Government, the Abolisher of the Ultimate Energy Source (Part 2)

nuclear-power-plant

Introduction

In Part 1 of this article, I’ve discussed on how Government forces have altered the course of Nuclear Energy, and how such regulations till today lays burden on the Nuclear energy sector. In Part 2, we will look at the potential Nuclear has if such regulations are deregulated, or made flexible, the future of Nuclear Power (and new reactors being developed), and a comparison vs what is labelled as “green energy”.

Nuclear Power And Its Costs

First, one must establish that fuel costs are an extremely minor cost, even if it is not subsidized like today. However, capitalization costs are of course the major cost driver. Recent capital costs towards the building of nuclear power stations are increasing. One must look at overnight costs (engineering-procurement costs+ owner’s costs). Overnight costs have increased from 1,500 USD/KWe (1960s) to 4,000 USD/KWe (mid-1970s) when keeping a constant 2002 PP dollar. While continuing this trend, current costs are 5,339 USD/KWe (2010) when using a 2002 PP dollar. The US Energy Information Administration cites that such reasons for increased overnight costs are due to regulation requirements, licensing problems, and project management problems. This again can be virtually traced back to the unchanged regulations in the 1970s-80s with their increased complications. To further add to this, even more complications on construction regulations drive up overnight capital costs. An example of this is the Levy County Nuclear Power Plant. First initial costs are highest around the world (5000 USD/KWe). The next incremental increase of costs drive this up to 6500 USD/KWe.

The Future of Nuclear Power, Molten Salt Reactors (MSRs)

Before we get into the rough estimates on the potential costs that could be recouped if we reverse such increases in regulations (or change towards more flexible regulations), we must first discuss future technologies of nuclear power. The biggest issues are nuclear energy’s risk of meltdowns and the environmental effects of nuclear waste, hence why public opinion towards nuclear power is fundamentally distorted from the truth. The truth is that nuclear power plants are extremely safe, with or without the moral hazards created by government interventions. The environmental effects are almost none.

Molten Salt Reactors (MSRs) ironically were developed by the US government in Oakland laboratories. However, they were ultimately rejected due to light water reactors being favored as they had an advantage: fitting into nuclear submarines. Of course, if government interventions from World War II did not take place, MSRs would have ultimately appeared sooner than the 1960s. Currently, MSRs are being explored by Russian and Chinese governments due to its excellent economic advantages.

First, we must establish that MSRs have the distinct advantage of having no meltdown scenarios, they do not produce any waste, they can also consume nuclear waste, and most important, they are extremely inexpensive. The reason for this is that MSRs fuel is molten by design, so therefore they make MSRs automatically walk-away safe. Even a significant terrorist attack would not have the capability to release a significant amount of radioactivity, as any breach or leakage of reactors would ultimately lead towards the fuel to come out and solidify, which also keeps radioactive byproducts within the solidified leaked fuel. Essentially, because MSRs fuel is already in liquid form, gases which are released simply bubble up, and thus little to no radioactive waste is given off.

A distinct advantage of MSRs is that they can also use existing radioactive waste in order to produce energy. Not only is this an extremely practical solution towards radioactive waste which we have today, but it also makes running MSRs inexpensive. To also further reduce costs, MSRs are inexpensive from initial costs because the requirement of pressure containment domes, and many other safety systems are essentially not required to power MSRs. This creates the possibility to build such reactors either in different factories and shipped off as different parts, or as a whole! Due to the fact that MSRs predominately use Thorium, and not uranium, the availability of fuel for MSRs is high and could power the United States for a very long time. Essentially, with such increased capabilities of electricity production, this would allow for the further compensation for the inevitable increase of electricity demand, and thus this would allow for the opening of industries and other fields which of course we cannot predict in the near future.

If one wants to measure the peacefulness which can be achieved by MSRs, one can also look at the fact that, because nuclear waste is barely produced by MSRs, the weaponization of such waste is extremely tough, thus reducing the amount of future nuclear weapons. Essentially, the amount spent on nuclear weapons would be reduced, which should reduce tax rates; this ultimately would allow for more resources to be utilized within the private sector, rather than in the public sector.

A new MSR 500MW reactor should cost 1.7 billion dollars. New nuclear reactors, which are still subject to outdated regulations, have solved not only initial capitalization cost problems, but also many safety and efficiency problems, which would allow for cleaner, safer, and even more inexpensive electricity services.

Calculating Rough Estimates for Flexible Regulations or Deregulation of Nuclear Energy

We can calculate rough estimates on how much a nuclear power plant would cost thanks to knowing how much costs have increased from the 1960s to 2010. Because the majority of such cost increases are predominately due to government regulations, we can assume that if such regulations become flexible, or if the field is deregulated, this could allow the recouping of costs which have been added by such burdensome government regulations. We can make a range of the percentage of increased costs that can be recouped in order to give an overall rough estimate on how much an actual nuclear power plant would initially cost to build.

Recovered 25% 50% 75%
Initial Costs 9,000 Million USD 9,000 Million USD 9,000 Million USD
Less Mandatory Insurance  

(1,806) Million USD

 

(1,806) Million USD

 

(1,806) Million USD

Actual Insurance Cost on Estimated Risk  

 

1,355 Million USD

 

 

0,903 Million USD

 

 

0,452 Million USD

Regulation Costs saved  

(1,293) Million USD

 

(2,586) Million USD

 

(3,880) Million USD

Total Est. Cost for 1000MW  

7,255 Million USD

 

5,511 Million USD

 

3,766 Million USD

Below are the rough estimates for a 500MW Molten Salt Reactor

Recovered 25% 50% 75%
Initial Costs 1,700 Million USD 1,700 Million USD 1,700 Million USD
Less Mandatory Insurance  

(0,341) Million USD

 

(0,341) Million USD

 

(0,341) Million USD

Actual Insurance Cost on Estimated Risk  

 

0,256 Million USD

 

 

0,171 Million USD

 

 

0,085 Million USD

Regulation Costs saved  

(0,244) Million USD

 

(0,489) Million USD

 

(0,733) Million USD

Total Est. Cost for 500MW  

1,370 Million USD

 

1,041 Million USD

 

0,711 Million USD

By rough estimates, the whole nuclear industry could save between 19.4% to 58.2% of initial capital costs from regulatory effects.

Comparing Nuclear Energy vs. “Green Competitors”

Currently we’ve been bombarded with information that solar and wind are the only and best energy sources to help solve environmental problems. But, what if we wanted to power the whole US baseload?

To power the US baseload with a mixture of solar and wind, it would require a total of 29 trillion dollars and every single last inch of Indiana in order to do so. Using just solar would require 18 trillion dollars and every last inch of West Virginia. Of course, both of these solutions are extremely impractical, and extremely expensive. Compared to current nuclear power plants, this would require only 3 trillion dollars and a smaller amount of land, while Molten Salt Reactors would require 1 trillion dollars.

The use of land between the three, in order to produce 1000MW, solar would require 60 square miles of land, while wind would require 310 square miles, and nuclear would only require 1.3 square miles of land. Nuclear requires 4,516% less land than solar to produce the same quantity, and 237,462% less land than wind.

What about the differing life cycle CO2 equivalents (Emissions)? Solar releases 27 grams of CO2 per KW/h produced, while wind produces 12 grams of CO2 per KW/h, and Nuclear produces 12 grams of CO2 per KW/h. Essentially not only does Nuclear require less land, but it is also tied for the lowest producer of CO2 emissions.

Now let’s look at what is billed currently towards consumers from each energy type. Solar, as of 2013, costs 37 cents per Kwh, while wind costs 8 cents per Kwh, and nuclear (without taking into account the potential decrease in capital costs, operating costs, and future innovation) costs 4 cents per Kwh.

Here’s a table to compare nuclear energy to its other competitors (1000MW)

Category Solar Wind Nuclear Now MSRs Now Potential Nuclear Potential MSRs
Land Usage 60 mi^2 310 mi^2 1.3mi^2 1.3mi^2 1.3mi^2 1.3mi^2
Grams CO2/Kwh 27g/Kwh 12g/Kwh 12g/Kwh 3-5g/Kwh 12g/Kwh 3-5g/Kwh
Cost/ Kwh 0.37USD 0.08USD 0.04USD 0.02-0.04USD 0.02USD 0.01USD-0.02USD
Capital $ 2.5 Billion 2.2 Billion 9 Billion 3.4 Billion 3.8 Billion 0.7 Billion

Conclusion

The history of nuclear energy is one of turbulence from its inception, thanks to government intervention. Government intervention has altered the course of nuclear energy via war, subsidization, and over-regulation. Today we see the nuclear industry as an extremely expensive form of producing electricity, although in reality it should be extremely inexpensive, safe, and environmentally friendly. Nuclear has the chance to make a comeback, if such regulations and subsidies where to be removed by the US government.

Government cannot predict future energy consumption and production. If the nuclear energy sector is deregulated, or changed towards a flexible regulatory framework, this would most likely translate to the market preferring nuclear energy. However, this would also include the need to stop subsidizing the solar and oil industries, as those also distort vital price mechanisms that allows the market to choose the most cost-effective and safest source of electricity.

Sources

BIG ATOMIC PLANT NEAR PITTSBURGH SUPPLYING POWER

Introduction | The Manhattan Project: Making the Atomic Bomb | History of the Atomic Age | atomicarchive.com

Land Needs for Wind, Solar Dwarf Nuclear Plant’s Footprint – Nuclear Energy Institute

Nuclear Power Economics | Nuclear Energy Costs – World Nuclear Association

Let’s Run the Numbers – Nuclear Energy vs. Wind and Solar | The Energy Reality Project

NEI Nuclear Notes: How many nuclear plants does it take to meet the world's energy needs?

Solar Farm Cost Per Acre | Budgeting for Solar Farms

How much do wind turbines cost? – Windustry

What's a molten salt reactor and why do we need it

Obama plan has no role for nuclear power – AEI

FACT SHEET: Obama Administration Announces Actions to Ensure that Nuclear Energy Remains a Vibrant Component of the United States’ Clean Energy Strategy | whitehouse.gov

Dec. 2, 1942: Nuclear Pile Gets GoingDec. 2, 1957: Nuclear Power Goes Online | WIRED

Myth Busted! Nuclear is Actually Second-Cheapest Source of Electricity. – Canadian Nuclear Association

http://www.walterblock.com/wp-content/uploads/2009/06/Nuclear-Power.pdf

This article was edited for grammar, style, and spelling, but not for content. The views expressed are that of the author, Baland Rabayah, exclusively, and do not reflect that of BeingLibertarian.com or Being Libertarian LLC

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