "environmental" movement who on the one hand tout reports like this one that extol hydropower as a replacement for nuclear, then turn around and advocate the destruction of facilities like Glen Canyon and the Columbia River projects. In typical fashion, they want it both ways.

It reminds me of the "environmentalist" fervor of the late 1970s for cogeneration and waste-to-energy schemes. My town fell for their trash-to-energy scheme and spent hundreds of millions of taxpayer dollars to build a trash (cash?) burning power plant. It ran for a few years and then the very same environmentalist wackos sued the county to get the plant shutdown because supposedly it was released "too many" effluents. Well, duh, when you burn something, you get smoke and gases. Just this past year the whole plant was bulldozed into the ground, along with the hundreds of millions of dollars the taxpayers spent on it, all because of the environmentalist wackos.
Anonymous said…
Just the usual misdirection I'm afraid. Hydro dominates the "renewable" wedge and makes it look big, but hydro cannot be scaled much further in the developed world. Comparing capacities and not, say, terrawatt-hours/year, ignores the low capacity factors of solar and wind. The last straw is hand-waving about intermittency. Even if we decide to max out on renewables despite the higher costs, we still need to have a plan for how the resulting grid will continue to be reliable, and need a source for the portion of the grid that maintains that reliability.

The idea of burning more nat gas to facilitate shutting down nuke and coal plants is laughable. Gas is going to deplete way faster than coal. Plus we are already in depletion in north america and activists oppose LNG imports, so where's the gas going to come from?

The real agenda is energy starvation. Presumably, to bring about a move backward that would clearly not have popular support if overtly stated. Accompany it with a blame game where shortages and price spikes are blamed on the energy industry. Well, the bluff will be called, the activists and their political dupes will have to deliver on their vision. Reality will win in the end - it always does.
Anonymous said…
If anyone is interested, here are a couple of links from environmental groups that favor dam removals:

- Wild Salmon
-American Rivers
Anonymous said…
Yes, I notice how the Brits learned that reality has a way of coming around and biting them in the a$$. I hope they've learned their lesson about dependence on Russia for NG supply. They sure got the sense knocked into them on that one. Just a cold winter here and there and the threat of Russia cutting off supplies to the West is enough to sober you up quick.

I was thinking about the intermittent supply of wind just the other night. It was dead calm still, a warm, muggy night. Just sweating it out until I flicked the switch for the good old A/C. Came right on, ran all night, made it very easy to get some much-needed rest. I doubt that would have been the case if we were dependent on (local) wind-generated supply.
Anonymous said…
So to sum up David, this report basically states that fossil and nuclear are broadly on level terms today, but renewables will catch up in future.
Joffan said…
Doug, I suppose it's possible that there is an "inner circle" in Greenpeace (or...) that wants energy starvation, but I think it unlikely. This runs against my long held belief that conspiracy is much rarer than incompetence/ thoughtlessness, especially when there is little to gain.

I'm confident that most Greenpeace activists do not want the lights to go out and (more importantly) the factories to close. They have simply not grasped the true scale of the energy production now and (even more so) in the the future for the possibility of maintained or improved conditions throughout the world. They may not have made the connection between energy shortage and poverty. They do not allow the possibility that energy efficiency tends to bring increased usage more than reduced energy needs.

And of course, they are used to painting nuclear as blackest evil, an abomination. It's a hard habit to break I guess.

Having said which, there is certainly plenty of deliberate spin put on "renewable" energy discussions. Some forgiveable - you want to attract interest, investors - and some simply to defend entrenched positions.
Anonymous said…

The northwest dams most opposed by the fish advocacy groups are the four lower Snake River dams: Lower Granite, Little Goose, Lower Monumental and Ice Harbor. Just google "lower snake river dams" and many websites will pop up advocating the removal of the dams.

Most aren't proposing blowing it up, just removing the earth fill wings and allowing the river to flow around the dam.

One dam has 603MW and the rest have 810 MW output with a capacity factor of about .35, making them comparable in output to about 1 1/2 to 2 large nuke units.

These four dams do little for flood control or irrigation storage. They are for generation and barge passage only. They are the upriver most four in the line of dams support barge traffic.

If I could be assured of two things, I'm all for taking them out:

#1) Two new large nuclear units are finished and put on the northwest grid. Partially completed WPPS #1 & #4 are nearby and would be good canidates.

#2) All displaced barge traffic goes on the rails or pipelines, not onto trucks.

Matthew B.
Anonymous said…
Matthew B., on your second proposal, what would that do to the price of delivered goods/commodities in the area? My understanding is that barge shipment is the most economical because of load size. Is the infrastructure in place to take on the displaced barge loads? Pipelines, railroads, etc. don't just happen, they take time to plan and build. If it requires any kind of new construction, especially of pipelines, I'd be skeptical of being able to do so unimpeded. The NIMBYs and BANANAs will come crawling out of the woodwork. In my state alone, an oil company has been trying for going on 10 years now to site a pipeline to run from the next state south of here to a terminal on the Great Lakes. No dice. The environmentalists are chaining themselves to trees all along any proposed route. Given the political climate in the NW, I doubt if we'll see a revival of the mothballed nuclear plants. I recall when Governor Locke was asked about what his plans were to increase energy supply in Washington State, his reply was, windmills. Pretty much of a Moonbeam, IMO.
Anonymous said…
Here is how "environmental" gangs really deal with hyro power:
"A federal appeals court has again rebuffed a Fairlawn company that wants to
build a hydroelectric power plant in the Gorge Metro Park. The 6th Circuit
Court of Appeals in Cincinnati ruled that Metro Parks, Serving Summit County,
is within its rights to block Metro Hydroelectric Co. from conducting tests on
park property. The judges ruled against the company last April, but Metro
Hydroelectric sought a reconsideration. It wants to build the plant on the
Cuyahoga River between Akron and Cuyahoga Falls at the 57-foot-high Ohio Edison
Co. dam. The project has been opposed by the park district and an array of
local communities, agencies and environmental groups."
(OHIO.COM, MAY 30, 2007)

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