Nuclear Socialism
Brad Plumer has an interesting piece about the American right’s strangely passionate love affair with nuclear power and the impact it’s having on the climate debate in congress. What I find especially odd about it is that it’s so at odds with American conservatives’ ardor for the free market. You see this mismatch in a small sense in that their nuclear agenda in congress consists basically of asking for subsidies. But in a larger sense the issue is that the big example one can find of a country living the nuclear dream is . . . France. And it’s not just an irony or a funny coincidence, nuclear power in France is deeply tied to the genuinely socialistic (i.e., not just high taxes and a generous welfare state) aspects of the French economy.
When the French nuclear network was being built out Éléctricité de France was wholly owned by the French state and had a statutory monopoly on the distribution of electrical power. What’s more, of the different kinds of French state-owned companies (yes, there are several) it was an Établissement Public à Charactère Industriels et commercial (EPIC) which meant it was fully guaranteed by the state and could, in effect, raise capital at a sovereign rate. This solves the big economic problem with nuclear power. The projects are so big, so long-term, so risky, and have such high up-front costs that financing the construction of these things is a nightmare. As the MIT interdisciplinary project on the future of nuclear power wrote in its 2009 update:
While the U.S. nuclear industry has continued to demonstrate improved operating performance, there remains significant uncertainty about the capital costs, and the cost of its financing, which are the main components of the cost of electricity from new nuclear plants.
The nuclear industry is eager to find ways for the US government to intervene in the market to resolve these issues, but the easiest way to do that is to actually have it undertaken by a publicly owned company.
These days EDF has been “privatized” in the kind of only-in-France way that many large French firms are private—it’s a standard Société Anonyme with shareholders, but the majority of shares are owned by the state. Areva, the engineering company that does the actual building, is also owned by the state. In Finland, there’s a somewhat problematic big nuclear project underway and the utility doing it Teollisuuden Voima Oy, also involves a hefty share of public ownership. In the United States, too, we used to build nuclear plants back when our economy was much more dirigiste.
At any rate, I have fairly equivocal views as to whether this is a good idea or not. But I think it should be seen for what it is. If you’re interested in reading more on the subject of nuclear power, I recommend the MIT interdisciplinary study on The Future of Nuclear Power.
78 Responses to “Nuclear Socialism”
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November 6th, 2009 at 1:06 pm
MY is right. Nuclear power has generally required subsidies and conservatives still support it (and appear oblivious regarding the subsidies — but what else is new?.
Libertarians wrote about that in 1978 (zzzzzzzzz).
November 6th, 2009 at 1:09 pm
Again, one shouldn’t mistake political positions with the principles of political theorists. The bent of conservatives towards massive engineering/military projects is quite consistent with the constituency benefited by those projects (Dixie especially, but the whole corps of American engineers, from software to structural, who have long benefited from America’s irrational need to spend trillions of dollars on “defense”). Instead of viewing conservatism in the terms in which it presents itself (as anti-goverment, or for the ’small state’), it makes a lot more sense to view it as a claimant to specific state programs – thus, public option health insurance – bad – emergency insurance for hurricane struck areas (a major concern along the Gulf coast) good. Hydrological projects benefitting giant agro-industry, good; giant environmental mandates to clean up power plant pollution, bad.
The whole anti-government/pro-government thing is simply a dodge. The people who take it seriously on the practical levle are either, a, lunatics, or b, seventeen year old readers of Ayn Rand. Of course, the latter group is, notoriously, stupid, and their intelligence usually ossifies by that age. Later, some of them become talk radio hosts, without once thinking about the fact that radio wave space was, of course, seized by the state in the twenties and rented out to radio companies, making talk radio possible. Which is another big state project they heartily approve of.
November 6th, 2009 at 1:13 pm
…the American right’s strangely passionate love affair with nuclear power and the impact it’s having on the climate debate in congress.
Because without nuke plants, the Left will use the so-called Global Warming “emergency” (the Earth is actually cooling, or if it is warming, it’s caused by sun oscillatons – the American Enterprise Institute says so and why would they lie?) to herd us Real Americans into internment camps and then institute a world socialist government ruled by space lizards. QED.
Wolverines!
November 6th, 2009 at 1:19 pm
Central economic planning is the only way that nukes can be built. They can’t compete in the marketplace. Ironically, those who decry the public option as rampant socialism don’t seem to have any problem with Price-Anderson, which is nothing more than federally-provided universal insurance for all nuke plants.
November 6th, 2009 at 1:21 pm
I just have to say that “Teollisuuden Voima Oy” is the greatest name of a public utility that I have ever heard. It sounds like a name from a Finnish translation of a Pynchon novel.
November 6th, 2009 at 1:26 pm
Without having read the MIT report, I bet it says that everything hinges on having a nuclear repository, and since Harry Reid killed Yucca Mountain, there will be no repository in the short term. In the long term, NIMBY-ism will make building a repository difficult if not impossible, so there isn’t much potential for the American nuclear industry — what ever form it may take. This one will have to wait on the next energy crisis.
November 6th, 2009 at 1:29 pm
What are your problems with nuclear exactly? France has built a nuclear based economy that generates clean, cheap power. Once they hook up electric cars, they’ll be a very low-carbon economy. Do you think they should dismantle all of that for more expensive and more unreliable alternate sources of energy?
Republicans, at least, are focused on solving the problems that have stood in the way of nuclear power. The left has placed hurdle after hurdle in the way of nuclear power, and we emit far more carbon as a result.
November 6th, 2009 at 1:34 pm
This post is one huge “Hey, look over there, FRANCE!”
I mean, who cares whether France owns its nuclear plants through its government? That has nothing whatsoever to do with the system here in the USA. Here in the USA, nuclear plants are generally owned by private companies. And if built more of them, those new plants would generally be owned by private companies too.
Of course, Matthew is right that some of the plans for nuclear power by the GOP involve tax breaks. But so what? There are tax breaks for all kinds of power – oil, natural gas, solar, coal, wind, everything. Might as well have tax breaks for building new power plants that are environmentally friendly and scalable – i.e., nuclear – too. Moreover, that isn’t the only GOP position on nuclear energy – the GOP also advocated reducing the onerous regulations affecting building nuclear plants.
November 6th, 2009 at 1:34 pm
Not only that, but the same folks who are enraged about big government “forcing” things on the little guy are all in favor of big government forcing nukes on the NIMBYs. The cognitive dissonance is strong. I suspect it stems from a cold war mentality where we must have the largest nuclear arsenal and most nuclear power plants, despite the evidence that they are no panacea.
November 6th, 2009 at 1:37 pm
As others are pointing out, modern American “conservatives” are often not particularly ideological, and certainly not in a libertarianish way. So some of them like nuclear power because it is good for some big businesses. The remainder like it because some environmentalists don’t like it, and sticking it to the hippies is their raison d’être.
November 6th, 2009 at 1:38 pm
I never liked Yucca Mountain as a repository and favor the deep salt formations of Arizona. Seismically stable. Easily accessible. Below the water table. And it would be damnably easy to seal the repository off from terrorists.
We can all laugh at that for 30 seconds.
November 6th, 2009 at 1:42 pm
I have no idea what Al thinks is “private” about nuclear energy. The government subsidizes the building and maintenance and assumes ALL of the risks from accidents and the responsibility for the waste.
That leaves profits. Those would go to the people who “owned” the plant.
Why not simply have the government take those, too?
November 6th, 2009 at 1:43 pm
But so what? There are tax breaks for all kinds of power – oil, natural gas, solar, coal, wind, everything. Might as well have tax breaks for building new power plants . . .
And in the course of the six words “but so what/might as well”, once again a modern interest-group/resentment-based Republican hack throws the libertarians under the bus. Is it any mystery why the national debt increased under Reagan/Bush/Bush?
That said, I am fine with public subsidies for nuclear power as part of a multi-prong strategy to achieve more and cleaner energy production in the United States.
November 6th, 2009 at 1:44 pm
Why not simply have the government take those, too?
That’s no way to maximize campaign donations.
November 6th, 2009 at 1:48 pm
If you want radioactive isotopes to build a dirty bomb (spent fuel does not make fissile material without extensive re-processing), there are much easier places to get them than scrounging around in a waste repository (like a hospital, for instance).
November 6th, 2009 at 1:54 pm
“Brad Plumer has an interesting piece about the American right’s strangely passionate love affair with nuclear power and the impact it’s having on the climate debate in congress.”
They think it pisses off the DFH and putting lotsa Nuke Power in the climate change bill will kill it, because they think the reason the DFH support climate change legislation is so we can make enact our Environmentalist-Secret Kenyan Muslim-Islamofascist-Communist-Nazi agenda.
My attitute is “Nukes better than CO2! Turn Nevada into a radioactive wasteland so long as we keep the methane clarthrates on the sea bed from melting!”
November 6th, 2009 at 2:00 pm
The real question isn’t why Republicans are in favor of Nukes. In the last ten years, there has been significant Republican support for farms subsidies, ethanol fuels (but I repeat myself), steel tariffs, housing subsidies, coal subsidies, and all manner of other big government policies.
The real question, which I haven’t really seen answered, is why are American Environmentalists still so opposed to nuclear power? It has demonstrably worked for France, so the technical problem of waste storage is clearly surmountable, and it is zero carbon emission (leaving aside construction, where it has about the same output as any other similar scale power plant). So what exactly is the objection?
November 6th, 2009 at 2:05 pm
Another example of nuclear socialism is the Price-Anderson Act, which puts a $10 billion limit on the industry’s liability for another Chernobyl or Three-Mile Island. Unless the government had agreed to socialize the risk of a nuclear accident in this way, there would be no nuclear power industry in the U.S.
November 6th, 2009 at 2:05 pm
My attitute is “Nukes better than CO2! Turn Nevada into a radioactive wasteland so long as we keep the methane clarthrates on the sea bed from melting!”
I used to fear the methane clathrates, and though it may be a measure of my misunderstanding, it looks to me like temps have to go into the “we’re not around much anymore anyway” range before clathrates become an issue. Now, CO2 from tundra and taiga? Under, BAU, those should be bubbling like a Fizzy by mid-century.
November 6th, 2009 at 2:06 pm
The government … assumes ALL of the risks from accidents
Really? Then what does this insurance company do?
November 6th, 2009 at 2:07 pm
I propose having the French government build and run our new plants.
November 6th, 2009 at 2:10 pm
c.f. Price–Anderson Nuclear Industries Indemnity Act
November 6th, 2009 at 2:11 pm
The real question, which I haven’t really seen answered, is why are American Environmentalists still so opposed to nuclear power?
They aren’t monolithically opposed to nuclear power, particularly if you are talking about people who just consider themselves environmentalists (as opposed to dedicated activists and professionals).
November 6th, 2009 at 2:15 pm
My primary objection to nuclear power is that it’s just too damned expensive. When you build in appropriate safety measures at every step of the fuel cycle, it can’t compete with more benign alternatives — which is why it’s been rejected by the marketplace in the US. As someone once said, nuclear power is just an expensive way to boil water. To simply say, “let’s do it because it’s cleaner than coal” is setting the bar way too low. I am confident that with good old American ingenuity we can develop new energy sources that are clean, safe and affordable.
November 6th, 2009 at 2:15 pm
So what exactly is the objection?
Chernobyl.
November 6th, 2009 at 2:16 pm
I am confident that with good old American ingenuity
Like what?
it’s just too damned expensive
Perhapse, but only if you don’t price in the externalities.
November 6th, 2009 at 2:18 pm
Really? Then what does this insurance company do?
Conventional liability insurance excludes coverage for injury or damages relating to nuclear accidents. Utilities can buy specialized insurance products to cover liabilities relating to nuclear catastrophes, but only because the government has capped their exposure at $10 billion. Above $10 billion, the taxpayers are on the hook. Even ignoring the unthinkable environmental consequences, an accident on the scale of a Chernobyl would probably bankrupt the United States.
November 6th, 2009 at 2:18 pm
The grassroots, talk radio crowd isn’t FOR anything. They’re simply against a lot of stuff that pisses them off for one reason or another. They don’t listen to political arguments; they just run the mental equivalent of a keyword search. If you enter keyword “nuclear power” you get a hyperlink to “tree huggers.” Tree huggers piss them off. Tree huggers oppose nuclear power. Ergo they support nuclear power because they’re anti-tree hugger.
Talking about costs and subsidies just misses the point. They’re not interested in stuff like that. They’re just interested in voicing various cultural grievances. They voice the grievances as a marker of identity. If you try reasoning with them it just marks you as one of “those” people. Tree huggers, or whatever. It’s a form of mental illness.
November 6th, 2009 at 2:19 pm
So what exactly is the objection?
Chernobyl.
I wouldn’t want to fly in a TU-154 – but that doesn’t mean a Boeing or Airbus isn’t a very safe and reliable form of transportation.
http://en.wikipedia.org/wiki/Tupolev_Tu-154
November 6th, 2009 at 2:19 pm
The problem with nuclear power in the US was that it was always a socialist enterprise while it’s player and supporters kept pretending it was a free market one. The socialized model works great in most places but it can’t here because Americans are slackers and con men who love nothing better than to defecate on the idea of the common good while taking everything that isn’t nailed down for themselves. So we ended up with a pseudo free market system which practically bankrupted many utilities and helped take the greatest electrical system in the world, bar none without question, in terms of cost and reliability, and turn it into an average system that is getting worse.
Nuclear generation has a place but only to the extent we are honest about it. It isn’t cheap and it requires vast subsidy. The free market cannot supply it, honestly.
November 6th, 2009 at 2:26 pm
Like what?
I think the argument is that with a good enough grid and high enough penetration, you could do away with baseload generation even just using intermittent sources like wind. And there is also the possibility of a complementary revolution in storage (maybe associated with vehicles).
November 6th, 2009 at 2:27 pm
I wouldn’t want to fly in a TU-154 – but that doesn’t mean a Boeing or Airbus isn’t a very safe and reliable form of transportation.
Unless you believe that human error could occur only in the former Soviet Union, your position is untenable.
November 6th, 2009 at 2:27 pm
How can subsidies be a major stumbling block for progressives thoug? All cleaner energy requires massive short and medium subsidies. Nuclear more than some forms and less than most others.
It is one thing to note that conservatives seem to be hypocrites on this (though the Not In My Backyard syndrome that national control is supposed to avoid may reflect a similar hypocrisy on the part of progressives). But why do progressives (on average) have so much trouble on the issue? [Yes I realize that *some* don't.]
November 6th, 2009 at 2:37 pm
Utilities can buy specialized insurance products to cover liabilities relating to nuclear catastrophes, but only because the government has capped their exposure at $10 billion.
Exactly. Jeffrey Davis somehow thinks that the government has assumed “ALL of the risks from accidents” (capital ALL!).
November 6th, 2009 at 2:40 pm
Jeffrey Davis somehow thinks that the government has assumed “ALL of the risks from accidents” (capital ALL!).
Yes, but you (Al) implied that utilities could purchase insurance to cover the risks. In fact, they cannot and need not. The risk of an American Chernobyl is on us, and the nuclear power industry could never have gotten off the ground were it otherwise.
November 6th, 2009 at 2:50 pm
This from a guy who supports as many subsidies as it takes for losers like wind and solar…
November 6th, 2009 at 3:10 pm
Unless you believe that human error could occur only in the former Soviet Union, your position is untenable.
Huh? Chernobyl didn’t have a containment vessel so there was no protection against human effor. A classic TU-154 didn’t have (almost) any of the backup systems that protect passengers from human error in Airbus and Boeing products: TCAS, GPWS, etc.
November 6th, 2009 at 3:11 pm
But why do progressives (on average) have so much trouble on the issue?
The oldest arguments relate to the safety of the technology and potential threat to the environment from waste, accidents, and so on. More recently I think the core issue is more that some progressives are worried we will waste a lot of money on nuclear power without getting enough switching from carbon-intensive means of energy production to justify those investments.
November 6th, 2009 at 3:23 pm
anent “ALL”
Note to self: “Your memory is not what it used to be.”
November 6th, 2009 at 3:26 pm
Apparently not all the skeptics about nuclear power are left wing pinko commies.
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/05/AR2009110504329.html?sub=AR
The author of the Washington Post piece is one Tony Hayward, CEO of BP who is a natural gas advocate. Of course, it should be pointed out that BP produces natural gas and doesn’t run nuclear power plants but the conflict of interest never bothers the right wingers in citing an article that agrees with their prejudices. Heres what Mr. Hayward has to say about nuclear power.
What about nuclear power? All-out nuclearization, a la France, would be costly and difficult to achieve in the United States, and the environmental payoff would be slow.
I don’t think we can afford to wait. Until renewables gain a sizable share of the power sector, CCS becomes available, and nuclear energy ramps up, the only realistic option is increasing use of natural gas.
Replacing coal with natural gas in electric power plants is an option that makes eminent sense. We already see that happening in the transit industry with diesel powered buses being replaced by natural gas powered buses. As Mr. Hayward puts it, what are we waiting for?
November 6th, 2009 at 3:27 pm
A couple of commenters gave the reason MY asked for. Conservatives believe nuclear power is cost effective except for the onerous government regulations. They believe if we get the tree-huggers out of the way, private industry will build lots of nuclear power plants profitably.
November 6th, 2009 at 3:30 pm
A classic TU-154 didn’t have (almost) any of the backup systems that protect passengers from human error in Airbus and Boeing products: TCAS, GPWS, etc.
You mean systems like the airspeed measuring system that failed in the Air France air disaster over the Atlantic in June? You mean systems like the human systems that caused Air France to delay its response to warnings about replacing defective airspeed measuring systems?
There was an abundance of human error at Chernobyl, including design error. The West is not immune from the phenomenon of human error.
November 6th, 2009 at 3:34 pm
formerly k,
Everything has dangers – far more people in the west have died from black lung or in mine accidents than have died due to a nuke plant failure.
November 6th, 2009 at 3:34 pm
They believe if we get the tree-huggers out of the way, private industry will build lots of nuclear power plants profitably.
The funny thing is that the only reason there’s no nuclear industry today is because it isn’t profitable. There’s no environmental block. There’s just no money in it. It’s the same reason that there’s no booming shale oil industry. There’s just no money there.
November 6th, 2009 at 3:35 pm
This article is an excellent discussion of the comparative cost of nuclear vs. other forms of power generation.
The bottom line is that no one really knows how expensive it will be to build a new nuclear plant in the US since no one has tried to build one in the past 30 years. But it is pretty clear that nuclear is pretty much the most expensive way you could possibly generate power. Even wind and solar are cheaper and, of course, much safer.
November 6th, 2009 at 3:37 pm
no environmental block
What do you call the years of NIMBY court battles?
November 6th, 2009 at 3:37 pm
Nuclear power is to the left what global warming is to the right: an opportunity to demagogue and pander to their base, even while flying in the face of science and engineering facts. Another way to say it, is that anti-nuke is the creationism of the left: a strongly-held, intuitive, essentially spiritual belief that is impervious to facts or evidence.
The high cost of nuclear power plants reflects the fact that, after 30+ years of anti-nuclear demagoguery (mostly by Democrats, I’m sorry to say), a lot of people don’t want them. Governments at various levels impose more regulations, more bureaucratic obstacles, to create delays and raise costs so as to inhibit nuclear plants from being built — because that’s what their voters want. And, it works. A classic example was the failure of the Shoreham nuclear plant on Long Island back in the 1980’s. A lot of locals were opposed to it, and then-governor Mario Cuomo was glad to grab a torch and lead the pitchfork mob against the plant, which was completed but never operated. Cuomo picked up political points with certain (wealthy) parts of the Democratic base, while the utility was suddenly out several billion dollars.
As long as public opposition remains strong — and it will, until some leading Democrat chooses truth over demagoguery (thanks for nothing, Al Gore) — the “risk premium” that a new plant might suffer the same fate will add substantially to the up-front cost. (This is openly acknowledged in the MIT report update, BTW.) Arguably, federal subsidies and streamlined regulations are a corrective to this “irrational” burden imposed by an irrational public. So, before you say “nuclear is expensive,” you should have a clear idea of how much of that cost is real, ie materials and labor, and how much is a reflection of public opposition that could, in principle, change.
November 6th, 2009 at 3:42 pm
This article is an excellent discussion of the comparative cost of nuclear vs. other forms of power generation.
That article is bullshit. First assume we don’t know how much a plant will cost, then assume it will be hugely expensive, and the Q.E.D. nuke power is exensive.
In reality:
In Japan and France, construction costs and delays are significantly diminished because of streamlined government licensing and certification procedures. In France, one model of reactor was type-certified, using a safety engineering process similar to the process used to certify aircraft models for safety. That is, rather than licensing individual reactors, the regulatory agency certified a particular design and its construction process to produce safe reactors. U.S. law permits type-licensing of reactors, a process which is being used on the AP1000 and the ESBWR.
November 6th, 2009 at 3:42 pm
Hayward is right that with the advances in gas extraction technology and new reserve estimates, it is by far the quickest and lowest-cost path to near-term carbon-emission savings and increased energy independence. But on this:
That would be because people in the gas industry decided to try to simply oppose the bill, instead of coming to the table to negotiate. Get on board with actually passing something and you can do better.
November 6th, 2009 at 3:43 pm
There’s just no money there.
False.
November 6th, 2009 at 3:46 pm
Cuomo picked up political points with certain (wealthy) parts of the Democratic base, while the utility was suddenly out several billion dollars.
And Long Island has some of the highest power costs in the country. No connection, surely.
November 6th, 2009 at 3:51 pm
Nuclear power makes hippies nervous. Does that help explain why conservatives love it so much?
November 6th, 2009 at 3:54 pm
If you take the most pessimistic costs within reason, nuclear is still cheaper than solar. Wind would be cheaper, but not solar. There is no reason to use solar panels to generate appreciable amounts of electricity. Research, demonstration projects, and niches where the energy is used without a connection to the grid are the only reasonable use of solar panels. Even if forced coal and gas plants to extract 110% of their CO2 output from the atmosphere, they would still be cheaper than solar.
November 6th, 2009 at 4:25 pm
Let’s face it. nuclear power is not cost effective without massive government subisdies and government insurance to cover catastrophic losses. If it is so safe, why don’t private insurance companies cover them without the government insurance umbrella? It should be pure profit for them. If it is so efficient, why do utilities require customers to pay for the plant years before it produces a single watt of electricity? Does not compute.
November 6th, 2009 at 4:31 pm
If it is so efficient, why do utilities require customers to pay for the plant years before it produces a single watt of electricity? Does not compute.
Why? Because of endlesss NIMBY lawsuits and a nearly impossible permit process. Unlike in France or Japan:
In Japan and France, construction costs and delays are significantly diminished because of streamlined government licensing and certification procedures. In France, one model of reactor was type-certified, using a safety engineering process similar to the process used to certify aircraft models for safety. That is, rather than licensing individual reactors, the regulatory agency certified a particular design and its construction process to produce safe reactors. U.S. law permits type-licensing of reactors, a process which is being used on the AP1000 and the ESBWR.
Tokyo Electric, for example, is currently building two new reactors that are expected to come online in 2013.
November 6th, 2009 at 4:34 pm
Three words: “Liberals hate it.” That’s all the policy justification they need or want.
Although if the Dems DO pass a bill including a lot of nuke subsidies, I would not be surprised if the GOP has the balls to trot this argument out too. “Liberals DON’T hate it anymore? It must be Bad!!!”
November 6th, 2009 at 4:45 pm
[...] that I thought conservative affection for nuclear power was a bit odd in light of the fact that only massive socialism seems capable of financing nuclear power plants. David Frum has a post in response that I [...]
November 6th, 2009 at 5:15 pm
Why? Because of endlesss NIMBY lawsuits and a nearly impossible permit process. Unlike in France or Japan
so you need a strong central government to force nuclear on people. Just what conservatives like James Robertson and Al love, apparently.
November 6th, 2009 at 5:25 pm
The reason that conservatives like nuclear power is because it makes them feel all big and tough.
Nuclear power can cause meltdowns and results in horrific waste that takes millions upon millions of years to break down. Plus more nuclear plants means that we can build more nuclear bombs.
Just the thought is enough to cause your average republican to grow a small, rubbery one.
Windpower is for pansies, it doesn’t even pollute the air.
Plus the socialism benefits huge corporations, allowing them to dig directly into the pockets of the taxpayer, which Republicans also love. They hate giving their money to the government, but they’re all for handing over every penny they earn to a giant corporation.
So, F! Yeah! Nuclear! Socialism!
Conservatism can be summed up pretty simply – fear of impotence. Nuclear power is like the viagra of power generation.
November 6th, 2009 at 5:25 pm
These subsidies work out to about $1.40/MWh.
For wind, these subsidies are about $23/MWh.
For solar, these subsidies work out to about $200/MWh.
If you count the right to dump CO2 into the atmosphere as a subsidy, coal gets about $10/MWh and gas gets about $4/MWh.
It is a bit deceptive, because the subsidies for wind and solar have significantly higher percentages going to R&D. If their production were scaled up, the subsidies would shrink on a per unit basis. In reality, wind is close to being competitive, solar, however, is not.
November 6th, 2009 at 6:00 pm
A shorter, more number-minded MattY could have written…
From the footnotes of the MIT report:
“Nuclear is financed at 50% debt, with a debt cost of capital of 8% and an equity
cost of capital of 15%. Coal and gas are financed with 60% debt, a debt cost of capital of 8% and
an equity cost of capital of 12%.”
THe difference does not seem much, until:
- you realize that the capital is two times so much for nuclear as for coal, five times as for gas, and 90% of the nuclear kwh cost (personal approximation, no time to check)
- what 3% compounded over 40 years means
- and finally realize that the State could get money for max 5% over the whole capital, no need of equity cost for paying risk since if nuclear is the base load you do central planing and are sure it will sell —> result: nuclear kwh maybe HALF OF COAL OR GAS.
Surprise, surprise: that is how the practical calculation more or less worked out in France, until EDF had to take risk for expanding and buying lemons in those free market paradise in GB and the US and let the French pay for it and the shareholders share.
For chrissake: pay the capitalists risk money where there is risk, at the margin of the capacity with gas and coal, not at the core! ANd definitely not if the public already cover the risk.
Why the f… do we see it again and again: student loans, energy, health care for the Young, Medicare for the Old…
For a start: stop calling “normal amount of central coordination in a complex society and collectivization of risk and investment” SOCIALISM, it is not.
November 6th, 2009 at 7:07 pm
I didn’t realize the French model, but the _only_ way to get nuclear power to pay is as a government run business. Otherwise the idea will be to cut corners to make profits, and you can’t really do that with nuclear power.
Currently the US nuclear energy industry makes money because they don’t have to deal with nuclear waste. France recycles nuclear fuel, which essentially means they will never run out of nuclear fuel. The US model gives a few hundred years of power and then tens of thousands of years of dealing with the waste.
So the process needs to be put into the hands of scientists who are only interested in the overall, long-term economy of nuclear energy. Private enterprise can run support industries, mining, refining, fuel production, security, process control…many, many things are open to support. But the design, management and decision-making must be done by the equivalent of Manhattan project leaders.
November 6th, 2009 at 7:13 pm
[...] Matthew Yglesias » Nuclear Socialism [...]
November 6th, 2009 at 8:37 pm
Is Mr. Yglesias aware that at least 3 investor-owned US utilities are currently in process for building new privately-owned nuclear plants (although Ameren, which was the 4th, decided not to proceed), and that Exelon just stated that they expected to build 5-6 new plants (10-12 units) by 2020?
For all progressives talk about being reality-based and willing to do research the traditional media doesn’t do, our leading lights tend not to read the trade and specialist financial press in an area before posting (or bloviating) on that area.
Cranky
November 6th, 2009 at 11:11 pm
Jerry @59 you are clearly not well educated on the issue of nuclear power. You do not need to be conservative to like it. Look, if we recycle the “waste” and use it as fuel again like the French do the actual waste that will produce would be miniscule. The French store their true waste in glass cylinders under the floor of a facility about the size of a high school gym.
While it is possible for meltdowns to occur there are low odds of it happening and the more modern plant designs are done in such a way to decrease the odds of a meltdown occurring even more massively. It is important to remember that the great Nuclear incident, Chernobyl, was a badly designed reactor with no containment building operated to produce weapons by a corrupt and rather indifferent soviet state. No one anywhere thinks it would be a good idea to built a disaster like that in the west.
Please also keep in mind that a normal nuclear reactor does not typically produce any form of weapons grade plutonium. It requires extensive reprocessing and concentrating to generate weapons grade material.
It is rather bemusing to watch global warming advocates who openly and blaseyly talk about incurring costs so high that they have to be measured as a % of the entire countries GDP worrying about the cost of using nuclear power. Especially when a considerably amount of the cost involved is caused by risk that stems from decades of rules and obstacles put in place by people hostile to nuclear power.
If we truly are worried about global warming then taking huge steps to streamline the development and deployment of nuclear power is obviously a significant part of the solution. Nuclear power is not a magical cure but it is nowhere near as problematic as the dogmatists like to suggest. Especially in colder damper parts of the country where solar and wind power is especially problematic. (We can’t even get it to work in sunny places like Arizona for goodness sakes!)
November 6th, 2009 at 11:39 pm
Most references to expensive solar refer to photovotaics, however solar thermal is very cost competitive. The dessert SW is ideal (space = 1000’s acres + NIMBY issues). Proposed hybrid solar thermal plants built along side conventional power plants (share the hardware that boils water) can break 10 cent per KWh. Lots of options (nuclear power not evil but long and expensive) if you look! The big deal is the “smart” transmission grid. Follow the transmission lines in Texas from wind turbines to customers.
November 6th, 2009 at 11:59 pm
It is rather bemusing to watch global warming advocates who openly and blaseyly talk about incurring costs so high that they have to be measured as a % of the entire countries GDP worrying about the cost of using nuclear power.
Two observation:
1. Who exactly is for global warming?
2. Turning “blase” into an adverb? Freakin’ genius!
November 7th, 2009 at 2:46 am
China is going to build 50,000 skycrapers in the next 20 years. China will build more than 30 subway systems larger than Boston’s subway system in the next 10 years. China’s HSR network for cargo, just cargo, will be larger than the entire HSR passenger network in Europe by the year 2030.
Of China’s $2.4 trillion stimulus package, $585 billion will go directly to infrastructure, R&D and earthquake relief (there are no New Orleans in China). Of that $585 billion, roughly $120 billion will go to building out a national smart grid with attached wind farms.
Take a look at this graph.
http://file.shanghaidaily.com/News/Image/2009/2009-06/2009-06-01/20090601_402643_01.jpg
This is pre-stimulus. China has already invested $100 billion in their grid in just the last three years, and they are throwing $120 billion on top of that.
It looks like China will come close to experiencing almost 10% growth this year, despite being an export driven nation in the midst of worldwide recession. Stimulus had an effect, but incredibly, the majority of the $585 billion infrastructure stimulus is scheduled to spent in 2010!
On top of that, China has made it clear they are willing and eager to put together another stimulus package for 2010. They are piling stimulus on top of stimulus.
November 7th, 2009 at 3:15 am
For most of this year China’s stated goal was to derive 15% of their energy needs from windpower by 2020. The optimists in China believed they could push that figure as high as 20%.
Now, in the wake of stimulus and the smart grid build out, China’s official target for windpower generation has moved up to 20%, and the optimists in China are throwing around numbers like 35%.
Sometimes it’s hard to make heads or tails of all the numbers floating around out there in cyberspace, but it is clear, China will spend, at minimum, $1 trillion on their smart grid in this decade alone. That is direct government spending. Total spending could easily approach $2 trillion, or $3 trillion, as private investors around the world are lining up to participate in what should prove to be the greatest concentration of wealth infusion (and generation) in the history of mankind.
On October 27, in a little noted event, President Obama announced that the United States government, as part of ITS stimulus package, will award over the next few years $3.4 billion in grants to private businesses -to begin the work of developing America’s smart grid.
November 7th, 2009 at 3:37 am
Clearly, the United States is incapable of building a smart grid. A smart grid requires a national plan, and national plans of any kind are forbidden by our Constitution. And without a modern grid, windpower generatin can never play a significant part in meeting our energy needs.
That means the future energy playing field has been reduced to Big Nuke and Big Coal. I am in agreement with those above who have pointed out that building out Big Nuke would require massive government involvement and planning. Since we have no functioning government, and even if we did, national planning is verboten, this strikes me as impossible.
So Big Coal wins. America will end as it began, digging coal out of the earth and burning it.
November 7th, 2009 at 12:55 pm
As someone said solar-thermal isn’t bad. Here is a picture illustrating how big an area you would need in the Sahara desert in Algeria to supply the world, EU, or Germany with electric power. Clearly this would be very big from the ground but not so big from space.
November 7th, 2009 at 1:14 pm
Funny how this thread has proceeded as if America has no nuclear power plants. We do. In the last round of energy de-regulation, supported by the corruption party (GOP/BlueDog Dems/Neo-Libs), the taxpayers paid considerably for those nuclear power plants. Here’s a nice story from the National Journal, 8 August 1998:
“Nettie Hoge thinks homeowners and small-business owners got a raw deal in 1996 when California deregulated the state electricity industry. Now, she and other consumer advocates are asking California voters to pass a controversial ballot initiative that would rewrite the state deregulation laws.
Hoge, executive director of the Utilities Reform Network, a San Francisco-based consumer group, said the initiative is evidence of a growing sense of frustration among residential and small-business customers that the benefits of electricity deregulation are passing them by.
The deregulation deal gave California’s smaller customers an immediate 10 percent cut in their electricity bills that will last for four years. But that windfall was financed by $6.5 billion in low-interest bonds that the rate payers must pay off over the next 10 years. California lawmakers also required customers to help the utilities pay for their overpriced nuclear power plants and other investments–a whopping $28 billion bill.”
28 billion is a lot, but think of it this way: it went to the bloodthirsty geriatric oligarchs around Cheney, and who deserves it more? They were geniuses! that is, in the imbecile class, which is the rightwing constituency. Luckily, they were satisfied with just pocketing that much – their wall street friends would laugh. Really, you can squaeeze a lot more blood out of the American middle class, and make them lick the boots of the bloodsqueezers too!
So, back in the day, the brilliant nineties, the enthusiastic Republicans in Congress came up with a bill that would help the poor rich with their “stranded costs”, and nuclear power became a big winner for power companies, since they could suck money directly from the state. This was a perfect example of what conservatives mean by capitalism: an oligarchy made up of predators (whose jobs and compensation packages came about from a laughably closed job market) reap windfalls of taxpayer money, which is then veneered over with some rhetoric about free enterprise.
This stranded cost story is from the Christian Science Monitor, 14 August, 2009:
Of the 182 construction permits granted by government commissions, 50 were abandoned in construction with billions in investment lost and 28 were closed before their 40-year licenses expired – including the Three Mile Island plant’s Unit 2.
Gary McCool knows all about the financial pitfalls of nuclear power. Thirty years ago the Plymouth State College reference librarian warned managers at his tiny New Hampshire Electric Cooperative that its plan to purchase 2 percent of the new Seabrook nuclear power plant’s generating output when it was completed could push the coop into bankruptcy – or perhaps produce the highest electric rates in the nation.
It turned out to be both. Today he’s still paying the price of nuclear power – even though his coop no longer purchases any. There on his monthly bill is a $6.06 charge for “stranded costs” – the cost of paying off the coop’s adventure into Seabrook.”
Just pennies a day, and you, too, can feed the vampiric rich! But why pay any attention to the past? After all, it never happened! – or at least in the Fox-drunk mind of the rightwing fan club, it never happened. Having perfected the dummy’s path to skepticism – if it hurt my feelings, it can’t be true! -they will eagerly fall in line for the next rooking. Why not do this all over again?
It is good business. Surely any private equity firm worth its salt could go in and out on a deal like this, pile up sky high debts backed by the state, pay itself for managing same, then unwind the deal on some sucker and watch the energy provider go bankrupt.
November 7th, 2009 at 1:26 pm
[...] Matthew Yglesias: Brad Plumer has an interesting piece about the American right’s strangely passionate love affair with nuclear power and the impact it’s having on the climate debate in congress. What I find especially odd about it is that it’s so at odds with American conservatives’ ardor for the free market. You see this mismatch in a small sense in that their nuclear agenda in congress consists basically of asking for subsidies. But in a larger sense the issue is that the big example one can find of a country living the nuclear dream is . . . France. And it’s not just an irony or a funny coincidence, nuclear power in France is deeply tied to the genuinely socialistic (i.e., not just high taxes and a generous welfare state) aspects of the French economy. [...]
November 7th, 2009 at 3:18 pm
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November 7th, 2009 at 5:45 pm
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November 10th, 2009 at 12:59 am
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