Nuclear Power Subsidies: Are They Worth It?

Here is a paper that I wrote in April of 2019 for my English 102 course. It examines the merits of nuclear power as weighed against other power sources in an attempt to answer the question of whether or not tax money should be spend to subsidize the industry. It will be incorporated into my upcoming expanded dissertation on nuclear power which I will call, “Nuclear Power: History Harm and Hope.” It will be about the history of nuclear power, from the first stars to the modern day industry, the harm the industry has caused, and whether or not their is enough hope for improving the industry to justify its continued existence. As you might expect, it will be very lengthy. Anyway, I hope this current essay on nuclear power subsidies will be thought provoking and please tell me what you think down below and in the forum, because that will help me with my final dissertation. Thanks!


Introduction

Today, nuclear power is a huge industry, the most visible part of which is 450 nuclear reactors around the world. Together they supply eleven percent of global electricity demand (“Nuclear Power”). However, it was not always this way; nuclear power is a relatively recent development compared to other energy sources. The first nuclear reactor to deliver electricity to the power grid began operating in the Soviet city of Obninsk in July of 1954 (“History of Nuclear Energy”). On September 2, 1957, the Price-Anderson Act, designed to limit the liability incurred by nuclear power plant licensees from possible damages to members of the public, attained force of law in the United States. This first of nuclear power subsidies was intended to attract private investment into the nuclear industry. (“Backgrounder on Nuclear Insurance”).

Since then, subsidies in various forms have continued. One form of subsidy that the nuclear industry receives comes in the form of research and development funds. Out of the total energy research and development fund of International Energy Agency (IEA) member countries of about 12.7 billion USD, nuclear power received twenty percent in 2015; one third the 1975 figure (“Energy Subsidies”). Other subsidies can be categorized as follows: output-linked, production factors, risk and security management, intermediate inputs, and emissions and waste management. Output-linked subsidies grant financing based on power produced. Subsidies to production factors help cover construction costs. Risk and security management subsidies shift liability for accidents either to consumers or the government. Intermediate input subsidies lower the cost of obtaining resources necessary for generating power such as fuel and coolants. Emissions and waste management subsidies either partially or completely shift the cost of waste disposal from investors to the government, and ultimately to the taxpayers. (Koplow 12-13).

Examples of such subsidies can be found in every aspect of nuclear power in the form of federal loan guarantees, accelerated depreciation, subsidized borrowing costs for publicly owned reactors, construction work in progress (CWIP) surcharges to consumers, property tax reductions, subsidized fuel, loan guarantees for enrichment facilities, priority access to cooling water for little to no cost, no responsibility to cover costs of potential terrorist attacks, ignored proliferation costs, lowered tax rates on decommissioning trust funds. (Koplow 5-8).

Despite such subsidies, during a period from 1970-2002 nuclear power underwent a “brown out” in which demand for reactors declined and previous orders were cancelled (“History of Nuclear Energy”). However, policy makers around the world are now in search of a sustainable, reliable, low-cost, limited carbon and secure power source to address the global energy crisis. Because of concerns about conventional energy sources like coal and oil, the need to stabilize harmfully volatile energy prices, and a growing fear of global warming, nuclear power is being considered as a possible answer to global energy exigencies (Sovacool, “Second Thoughts” 3).

Furthermore, an effective and well-organized effort to increase public investment in nuclear power to unprecedented levels is ongoing (Koplow 11). Nuclear power is receiving strong support from organization like the US Department of Energy (DOE), the International Atomic Energy Agency (IAEA), and the International Energy Agency (IEA) (Sovacool, “Second Thoughts” 3).

Despite all of this support, it is clear that governments should discontinue current subsidies and scrap plans for new ones, because they entail use of taxpayers’ money to forward an inefficient and risky solution to a problem that could be better addressed by renewable technologies.

Concerns about nuclear Power

Reliability

            The first concern is that nuclear power plants are subject to various phenomenon that can disrupt their power output, damaging their reliability. For purposes of this paper, reliability will be assumed to mean the ability of a power plant to consistently produce power without unpredictable disruptions in power output. The reliability of an energy source depends on the reliability of intermediate inputs, what keeps the power plant running, and the likelihood of failure. The most important intermediate inputs for nuclear reactors are water for cooling and, of course, fuel, i.e. uranium. A lack of either of these two things would cause a nuclear reactor to stop functioning. This means that during drought a nuclear reactor might be forced to shut down, as water consumption of even a single reactor is immense, amounting to 115 million liters per day (Sovacool, “Second Thoughts” 7). The reliability of uranium fuel supply varies from country to country depending on level of uranium fuel self-sufficiency. For example, China imports about eighty-eight percent of its uranium from other countries. This factor is significant because thirty percent of the global uranium supply comes from countries such as Uzbekistan that have a climate of political instability (Sovacool, “Second Thoughts” 5). Since the very nature of droughts and political unrest consists of unpredictability, nuclear power will necessarily be subject to some level of unpredictable disruptions in power output.  

           Other natural phenomenon can disrupt nuclear power plant operation, as well. A 15-metre tsunami caused by a magnitude 9 earthquake off the Eastern coast of Honshu island shut down power and cooling to three reactors at the Fukishima Daiichi nuclear site on March 11, 2011, causing all three reactor cores to melt down over next three days and release 940 PBq radiation, giving it a 7 on the International Nuclear Event Scale (INES). 100,000 were evacuated from site, of which 1,000 died as a result of extended evacuation. (“Fukishima”). According to Swiss bank UBS, this catastrophe was more damaging to the reputation of nuclear power than the more severe Chernobyl nuclear disaster in 1968, because it occurred in Japan, a highly developed economy (Paton 2011). Thus, it is unclear if nuclear power will ever become reliable.

Sustainability

            The second concern is that nuclear power is highly unsustainable. For the purposes of this paper, sustainability will be measured as the ability of an energy source to provide power over the long term. For nuclear power plants, sustainability, then, mainly depends on the long-term availability of uranium at a sufficiently low cost so that energy expenditures on refining do not exceed energy generated. According to a 2003 interdisciplinary MIT study, there is enough uranium to fuel 1000 new reactors for forty years (Beckjord et al. 4), leaving no sustainability issues for nuclear power in the near future. However, this figure does not include an important factor: the quality of the uranium. As uranium ore quality decreases, energy costs to extract increase exponentially (Storm van Leeuwen 23). Factoring in uranium quality, energy expert Benjamin K. Sovacool estimated that global uranium reserves could only sustain a two percent increase in nuclear power production and would disappear after a mere seventy years (“Second Thoughts” 6). Furthermore, the most economical uranium ore deposits have already been discovered and nearly all are currently being mined. New deposits such as these are very unlikely to be discovered for many geologic reasons. (Storm van Leuuwen 71). Additionally, nuclear power may become a non-viable option if climate change significantly increases water demand, since according to energy researcher Doug Klopow, nuclear power is “the most water-intensive large-scale thermal energy technology in use” (7). Another sustainability concern for nuclear power plants is waste disposal. Health and environmental risks posed by spent fuel from nuclear reactors last for tens of thousands of years (Beckjord et al. 22). To date, even the authors of the favorable MIT study admit that “no nation has successfully demonstrated a disposal system for these nuclear wastes” (22). This highly questionable sustainability is linked to the economics of nuclear power.

Monetary cost

           The third concern is that nuclear power is very costly compared to many alternatives. According to the MIT study, “The U.S. public is unlikely to support nuclear power expansion without substantial improvements in costs and technology” (6). Nuclear power is the fourth most expensive energy source, not even considering costs of waste storage, decommissioning, interest on loans, and power transmission infrastructure construction costs (Sovacool, “Second Thoughts” 4). In uncontrolled markets nuclear power is uncompetitive with natural gas and coal (see table 1) (Beckjord et al. ix).

Table 1. Comparative Power Costs (Beckjord et. al. 7).

Even with proposed cost reduction such as in construction, nuclear power still trails behind combined cycle gas turbine (CCGT) power with favorable fuel prices. Many renewables also beat the price of nuclear power. According to data from the Energy Information Agency (EIA), the unweighted average levelized cost of electricity (LCOE) for nuclear power in 2018 is 7.75 cents/kWh, with the lowest LCOE being that of geothermal power at 3.83 cents/kWh (“Levelized Cost”).

            Furthermore, these are only the known and easily quantifiable costs of nuclear power. For example, it is hard to quantify the environmental cost nuclear power. It kills much wildlife through water filtration and contamination (Sovacool, “Second Thoughts” 6), as well as creating such damage at certain sites that environmental remediation expenses sometimes exceed value of ore extracted at uranium mills (Koplow 6). Even without considering environmental factors, economic challenges facing nuclear power include a competitive generation market in which investors will bear risks of permit obtention and construction and operating  cost uncertainties, unpredictable operation and construction costs, political and regulatory challenges associated with obtaining a permit, and certain risk of plants being cancelled (Beckjord et al. 37-38). None of this factors in the cost of nuclear accidents, either, which some have estimated can exceed 100 billion USD, such as Fukishima. It is no wonder, then, that without government subsidies such as the 70 billion dollars spent to defray excess capital costs in recent years and free nuclear waste disposal services, no commercial reactor could ever be successful (Bradford 14). And whatever the true cost of nuclear power, it will always be very volatile. According to Sovacool, “Lack of certainty about the availability of uranium is likely to fuel price spikes which will increase the production costs of nuclear energy” (“Second Thoughts” 6). Since uranium prices on which nuclear power prices are dependent are highly volatile, nuclear power is unlikely to stabilize energy prices, especially considering the climate of political instability in countries such as Uzbekistan that account for thirty percent of current Uranium production (Sovacool, “Second Thoughts” 5). But even with this high cost it is worth considering whether nuclear power is worth retaining to help battle climate change.

Emissions

            The fourth concern is that nuclear power produces significant carbon dioxide emissions. This is contrary to the claims of some that nuclear power is carbon-free (Beckjord et al. 2). This common misconception arises from the fact that nuclear reactors themselves produce no emissions, but if one includes the entire nuclear fuel cycle in the calculations, this misconception is exposed. One estimate ranked greenhouse gas (GHG) emissions for power plants per unit of electricity generated in order of highest to lowest: industrial gas, lignite, hard coal, oil, natural gas, biomass, photovoltaic, wind, nuclear, and hydroelectric. Although hydroelectric is ranked at the bottom, hydroelectric plants operated in tropical regions can be 5-20 times higher than in temperate regions making their emissions on the same level as biomass. (Dones et al. 38). In this list nuclear is ranked second best, but later estimates contest this figure: Sovacool analyzed 103 studies of nuclear power plant GHG equivalent emissions for currency, originality, and transparency. He found that the mean value for nuclear power plants is 66 gCO2e/kWh, placing nuclear power above all renewables (“Greenhouse Gas Emissions” 1). And the prospects for nuclear power emissions will only get worse as time goes on. Quality of ore used can greatly skew estimates of GWH emissions (Storm van Leeuwen). As high-quality uranium reserves are depleted, the nuclear power industry will be forced to turn to lower and lower grades of uranium ore, which will drastically increase the energy required to produce fissionable nuclear fuel. Since refining processes are powered by fossil fuels, this will also significantly increase the carbon footprint of nuclear power. Thus, emissions from the nuclear fuel cycle will match those of combined-cycle-gas-fired power plants in only a few decades. Although advanced fast-breeder or thorium reactors could potentially reduce this problem, they are not likely to commercially available for at least a couple of decades. This, combined with the long deployment times for nuclear reactors, effectively eliminates nuclear power as a viable long-term option for reducing carbon dioxide emissions. (Diesendorf 8-11). When all this is considered, nuclear power subsidies seem especially insulting: due to the long construction time and high expense of nuclear reactors, nuclear power subsidies come with a high opportunity cost when it comes to reducing emissions, because they will reduce investment in lower-cost alternatives (Koplow 9). Even though nuclear power may not be of use in stopping global warming, perhaps it can be justified on grounds of safety.

Health and security risks

            The fifth concern is that nuclear power production represents a health and security risk in many ways. The first way is in the form of nuclear accidents. The processes that occur inside of a nuclear reactor are just the same as those that operate inside an atomic bomb, only slower and, usually, more controlled. While everything is designed to function nicely under ideal conditions with some margin for error, sometimes reactors are struck with more than they can bear, natural disasters such as earthquakes and tsunamis. When this happens, the reactions in the reactors can “run away” with devastating results. A report by the Guardian newspapershortly after the 2011 meltdown in Fukushima, Japan, one of the worst nuclear disasters in history, counted thirty-four nuclear and radioactive accidents and incidents since 1952, the year the first one occurred “Nuclear Power Plant Accidents”).  Later in 2011, another incident occurred (“Factbox”), this time in France, bringing that total to thirty-five. A 2010 estimate by Sovacool placed the number at ninety-nine, but he used different criteria; Sovacool expanded the definition of a nuclear incident to something that causes property damages in excess of 50,000 USD (“A Critical Evaluation of Nuclear Power”). He estimated that these incidents’ total costs in property damages exceeded twenty-billion USD, and this was before the extremely expensive Fukishima incident that occurred a year later. The World Nuclear Association defends the nuclear industry with the following statistics: only three major accidents have occurred in over 17,000 collective reactor years of nuclear plant operation; a terrorist attack via airplane would be ineffective; few deaths would be caused by reactor failure of any magnitude; other energy sources cause many more deaths: fatalities per TWy for coal (597), natural gas (111), and hydro (10,285) all dwarf the figure for nuclear (48 (“Safety of Nuclear Reactors”). However, this does not consider several important factors: thousands have been killed either as a direct result of conditions caused by the incidents or indirectly as a result of evacuations (“Fukishima”). While some ignore or underestimate this factor, there have been very significant numbers of cancer deaths attributed to nuclear accidents, as well as unquantified irradiation from regularly produced nuclear wastes (Sovacool et al.); little is known about fuel cycle safety (Beckjord et al. ix). But, nuclear weapons expert Lisbeth Gronlund has estimated with ninety-five percent confidence cancer deaths of 12,000-57,000 from the Chernobyl accident alone (Gronlund). In addition to all of these risks, there is the unique risk of nuclear proliferation. Several countries have successfully managed to covertly advance their nuclear weapons programs behind a clever front of nuclear power (Sovacool et al). Because of this, nuclear power will always require government oversight to oversee waste management and control proliferation risks. If the nuclear industry is to expand, new international safety guidelines will be needed to overcome proliferation risks. (Beckjord et al. ix). The authors of the MIT study suggest that the once-through fuel cycle is the best option in terms of cost and proliferation and fuel cycle safety; only disadvantageous if long-term fuel disposal and resource preservation is considered (Beckjord et al. 4-5). However, this, as the authors admit, leads to more toxic waste and a faster consumption of limited resources. There seems to be no acceptable option for nuclear power.

Conclusion

            Taken together, all five of the above-discussed concerns about nuclear power seem to make a strong case that all subsidies to the nuclear industry be discontinued. First, there are significant concerns about the reliability of nuclear power. Then, there are devastating concerns about the sustainability of nuclear power, at least at its current technological level. Next, there are damning concerns about the true cost of nuclear power, which even considering only straightforward financial expenses is uncompetitive with all forms of renewable energy. After that comes irrefutable evidence that nuclear power is incapable of addressing global warming concerns, unlike renewable alternatives. Finally, concerns about nuclear accidents and the consequences of nuclear proliferation outweigh the seemingly higher death tolls of other energy sources when only on-the-job fatalities are considered. After all this, it is no wonder that even the authors of the pro-nuclear MIT study admit that “Nuclear power faces stagnation and decline” (ix). If energy subsidies are to make a difference in the global energy crisis and for the climate, they must be shifted away from nuclear power and directed towards renewables.


Works Cited

“Backgrounder on Nuclear Insurance and Disaster Relief.” United States Nuclear Regulatory Commission, January 17, 2018,                                       https://www.nrc.gov/reading-rm/doc-collections/fact-sheets/nuclear-insurance.html. Accessed April 26, 2019.

Beckjord, Eric S. et. al. “The Future of Nuclear Power.” Massachusetts Institute of Technology, 2003,                                                                                http://web.mit.edu/nuclearpower/pdf/nuclearpower-full.pdf. Accessed April 25, 2019.

Bradford, Peter A. “Wasting Time: Subsidies, Operating Reactors, and Melting Ice.” Bulletin of the Atomic Scientists, vol. 73, no. 1, Jan.                      2017, pp. 13–16. EBSCOhost, doi:10.1080/00963402.2016.1264207.

Diesendorf, Mark. “Is Nuclear Energy a Possible Solution to Global Warming?” Social Alternatives, vol. 26, no. 2, 2007 Second Quarter                      2007, pp. 8–11. EBSCOhost, search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=26314563. Accessed April 26, 2019.

Dones, R., Heck T., and S. Hirschberg. “Greenhouse Gas Emissions From Energy Systems: Comparision and Overview.” Paul Scherrer                        Institute, 2004, https://inis.iaea.org/search/search.aspx?orig_q=RN:36002859. Accessed April 25, 2019.

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Gronlund, Lisbeth. “How Many Cancers Did Chernobyl Really Cause?—Updated Version.” Union of Concerned Scientists, April 17, 2011,                     https://allthingsnuclear.org/lgronlund/how-many-cancers-did-chernobyl-really-cause-updated?. Accessed April 27, 2019.

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Koplow, Doug. “Nuclear Power: Still not Viable without Subsidies.” Union of Concerned Scientists, February 2011,                                                         https://www.ucsusa.org/sites/default/files/legacy/assets/documents/nuclear_power/nuclear_subsidies_report.pdf. Accessed April   26, 2019.

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Paton, James. “Fukushima Crisis Worse for Atomic Power Than Chernobyl, UBS Says.” Bloomberg, April 4, 2011,                                                         https://www.bloomberg.com/news/articles/2011-04-04/fukushima-crisis-worse-for-nuclear-power-industry-than-chernobyl-ubs-             says. Accessed April 26, 2019.

“Safety of Nuclear Reactors.” World Nuclear Association, May 2018, http://www.world-nuclear.org/information-library/safety-and-security/safety-of-plants/safety-of-nuclear-power-reactors.aspx. Accessed April 26, 2019.

Sovacool, BenjaminK. “A Critical Evaluation of Nuclear Power and Renewable Electricity in Asia.” Journal of Contemporary Asia, vol. 40, no.             3, Aug. 2010, pp. 369–400. EBSCOhost, doi:10.1080/00472331003798350. Accessed April 26, 2019.

—. “Second Thoughts About Nuclear Power.” Research Support Unit (RSU), Lee Kuan Yew School of Public Policy, National University of                 Singapore, January 2011, http://www.fukuleaks.org/edanoleaks/Scribble_Japan_Earthquake/pdfs/201101_RSU_PolicyBrief_1-2nd_Thought_Nuclear-Sovacool.pdf. Accessed April 26, 2019.

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Sovacool, Benjamin K., et al. “Comment on ‘Prevented Mortality and Greenhouse Gas Emissions from Historical and Projected Nuclear                     Power.’” Environmental Science & Technology, vol. 47, no. 12, June 2013, pp. 6715–6717. EBSCOhost, doi:10.1021/es401667h.

Storm van Leeuwen, Jan Wilhelm. “Nuclear power- the energy balance: Part D: Uranium.” Ceedata Consultancy, October 2007,                                   https://www.stormsmith.nl/Media/downloads/partD.pdf. Accessed April 25, 2019.

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