A gate guard at the Fukushima Nuclear Power Plant, April 2011.In the wake of the meltdown last year at the Fukushima nuclear plant, the viability of nuclear power has been called into question yet again. The Japanese government has closed down all but one of the country's nuclear plants (though there are plans to start reopening them), and Germany has abandoned a previous decision to keep existing nuclear plants operating. Concern about nuclear power has also increased in the United States, with most opinion polls now showing a majority opposed to further expansion of the industry.
On the other hand, some commentators have been struck by the fact that the disaster did not cause any direct loss of life and that estimates of the adverse health effects of the radioactive releases are very modest. A striking example is English writer George Monbiot. An opponent of nuclear power before Fukushima, Monbiot has switched to the view that nuclear power should be supported as a response to climate change.
Unfortunately, this debate has taken place without much attention to the economics of electricity production. The critical question is whether nuclear power can be a cost-effective alternative as compared to renewables, investments in energy efficiency or even such long shots as carbon capture and storage. A look at the economic cost of the Fukushima meltdown suggests that the path to a nuclear future is steeply uphill.
Estimates of the cost of the disaster vary widely, but the final bill seems sure to exceed $250 billion. That allows for the total loss of the six reactors at Fukushima I (and probably also the four at Fukushima II), along with a multi-year effort to make them safe, the displacement of one hundred thousand people from the surrounding district and the economic cost of a disruption to electricity supply that has already lasted more than a year. Some estimates are as high as $650 billion.
Even the lower estimate amounts to around $5 billion for every nuclear plant in Japan. A sound economic analysis of the cost of nuclear power would include an allowance for the possible cost of disaster. If we estimate, say, five thousand hours of availability per year and impute 10 percent of capital (including depreciation), an allowance of $5 billion per plant would raise the cost of electricity by 10c/kWh, before even considering construction and operation or the cost of transmission and distribution. Fukushima has turned Japan’s decision to rely on nuclear power from a costly but defensible investment in energy independence to an economic disaster.
There doesn't seem to be any way around this. Retrofitting existing plants to protect them against a similarly large tsunami looks unaffordable. Even imposing such a standard on new plants would make them unaffordable, given that the economics were already marginal at best before Fukushima. So Japan has little choice but to move away from nuclear power as fast as possible.
How does this analysis extend to the rest of the world? Almost certainly, a similar calculation done for the former Soviet bloc would yield the same conclusion—the costs of Chernobyl alone are sufficient to make the entire industry an economic failure (and, of course, in that case there was massive loss of life as well). The same analysis would apply to any developing country where safety standards are compromised by a lack of effective enforcement.
For North America and Europe, the story is a bit more complicated. Safety standards have been much better than in Eastern Europe or the developing world, and the risk of a massive tsunami is (mostly) specific to Japan. Still, the cost of these disasters undermines the commonly held view that nuclear power has been unfairly hobbled by excessive concern about safety. Given the costs of a full-scale meltdown, it seems likely that the necessary precautions will add billions to the cost of a typical (say 1 gigawatt) nuclear plant, and even then the remaining risk (expressed in terms of expected cost per plant, as above) will be substantial.
The strongest point that the advocates of nuclear power can make is that the outcome of a similar analysis applied to coal-fired power generation is at least as bad. While coal-fired plants don’t fail catastrophically, their routine operations cause massive health costs through the release of sulfur dioxide, mercury, particulates and even radioactive nucleotides in coal ash.
A study by economists Nicholas Muller, Robert Mendelsohn and William Nordhaus (who are anything but environmentalist zealots) has estimated the cost of the adverse health effects of coal-fired power at over $50 billion per year, which is several times the value added in the industry. If these health costs are combined with a reasonable estimate of the costs of carbon dioxide emissions (say $50/ton) the addition to the cost of coal-fired power would be around 10c/kwH, about the same as the cost associated with nuclear meltdowns.
Both nuclear and coal-fired electricity have appealed to policy makers because they appear to offer reliable cheap power. But when the full costs are taken into account, these technologies are far more expensive than available alternatives, including natural gas, wind power and the often-neglected option of improvements in energy efficiency.
John Quiggin is a Federation Fellow in economics at the University of Queensland, Australia, and an adjunct professor in the Department of Agricultural and Resource Economics, University of Maryland, College Park.
Comments
Largely agree with all this. I'd put less emphasis on gas, and more on residential PV.
I can't fault the proposition that renewables and investment in energy efficiency should take a higher priority than nuclear power. On the other hand the possibility of carbon capture appeals about as much as the thought of "free energy devices" - not at all - except in so far as, for example, a retrofitting to existing coal power plants of something like an algal biofuel facility could be a good way of doubling the fossil plant's carbon efficiency until the time it can be retired completely.That being said I don't believe nuclear power is treated fairly when too much extrapolation of failure risk is made from single examples like Chernobyl 25 years ago or the only major accident since then that I'm aware of, Fukushima. Two catastrophic failures in the history of the industry seem too few from which to draw meaningful conclusions, and I also feel that unwarranted hysteria over the realistically low risks of radiation accidents adds unnecessarily to the safety hurdles - and hence the cost - faced by nuclear new technology proposals.I'll repeat thought that I agree that nuclear options are in most cases currently less worthy than conservation and energy efficiency improvements and renewables.
@Frankis Small samples are a problem. But as well as these two disastrous accidents there have been a fair few near-misses, most notably Three Mile Island.
John: Three Mile Island I think adds a data point to the opposing argument. There've been no deaths or injuries recorded in the official history of the event and the plant is still operational, only the melted core of the one reactor has been removed. This ought I think to weigh in favour of the safety of nuclear power against the hysteria of the overreaction to Fukushima. I don't see much wrong in a glance at Brian's comment above, it seems to me that the best characterisation of media reporting since the serious Fukushima incident is "hysterical". No members of the public are known to have been injured by the nuclear accident while 20,000 were killed by the tsunami. That so many people have been evacuated from surrounding lands, abandoning their pets and livestock to horrible deaths in the process btw, I would argue has more to do with media beaten-up hysteria than science or healthcare considerations, despite Fukushima having been an example of a disastrous nuclear power screw-up by the plant operators.
@Frankis. TMI should lower our cost estimate conditional on a meltdown starting, but raise our estimate of the likelihood of that event.
Whether or not the reporting was hysterical, the costs of stabilizing the plant are real. On the radiaton risk, can you point to evidence that the government has been overly panicky. This NY TImes story suggests not - the radiation levels are far above those that are normally considered safe,
http://www.nytimes.com/2011/08/22/world/...
John:I think the gulf between differing opinions on the risk of nuclear power is too great for much in the way of rational blog debate, as I think you argue yourself while hosing down bunfights directly or indirectly related to the nuclear topic. There's no agreed set of facts between camps on pretty much anything and then there's the media doing a variable job of reporting. For instance considering the case of the catastrophe at Chernobyl and bearing in mind the popular mythology as promoted by Greenpeace and others, the official UN-endorsed report includes:
Note btw that the same report states that the cure rate of thryroid cancers has been better than 99%. Also see the brief WHO gloss on that report which includes this:
In the Fukushima case I don't see any good reason to believe most of the reporting on the scale of the problem of radionuclide contamination of surrounding land - as usual the reporting is mostly scientifically illiterate. Thus a high reading from a radiation detector becomes newsworthy absent any context as to how indicative of the wider area is the one reading, what was the actual source of the radiation, and so on. It's not as though one can't walk around anywhere in the cities and densely populated areas of the world and find radiation hotspots having no relation to power plant accidents. Also it's a farce isn't it when a natural disaster of enormous scale in Japan that kills 20,000 members of the public directly, none as a result of damage to a nuclear facility, frightens Germany into shutting down its own nuclear reactors? When I read this JapanTimes story from last month http://www.japantimes.co.jp/text/nn20120... I find it confirms my prejudices about the low risk of harm occasioned to people by the Fukushima nuclear accident and that there's an overreaction to the risk involved in returning to lands, even those currently in the 20km exclusion zone. Others reading this same story will take a far different view!
Unfortunately, I couldn't get anything straight from the Japan Times story, which would be consistent with your view.
But the NY Times story gives the information that the Japanese government is working on an acceptable level of 20millisieverts per year, which (according to Wikipedia) is the average limit for workers in nuclear plants. That doesn't seem like a hysterically risk-averse policy to me.
And, at least one location 2km from the plant is cited as having an exposure of 500ms/year. So, your case relies on an implicit claim that current radiation standards are drastically wrong. Maybe that's true, but it's scarcely hysterical for people to rely on the official standards
As you mention, this isn't a topic where evidence has much of an impact, and I have to say you haven't responded in any serious way to the analysis in my article. If you think it's wrong, you ought to say why. Note that I acknowledge your point about the absence of fatalities in the article, and accept other points. It remains true that the economic cost of these disasters is massive and there's no obvious way of reducing them. That in turn makes nuclear an economic non-starter, even without any emotional overreactions.
John: I think the evidence of cases like Chernobyl and TMI, as well as Hiroshima and Nagasaki and the famous cases like the radium watch dial factory workers all suggest that the present government standards in most countries not just Japan are very conservative. A proposed standard loosening in Japan to 20mSv/year is a large change. It's a normal level for nuclear plant workers I think. Otoh I don't believe there's any epidemiological evidence at all of radiation health effects in plant workers exposed even well beyond that level. The linear no-threshold model is the one we have while we're having no good model, and that's just that. I think 100mSv/year is closer to the level at which epidemiologists find the first good datapoint for the LNT model in the beginnings of statistically valid increased health risk (I think, from memory - I may be wrong). As you note the differences between opinions of the media coverage of such events is great. My opinion is that media coverage of the nuclear accident in Japan has been on average "hysterical". That's of course a function of the media I've been exposed to, that I've gone voluntarily looking for, my own judgments of the merits of various things, and so on. I offered the Chernobyl example to contrast the Greenpeace style of reaction to that event, where I believe the perception is of high hundreds of thousands to millions of "casualties", with the UN and WHO endorsed estimates of less than a hundred deaths to date. I don't think the German governemnt shut down reactors because German media has reflected the UN/WHO understanding of the consequences of Chernobyl.<br>I think the economic case against nuclear is negatively affected by an atmosphere in public debate of "hysteria", no doubt actively encouraged by proponents of coal-burning and by innumerate, well-meaning greenies such as many of my friends Thus, I agree with your argument. <Why the h**l is it impossible for me to get a paragraph break inserted in this text?! No button is offered on the menu, double carriage returning doesn't work, nor does HTML <p> or <br> - irritating! >
Economic analyses make sense in context, or not. An argument for cheap labour supplied by slavery is pointless in the modern western world; elegant debate by an Islamic group over the capital cost of setting up a supply of Korans for every hotel room would be unrealistic as long as the contextual society would only tolerate Gideons' bibles; arguing an economic case for Sweden to replace nuclear power with coal or oil wouldn't go as well as the same argument would fly in Australia (I rely a little on Wikipedia for this http://en.wikipedia.org/wiki/Nordic_ener... ) <par><p><br><cr><FFS! can't get a paragraph in Firefox or Opera> Thus I entirely agree with your analysis.