Despite a rise in anti-nuclear opposition following an accident in a Fukushima Daiichi nuclear power plant during the 2010s, recent years have seen the shift towards a reconsideration of the role of nuclear power plants (NPP) in reaching a net-zero future [World Nuclear Association, 2021].
The argument that nuclear power is emissions-free is widely made by nuclear proponents such as France to advocate nuclear`s role in reaching net-zero targets. Furthermore, the spread of small modular reactors (SMR), making up a 30% capacity share of a classical reactor, is another argument for nuclear. The thing is that SMRs are more practical in installment because their units can be fabricated and shipped, unlike standard nuclear reactors that require custom design.
There is still strong dedication to shutdown nuclear plants in some Western European states (Germany, Belgium, Switzerland), however Eurasian countries are more supportive on the issue of using nuclear energy.
Namely, Turkey is constructing its first nuclear 4,8 GW power plant Akkuyu to be commissioned in 2023, with two more NPPs to follow. President of Turkey Recep Tayyip Erdogan said that to be against nuclear means opposing national energy independence. In 2021 Belarus launched its first unit of an Astravets NPP (first Belarusian NPP). The talks of building an NPP started in the 1980s but got suspended after the 1986 Chernobyl accident. The construction commenced only in 2013.
Poland, a country with a very high coal share in a power mix, also sees nuclear a suitable for decarbonization. According to the Polish government, till 2040, a country will benefit from a 6-9 GW of installed capacity by six nuclear reactors. Recently, a Polish national energy company proposed two locations to construct a first national NPP.
In 2017 Bangladesh commenced constructing its first national NPP 2,160 MW to be commissioned in 2023. Apart from that, there have been increased negotiations between Bangladesh and Chinese companies such as China`s Dongfang Electric Corporation participation in building the second NPP, presumably in the Gangamati region.
Not to mention that nuclear-rich countries such as China, India, South Korea, and even Japan in the post-Fukushima era are planning and constructing new nuclear reactors.
So many countries such as Australia, Indonesia, and Malaysia are now facing the choice, whether to embrace atomic energy. Whereas different R&D centers in these countries are involved in technological research, this article will shed light on what to-be-nuclear Eurasian states should keep in mind in calculating the total cost of nuclear when deciding on its support.
Capital costs include the costs of site preparation, construction, manufacture, commission and financing a nuclear power-plant. In 2014, the US Energy Information Administration estimated that for new nuclear plants going online in 2019, capital costs will make up 74% of the levelized cost of energy LCOE, higher than the capital percentages for fossil-fuel power plants. Namely, building a large-scale nuclear reactor takes thousands of workers, huge amounts of steel and concrete, thousands of components, and several systems to provide electricity, cooling, ventilation, information, control and communication. Over the past years, construction costs of nuclear power-plants have surged due to more sophisticated reactor designs. Therefore, companies that are planning new nuclear units are currently indicating that the total costs (including escalation and financing costs) will be in the range of $5,500/kW to $8,100/kW or between $6 billion and $9 billion for each 1,100 MW plant.
Operating costs include the costs of fuel, operation and maintenance (O&M), and a provision for funding the costs of decommissioning the plant and treating and disposing of used fuel and wastes. Low fuel costs have from the outset given nuclear energy an advantage compared with coal and gas-fired plants. Uranium, however, has to be processed, enriched and fabricated into fuel elements, accounting for about half of the total fuel cost. Moreover, fuel costs are one area of steadily increasing efficiency and cost reduction.
Furthermore, external costs have a particular importance in the discussion of the economics of nuclear power. Even though nuclear is considered to be low carbon, as it does not emit direct CO2, nuclear power plants still carry an environmental cost. The construction of nuclear power plants, involving concrete and metal, entails a so-called indirect “embodied carbon,” as CO2 is emitted within its production circle. Uranium enrichment, exploration of uranium ore alongside with production of nuclear fuel are very carbon-intensive processes. To obtain 1 ton of uranium concentrate, one needs to process 1000 tons of uranium ore (when the ore contains 0.1% uranium).
There is also a water-management problem. Nuclear reactors require large amounts of water for steam cooling for electricity generation. After passing through the cooling system of nuclear reactors, the water returns 5-10 degrees warmer, which negatively affects the river ecosystem. However, one should not overestimate the consequences of nuclear water usage, exemplifying Japan`s plans to release one million tons of water into the sea after the Fukushima accident. During the normal functioning of a nuclear power plant, water has no direct contact with a nuclear reactor.
Apart from that, the major cost concerns managing nuclear waste (spent radioactive fuel, used filters, and work closing). Nuclear waste may be recycled for further use (Japan, Belgium case) or permanently stored underground without recycling. As for waste storage, there are two ways to be taken. A country may invest in constructing spend nuclear fuel storage facilities or pay other countries for taking care of its nuclear waste management. This was the choice of Ukraine when the government decided to invest 1.7 billion dollars in storage facilities instead of paying 200 million dollars annually to the Russian state nuclear energy company.
In terms of human health, various studies of German Childhood Cancer Registry claim that radionuclides, caused by nuclear energy production, increase the risk of cancer, particularly leukemia, of people living in the surrounding areas. The costs of nuclear security are systematized as the costs of achieving two distinct goals.
The first goal is focused on meeting the nationally-regulated standards of safe operation and it represents the main task of the operator. To fulfill this criterium, the operator is obliged to make comprehensive investment in prevention, monitoring and action needed to mitigate the consequences of potential failures. These standards have been set in the aftermath of nuclear calamities such as the Three Mile Island, or the more recent one in Fukushima. In achieving these standards, conventional plants in the western-world follow the “defense-in-depth” method, encompassing multiple safety systems supplementing the natural features of the reactor core. Undoubtedly, the most important feature of these mechanisms is concentrated on the control of reactivity, fuel cooling and the containment of radioactive substances.
The second goal is related to the external threats imposed by nuclear terrorism and other criminal activity which could target a nuclear facility. The argument is that an attack on a nuclear facility would cause massive societal and environmental consequences amounting to billions of dollars, as well as interrupt vital power-supply chains. This aspect came into particular consideration in the aftermath of the 9/11 Attacks. Following these events, countries with nuclear facilities increased their defense expenditures focused on counter-terrorist activity and enhanced the conduct of simulating attacks on critical nuclear facilities.
In addition, given the complexity of developing nuclear technology autonomously, multiple countries take part in nuclear commerce. The construction of nuclear facilities takes years and creates a deeper diplomatic and institutional bond between the supplier and the recipient state. The troublesome aspect lies in the fact that the supplier countries might have allow themselves an advantage. For instance countries like Russia and China are the ones which fastest-growing exporters of nuclear technology. For example, Russia is the nuclear fuel supplier in the 43 percent [CSIS, 2020] of its nuclear technology agreements. The underlying cost of this relationship is the dependence on the recipient country on fuel inputs from the supplies, as alternatives are usually (but not exclusively) not compatible with the existing infrastructure. Therefore, it can be argued that the supplier country has potential to exert political pressure on recipient countries and use the dependence on nuclear fuel and technology as a leverage – instrument of diplomacy.
Furthermore, if a country decides to continue using nuclear energy or plans to build new reactors, it faces public opinion costs. With a development of renewables, even nuclear-rich countries like France experience negative change in public opinion [Odoxa, 2021] towards nuclear energy. Nuclear opponents speak about famous accidents, risks for nuclear proliferation, or the possibility of an attack of terrorist groups on nuclear facilities. To persuade people of the attractiveness of nuclear, governmental agencies and atomic energy companies should spend time and money for informational promotion campaigns in media or organization of panel discussions and public hearings. Dialogue with civil society may also foresee holding a national referendum, which, even if it supports the continued use of nuclear (Taiwan referendum), still costs a lot in terms of budgetary allocations for its organisation.
In the case of building new nuclear capacities, there is a breaking NIMBY (Not-In-My-Backyard) cost. Nuclear companies should engage with local communities, possibly offering them additional benefits such as jobs in nuclear facilities or investments in infrastructure within a corporate and social responsibility framework.
Moreover, if a country decides to phase-out nuclear in the future, such a move entails economic and environmental costs. The thing is that after nuclear power plants are shut down, the country should substitute its share in electricity generation. The easiest way to do so is to speed up the use of coal and gas, which results in more greenhouse gas emissions, consequently air pollution, health diseases, and increased mortality risks. Whereas nuclear accounts [Our World in Data, 2021] for 0.07 deaths from accidents and air pollution per 1 TWh (annual consumption of 27,000 people in the EU), coal results in 24,6 deaths (351-times higher than nuclear). According to the American National Bureau of Economic Research [NBER, 2019], an annual nuclear phase-out cost in monetary terms for Germany is 12 billion USD.
Finally, system costs represent a major point in the comprehension of the economics of nuclear power. Accordingly, the idea of substituting nuclear by solar or wind is not only costly but also creates additional system costs later. An average atomic reactor has an installed capacity of 1 GW, resulting in 8060 GW/h per year. Whereas, due to a difference in capacity factors compared to solar and wind (92% vs. 15-25%/20-30%), to substitute 1 GW of nuclear generation, one needs to build 4 GW of solar/3 GW of wind power plants. Moreover, solar and wind energy are regarded as variable renewables (VRE), as operators cannot control their generation. When a large share of VRE penetrates an energy system, more dispatchable generation is needed to provide flexibility to meet the peak load demand. In the short run, more VRE will lead once again to more coal/gas use, and in the long run, would necessitate investments [IRENA, 2019] into energy storage, biogas, or hydrogen.
References
CSIS (2020). The Changing Geopolitics of Nuclear Energy: A Look at the United States, Russia, and China. Retrieved from https://www.csis.org/analysis/changing-geopolitics-nuclear-energy-look-united-states-russia-and-china. Accessed on 24.12.2021.
IRENA (2019). Solutions to integrate high share of VRE. Retrieved from https://bit.ly/3H8mPun. Accessed on 24.12.2021.
National Bureau of Economic Research (2019). The private and external costs of Germany’s nuclear phase-out. Retrieved from https://www.nber.org/system/files/working_papers/w26598/w26598.pdf. Accessed on 24.12.2021.
Odoxa (2021). « Retour de flamme », des Français en faveur du nucléaire. Retrieved from http://www.odoxa.fr/sondage/retour-de-flamme-francais-faveur-nucleaire/ Accessed on 24.12.2021.
Our World in Data (2021). What are the safest and cleanest source of energy? Retrieved from https://ourworldindata.org/safest-sources-of-energy. Accessed on 24.12.2021.
World Nuclear Association (2021). World Nuclear Performance Report 2021. Retrieved from https://bit.ly/3FtiX6T. Accessed on 24.12.2021.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.
Viktor Karvatskyy
Visiting Research fellow
Viktor Karvatskyy heads Ukrainian consulting agency ADASTRA AGENCY, specialising in external economic affairs & governmental affairs. During 2019-2021 Viktor served as CEO of Ukrainian Think Tank ADASTRA. Before setting its own research institution, Viktor worked at prominent Ukrainian think tanks as economic and energy analyst.