A new report on nuclear energy costs may buzz-kill Colorado Republicans’ push for the controversial power plants as an alternative to nonrenewable, carbon-laden oil, natural gas and coal.
New nuclear power costs are triple current U.S. electricity rates, according to Business Risks and Costs of New Nuclear Power. Those high costs are compounded by concerns that new plants could join the ranks of troubled assets and become enormous credit risks for energy firms, investors and government loan guarantors.
The report, authored by leading power plant expert Craig A. Severance, is described as “one of the most detailed cost analyses publicly available” delivered by the sober realism of a certified public accountant:
It has been an entire generation since nuclear power was seriously considered as an energy option in the U.S. It seems to have been forgotten that the reason U.S. utilities stopped ordering nuclear power plants was their conclusion that nuclear power’s business risks and costs proved excessive.
Estimates for new nuclear power place these facilities among the costliest private projects ever undertaken. Utilities promoting new nuclear power assert it is their least costly option. However, independent studies have concluded new nuclear power is not economically competitive.
Given this discrepancy, nuclear’s history of cost overruns, and the fact new generation designs have never been constructed any where, there is a major business risk nuclear power will be more costly than projected. Recent construction cost estimates imply capital costs/kWh (not counting operation or fuel costs) from 17-22 cents/kWh when the nuclear facilities come on-line. Another major business risk is nuclear’s history of construction delays. Delays would run costs higher, risking funding shortfalls. The strain on cash flow is expected to degrade credit ratings.
Generation costs/kWh for new nuclear (including fuel & O&M but not distribution to customers) are likely to be from 25 – 30 cents/kWh. This high cost may destroy the very demand the plant was built to serve. High electric rates may seriously impact utility customers and make nuclear utilities’ service areas noncompetitive with other regions of the U.S. which are developing lower-cost electricity.
And you were worried about Wall Street melting down? Welcome to a financial nuclear winter.
Meanwhile, The Grand Junction Sentinel’s Mike Saccone reports that state Rep. Cory Gardner, R-Yuma, plans to introduce a bill in February “to create a [Colorado] nuclear energy commission to explore how feasible it would be to jump-start nuclear development.” That plan has been green-lighted by Senate Minority Leader Josh Penry.