It’s too early to know precisely how the disaster at the Fukushima nuclear complex will shake up the industry, said experts convened by Climate One on Friday, April 8, in San Francisco. The panel agreed that nuclear power, despite offering the promise of carbon-free electricity and safer next-generation reactors, is challenged by steep upfront costs and where to store spent fuel.
Jeff Byron, until this January a member of the California Energy Commission, said the Fukushima tragedy offers the nuclear industry and its regulators a sobering learning opportunity. “The Nuclear Regulatory Commission just can’t go ahead and rubber-stamp license renewal applications. I think we’ll learn a lot from [Fukushima]. I think the debate will continue – and if it doesn’t your well-informed audience should be quite concerned,” said Byron.
Uncertainty over how to proceed has put the United States in a bind, he added. The US nuclear fleet is aging, with every reactor at least 30 years old. “We really want to retire them,” Byron said. “We’ve gotten ourselves into an awkward situation in the US. The debate has taken us down a path: nuclear, not nuclear. We’re extending the license of every one of these existing plants well beyond their intended design life. These are 50-year-old designs. I wouldn’t get on a 50-year-old aircraft if you paid me.”
Lucas Davis, an energy economist at UC Berkeley’s Haas School of Business, warned against the prohibitive expense required to replace all of those aging plants. “If you look at lifetime costs, including waste disposal at the end, the levelized cost of nuclear, with updated cost and fuel numbers, is about $0.10 per kilowatt-hour compared to $0.05/kWh for natural gas. That’s a big gap,” he said.
Because existing plants are so costly to replace, utilities have every incentive to keep them running for as long as regulators allow. “The 104 that exist in this country are cash cows. For a large utility, a couple of nuclear plants might generate a quarter of their profits,” said Jeff Byron.
Despite the obstacles, Jacques Besnainou, the French-born CEO of US-based AREVA Inc., insisted that policymakers keep nuclear in the energy mix. ”I’m not saying nuclear is the solution. But there is no solution without nuclear energy,” he said.
The prudent course, he continued, is to diversify our energy portfolio and “not just put all or eggs in the natural gas basket.” Nuclear power can replace coal as a source of baseload power, he said, and it keeps carbon out of the atmosphere.
“If we want to make sure we take care of our kids and take care of the environmental impacts of everything we do, dumping carbon into the atmosphere has a cost. It should be borne by somebody,” said Besnainou.
Lucas Davis agreed, offering that he’d welcome to be proved wrong on the question of costs. “Get in there and prove to us that you guys can build reactors on budget and an on time. That would change everything. But, to be fair, for 60 years the industry has been saying that costs are going to come down and the empirical evidence on it is pretty mixed,” he said.
– Justin Gerdes
April 8, 2011
Photos by Ed Ritger
The Commonwealth Club of California