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Nuclear vs Solar – Can Renewable Energy Ever be Cost Effective Enough to Compete?

February 14, 2012


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Solar power has long been plagued with unsubstantiated claims that whilst it’s a great source of renewable energy, it’s just far too expensive as a viable source of power on a large scale compared to nuclear. However, particularly over the last 18 months, the cost of solar power has fallen dramatically, for example, in the UK the costs have decreased by about 30% per installed kWh.

Firstly, why has solar power become so cheap? This is mainly due to increased competition. Many countries over the last two years have introduced generous subsidies to encourage the adoption of solar panels, which have received a lot of attention in the news. This has driven demand from homeowners wanting to find out more about solar power, creating a growing market. Whenever there is a large market, the ability to offer products at the lowest margins possible means that a healthy profit can be made, driving innovation. Manufacturers have streamlined the solar panel production process, and the solar modules themselves offer greater efficiency.

But will solar ever match the low costs of nuclear energy? A recent study from Duke University, ‘Solar and Nuclear Costs – The Historic Crossover’, explains that whilst solar power is decreasing in costs, nuclear power is getting more expensive, and at an increasing rate. They predict that this year is when solar power’s cost per kilowatt hour (kWh) generated will fall to 16 cents, whilst nuclear’s cost will rise above this level.

Construction costs for nuclear power are the reason why ultimately the cost per kWh has been rising. In 2002, the cost per reactor was approximately $3 billion, compared to $10 billion for 2012 – a rate far above inflation. Overall, it seems strange that whilst the construction of one technology is getting cheaper, the other is getting more expensive.

“Regulatory ratcheting” is a term applied to how constantly changing and increasing regulatory demands on nuclear power production are causing the bulk of extra expense. The massive cost increases that result are because nuclear plants take 5-10 years to build, and modifying a project that is already under construction, especially with the complexity of a nuclear reactor, is very wasteful, difficult and time-consuming. With the amount of labour involved in building a nuclear power plant, each day of delay adds an extra $1 million in costs. The regulations involved change so often that it is a vital part of the planning process to anticipate possible future changes and to make sure the plant can be adapted to these guesses. This means that often extra, but unnecessary, features are included in the plants.

Whilst many consider nuclear power plants as a good, low carbon option for power development, very few people are willing to live near one due to the perceived safety risks. This means that there is inevitably fierce local opposition to new plants being built, and intervention groups use hearings and legal strategies to delay the construction, ultimately adding to the costs of the electricity produced. As the regulations become increasingly complicated, the potential for legal intervention rises, and elaborate inspections often can cause a bottleneck in the construction process.

An example of this is the Seabrook plant, built in New Hampshire in the USA. Local interventionists raised legal concerns that the 80 degrees Fahrenheit water being released into the Atlantic by the nuclear plant could harm aquatic life. This lead to a two year delay, and the plant having to construct a costly system to pipe water over two miles away from the shore.

The Duke University study cited earlier has received criticism in the methods used to calculate the impressive figures for solar – the cost of 16 cents/kWh was to the consumer, only after 14c/kWh of subsidy being included in the actual cost of production at 30c/kWh. However, it also didn’t include the huge subsidies given to the nuclear industry, often vital to make sure that over-budget plants get finished rather than abandoned.

It is difficult to conclude precisely when a “historic crossover” will occur. Whilst solar is steadily becoming cheaper, the costs involved with nuclear are very unpredictable because the construction process is much more complicated and heavily dependent on the ever-changing regulations and legal situation. What is clear, however, is that nuclear is overall getting more expensive, and it seems inevitable that the two will eventually crossover and solar will become a viable alternative. The difficulty is predicting when this will happen.

Written by James Hawkins

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  • wial

    Yes, unless breeder reactors are used. World supplies of uranium will run out in a few decades otherwise. Given solar is now cheaper with no end in sight, and there are plenty of bombs to go around (woot) continued manufacture of nuclear plants even if the new ones are safer (a meltdown every seven years on average isn’t a great track record) seems wrongheaded at best.