Renewables are cheaper than Nuclear – final chapter?
The nuclear power industry has changed it’s marketing approach recently. New nuclear reactor construction prices are so high that the contracting construction companies have had to negotiate sweetheart deals guaranteeing artificially high prices to insure their profitability. The most recent example of this is Hinkley C in the UK.
George Monbiot is an influential environmental columnist for the UK Guardian. He is normally pro-nuclear. But of the proposed Hinkley C reactor he writes:
Nils Pratley warned in the Guardian last week that “if Hinkley Point’s entire output is tied to the rate of inflation for 40 years, we could be staring at a truly astronomical cost by the end of the contract.” The City analyst he consulted reassured him that “the government surely can’t be that dumb”. Oh yes? Payment to the operators, the government now tells us, will be “fully indexed to the consumer prices index”. Guaranteed income for corporations, risk assumed by the taxpayer: this deal looks as bad as any private finance initiative contract.
That’s not the only respect in which the price is too high. A fundamental principle of all development is that we should know how the story ends. In this case no one has the faintest idea. Cumbria – the only local authority which seemed prepared to accept a dump for the nuclear waste from past and future schemes – rejected the proposal in January. No one should commission a mess without a plan for clearing it up.
But EdF/Areva has learned it’s lessons in new construction building in France and Finland. Both of these reactor projects started estimated at about 3 billion Euros and are now years late and over budget at about 8.5 billion Euros per reactor each.
Instead of under bidding the UK reactor by huge amounts, they decided to negotiate much closer to their best guess as to what the reactor was actually going to cost, with the highly pro-nuclear British government. They got a pretty good deal. Assuming the new reactor at Hinkley Point is not blocked by the EU for unfair government subsidies, it will be the most expensive nuclear reactor ever built in the world at 17 billion BPS (or US$28.5 billion).
The downside of this clever strategy is that these prices can now be compared with actual costs for operational renewable prices, like those in green energy heavy Germany. This is exactly what energy experts at Agora have done. When the Hinkley Point C proposed reactor costs are contrasted with the actual costs associated with German utility scale renewables they found renewables generate electricity at a rate 50% cheaper than nuclear. Begging the question why would you buy electricity at such a ridiculous price, if your primary reason was to reduce your carbon footprint?
CNN is reporting the same shift in it’s recent article “As nuclear power dies, solar rises“. Which includes this lovely turn around story:
Ironically, Warren Buffett, arguably the world’s greatest capitalist, has emerged as the poster child for this dramatic shift. In June 2013, Buffett’sMidAmerican utility threw in the towel after a failed three-year legislative battle to require Iowa electric customers to foot the bill for the design and construction of a prototype small modular reactor. Mainstream groups like AARP vigorously opposed that fiscally imprudent investment. Earlier, MidAmerican canceled another proposed reactor in Idaho on the grounds it was not worth the money.
What’s significant about this about-face on nuclear by the highly regarded “Oracle of Omaha” is that Buffett instead decided to install656 large wind turbines at a cost of $1.9 billion in Iowa, and has gone “all-in” with multibillion dollar bets on utility-scale wind and solar power and other renewable energy facilities throughout the West.
But the real revolution is happening largely outside the eyes of those who aggregate electricity statistics. It is called “Grid Defection” and it is featured in an upcoming blog post, stay tuned.