The Economist on Nuclear Energy - Why and Why Not

This excellent report from the Economist magazine, unfortunately displaced from the cover by the London bombings, hits all the right issues relating to subsidizing nuclear power as a solution to the climate problem. As the article notes on subsidies in general: "The better ways to deal with pollution and with the dangers of global warming are by taxing the use of carbon, in order to deter it and to encourage energy consumers to switch to other sources; and by facilitating the trading of carbon emissions." 

Other interesting quotes from this article - first on why private investors shun nuclear plants:

Existing plants, sometimes cited by the utilities, are no guide: the marginal cost of their power is cheap, but that is because the capital costs have long been written off. New plants require huge amounts of capital and the payback comes over several decades. That makes any economic assessment extremely sensitive to assumptions about borrowing costs and about prices for oil and natural gas. Today's high oil and gas prices make nuclear look good, but by the time new plants start producing electricity things could be different. So could the political climate: the recent swing in favour of nuclear power on the part of politicians and environmentalists could just as easily swing back. Together, these make investment in nuclear energy extremely risky.

and concludes:

To offer big subsidies to the nuclear industry may currently look green, but would be an admission of defeat. Governments that feel defeatist can thus consider subsidising nuclear power, for safety concerns should no longer rule it out altogether. But it should be part of a portfolio of different options, with fuel cells, biomass, solar, wind and various sorts of micropower playing their part too. Putting a bet of billions on a single, risky solution would make no sense at all.

An additional article on the subject includes a graph comparing the components of electricity cost from different sources (capital, operations and maintenance, and fuel) and some good discussion of the details on nuclear capital cost questions - are any of the countries that are building them now actually doing so without government subsidies? It's not clear.

Whatever the safety issues with nuclear fission reactors, the economic problems it's run into so far seem to preclude them from being much more than a minor player in our energy future.

Created: 2005-07-13 16:34:13 by Arthur Smith