Who Will Foot the Nuclear Power Bill?
Author: Jeremy Lovell
But ask the industry who is going to foot the potentially
massive bill and it becomes coy and mutters about governments,
public/private partnerships and equity financing.
"There is a lot of talk about the nuclear renaissance, but
in reality only China is really building," says Steve Kidd,
director of strategy at the World Nuclear Association (WNA). "No
one wants to go first."
According to the WNA -- the nuclear power industry's
umbrella organisation -- there are 439 reactors operating
globally, generating 371,000 megawatts of electricity or about
16 percent of total demand.
A further 34 are under construction, with 81 planned and 223
proposed -- 88 of which are in China.
The WNA estimates nuclear power could double over the next
30 years but, given the forecast surge in population and demand,
it will still only account for about the same percentage.
Cost estimates vary depending on location and number of
plants -- with economies of scale -- but the ballpark figure is
around US$2 billion for a standard 1 gigawatt nuclear plant.
"The first one will cost more than that. But get an order
for three or four and the price drops sharply," said Kidd. "The
best is 10 or more."
"The fact is that once it is running, a nuclear power plant
is like a cash machine. Yes, six to eight years of pain because
of the high initial capital costs, but then 60 years of almost
pure profit because of the low running costs," he said.
WHO WILL TAKE THE LEAD?
So why, ask the doubters, is no frantic nuclear construction
activity already underway, given it is a low-carbon emitting
technology and seems to fit the global warming bill perfectly?
"We are on the cusp of action. Everybody has been waiting
for someone to lead," Thomas Meston of reactor builder
Westinghouse, which has just sold four of its AP-1000 plants to
China, told Reuters at the WNA's annual meeting in London.
Britain is contemplating a new generation of nuclear power
plants to replace its existing fleet, all but one of which will
be closed due to old age within two decades.
As nuclear provides 18 percent of the country's electricity,
the issue is urgent.
The government has repeatedly said nuclear power should be
part of the energy mix but that it will not give public money.
It is conducting a public consultation on the issue that is
largely a public relations exercise as there is no legal block
other than cumbersome planning regulations -- which are being
cut -- to utility firms going ahead with a new plant.
The utilities say they are interested as long as certain
regulatory issues -- like who pays for decommissioning and
storage of toxic waste -- are sorted out.
But potential financiers decline to discuss the matter,
saying on one hand that they won't talk about hypotheticals and
on the other that they can't betray client confidentiality.
It is a game of brinksmanship, with the utilities holding
out for the best deal they can get from government --
particularly any price guarantees they may be able to extract.
The problem centres on public acceptability.
China and Russia may now be building nuclear plants, but
neither has a strong record on safety -- which is why what
happens in Britain, which does, could be a global catalyst.
France, which now gets 80 percent of its electricity from
atomic power, is already firmly set on a nuclear path.
"Britain is seen as a springboard for nuclear expansion,"
said Kidd. "The utilities will finance it. The challenge is to
make sure all the risks are allocated to the people who can best
"I am optimistic that is will happen, but maybe not in the
10-year timeframe some people are talking about," he added.
IS IT WORTH IT?
Scientists predict that global average temperatures will
rise by between 1.8 and 4.0 degrees Celsius this century due to