Featured Research

from universities, journals, and other organizations

Weighing The Financial Risks Of Nuclear Power Plants

Date:
April 5, 2007
Source:
University of California - Berkeley
Summary:
Power companies are rushing to invest in new nuclear reactors, largely because of promised government subsidies that make the investment seem as good as investments in other types of energy. A new study warns, however, that unexpected costs have often arisen in past nuclear plant construction, increasing electricity costs. Because new plants will use untested technologies, such cost surprises could happen again, making nuclear power less attractive financially.

Enticed by the gleam of government subsidies, many companies are rushing to invest in nuclear power, expecting that new technology and safer reactors will make them as good an investment as other types of power plants.

A new study appearing in the April 1 issue of the journal Environmental Science and Technology notes, however, that the country's history of unexpected cost overruns when building nuclear plants should sound a cautionary note for power companies that nuclear power may not be financially attractive.

"For energy security and carbon emission concerns, nuclear power is very much back on the national and international agenda," said study co-author Dan Kammen, UC Berkeley professor of energy and resources and of public policy. "To evaluate nuclear power's future, it is critical that we understand what the costs and the risks of this technology have been. To this point, it has been very difficult to obtain an accurate set of costs from the U. S. fleet of nuclear power plants."

The study, conducted by a research team from Georgetown University, Stanford University and UC Berkeley, analyzes the costs of electricity from existing U.S. nuclear reactors and discusses the possibility for cost "surprises" in new energy technologies, including next-generation nuclear power.

What they found was a range of electricity costs, from 3 cents per kilowatt hour to nearly 14 cents per kilowatt hour, with the higher costs attributed to such problems as poor plant operation or unanticipated security costs.

"In the long term, whether these plants are 4 cents or 8 cents per kilowatt hour, they are still a good deal, if you think carbon is an issue," Kammen said, referring to the carbon dioxide emissions from oil, coal and gas-fueled power plants that exacerbate global warming. "If the argument is that cost really needs to be important, then I'm not sure nuclear competes that well."

Some politicians also tout the increased security benefits of having domestic sources of energy, but this doesn't translate into decreased risk for investors, the study notes.

"In a deregulated electricity environment, investors will increasingly share the financial risks of underperformance of generation assets," said co-author Nathan Hultman, assistant professor of science, technology and international affairs at Georgetown University in Washington, D.C., and a visiting fellow at the James Martin Institute for Science and Civilization at the University of Oxford. "We don't have a good way of forecasting these risks yet, but looking at the historical data can be one way to understand the possibilities and scenarios for the future."

No new nuclear power plants have been built in the United States in 29 years, in part because they've proved to be poor investments, producing far more expensive electricity than originally promised. In 2005, about 19 percent of U.S. electricity generation was produced by 104 nuclear reactors.

The Energy Policy Act of 2005 and the Advanced Energy Initiative of 2006 sought to change that, offering financial incentives for new plant construction that employs new reactor and new safe-operating technologies. Current nuclear plant operators have given notice that they intend to apply for approval of 27 new "generation III+" reactors.

But Kammen points out that in the past, when U.S. companies have introduced new technologies, they've run into unexpected costs that have kept electricity prices high. France, on the other hand, standardized the design of its nuclear power plants and encountered fewer cost surprises.

"Some U.S. plants were really well done, and they happen to be the older ones," he said. "If we can learn the lessons from those plants, which are often simplicity of design and standardization of design, then I think nuclear could make a comeback."

New and safer technologies are essential to making nuclear power more acceptable, he said, but "we need to optimize a few designs, we don't need a proliferation of types of plants, because we have proven we are not good at managing them."

The answer to the increased riskiness is not more government subsidization, he added, but more savvy investment decisions by the companies interested in nuclear power.

The research was supported by the Karsten Family Foundation, the Energy Foundation and the James Martin Institute for Science and Civilization at the University of Oxford.


Story Source:

The above story is based on materials provided by University of California - Berkeley. Note: Materials may be edited for content and length.


Cite This Page:

University of California - Berkeley. "Weighing The Financial Risks Of Nuclear Power Plants." ScienceDaily. ScienceDaily, 5 April 2007. <www.sciencedaily.com/releases/2007/04/070403181045.htm>.
University of California - Berkeley. (2007, April 5). Weighing The Financial Risks Of Nuclear Power Plants. ScienceDaily. Retrieved April 17, 2014 from www.sciencedaily.com/releases/2007/04/070403181045.htm
University of California - Berkeley. "Weighing The Financial Risks Of Nuclear Power Plants." ScienceDaily. www.sciencedaily.com/releases/2007/04/070403181045.htm (accessed April 17, 2014).

Share This



More Earth & Climate News

Thursday, April 17, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

The Great British Farmland Boom

The Great British Farmland Boom

Reuters - Business Video Online (Apr. 17, 2014) Britain's troubled Co-operative Group is preparing to cash in on nearly 18,000 acres of farmland in one of the biggest UK land sales in decades. As Ivor Bennett reports, the market timing couldn't be better, with farmland prices soaring over 270 percent in the last 10 years. Video provided by Reuters
Powered by NewsLook.com
Small Reactors Could Be Future of Nuclear Energy

Small Reactors Could Be Future of Nuclear Energy

AP (Apr. 17, 2014) After the Fukushima nuclear disaster, the industry fell under intense scrutiny. Now, small underground nuclear power plants are being considered as the possible future of the nuclear energy. (April 17) Video provided by AP
Powered by NewsLook.com
Change of Diet Helps Crocodile Business

Change of Diet Helps Crocodile Business

Reuters - Business Video Online (Apr. 16, 2014) Crocodile farming has been a challenge in Zimbabwe in recent years do the economic collapse and the financial crisis. But as Ciara Sutton reports one of Europe's biggest suppliers of skins to the luxury market has come up with an unusual survival strategy - vegetarian food. Video provided by Reuters
Powered by NewsLook.com
How Mt. Everest Helped Scientists Research Diabetes

How Mt. Everest Helped Scientists Research Diabetes

Newsy (Apr. 15, 2014) British researchers were able to use Mount Everest's low altitudes to study insulin resistance. They hope to find ways to treat diabetes. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins