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NRDC Response to "Coming Full Circle in Energy, to Nuclear," by Eduardo Porter, New York Times, August 21, 2013

Christopher Paine

Posted August 23, 2013

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In his recent article “Coming Full Circle in Energy, to Nuclear,” Eduardo Porter offers up nuclear energy as the best alternative to coal in order to reduce greenhouse gas emissions. Regarding the real possibility that humankind will burn vast additional coal reserves in the decades to come, Porter writes: “The only way around this is to put something in coal’s place, at a reasonably competitive price. Neither the warm glow of the sun nor the restless power of the wind is going to do the trick, at least not soon enough to make a difference in the battle to prevent climate change.” What is it about nuclear power that its advocates feel obliged to promote it as a silver bullet for climate change, a role which, given its massive capital costs, technical complexity, and international security concerns, nuclear power is clearly ill-suited currently to perform?

Porter’s statement embraces a number of familiar errors. First, the task before us is not to arbitrarily designate, solely on the basis of alleged scalability, any single low-carbon “something” in coal’s place, but rather to address the required rapid phase-down of coal use by investing in a wide portfolio of available cleaner energy technologies, and deploying them roughly in order of their overall cost-effectiveness and timeliness in displacing CO2-equivalent emissions and in securing broader environmental sustainability goals.

This means, first and foremost, achieving significant and highly cost-effective demand-side reductions through increased investment in end-use energy efficiency and energy conservation measures – Porter completely neglects this critical dimension of the climate change problem – accompanied by a build-out of a balanced low-carbon electricity portfolio, including: the increased avoidance/reduction of transmission losses via distributed generation and improved technology; utility-scale wind power (both land and offshore); residential, commercial, and utility-scale solar; small hydro; small wind; geothermal; industrial waste-heat cogeneration; residential and commercial combined heat and power systems; landfill and agriculture biogas generation using fuel cells and/or small combustion turbines; and  emerging wave/tidal/ocean thermal technologies.

Second, as anyone with a passing acquaintance with the economics of new-build nuclear knows, these plants are not currently competitive with wind and NGCC in the U.S. in deregulated power environments, and their massive capital costs and project completion risks make them politically unattractive even in some regulated markets, where nuclear’s above-market costs and risks can sometimes be passed on to disenfranchised “ratepayers,” or in the case of federal “loan guarantees,” federal taxpayers. Porter cites a now dated OECD study (published in 2010), jointly authored by the Paris-based International Energy Agency and Nuclear Energy Agency, to support the notion that new-build nuclear can be had in “North America” for “$50 to $75 per megawatt-hour, depending on assumptions about construction costs and interest rates.” Not so. According to the most recent (Jan. 2013) analysis by the U.S. Energy Information Administration (EIA), which cites a range of $104.40 – $115.30  per Megawatt hour (in 2011 dollars before distribution charges) as the 30-year levelized electricity cost from a new build reactor in the U.S. entering service in 2018. The range of independent cost estimates puts the cost considerably higher, at $120 - $190 per Megawatt hour (MW-hr), because such estimates are very sensitive to the details of the financial model used, and the EIA assumes a 30-year cost recovery period and a weighted average cost of capital of 6.6 percent, whereas other financial structures require higher returns.

Porter’s piece also opines (incorrectly) regarding the near-term projected costs of utility scale renewable energy sources – “any alternative energy source will have a hard time competing against fossil fuels.” In reality, according to same EIA analysis cited above, new on-shore wind and geothermal plants, before subsidies, have a levelized cost range of $73.50 – $100.30 per megawatt-hour, while both “conventional” and “advanced” coal plants (without carbon capture and storage) fall within a range of $89.50 – $137.90 per megawatt hour.

Similarly, Porter loosely opines that “a megawatt/hour of solar power still costs in the hundreds [of dollars].” He seems to unaware that from 2008 to 2012, the average cost of a solar module dropped by 80%.  According to a December 2012 report from DOE’s NREL and Lawrence Berkeley Laboratory, for utility-scale solar, the capacity-weighted average installed price declined from $6.20 per watt for projects installed during 2004-2008, to $3.90 per watt for projects installed during 2009-2010, and to $3.40/W for projects installed in 2011.

On an installed capital cost basis, that makes solar PV at $3400 per kilowatt in 2011 considerably less expensive than new build nuclear, which EIA projects at $5,530 per kilowatt. The mean of independent-analyst estimates for nuclear new-build capital cost is actually higher, at about $6200 per kilowatt, which also happens to be the projected cost of the twin nuclear units now under construction at Plant Vogtle, in Georgia, which have a nominal capacity of 2,234 MW and a projected cost of around $14 billion.

The current unsubsidized levelized cost-range of utility-scale solar PV plants, which is obviously highly location-dependent at $112.50 - $224.40 per MW-hr, now overlaps that of nuclear plants, with a projected average cost of $144.30 per MW-hr. Because they generate power onsite, avoiding transmission and distribution charges, smaller distributed solar rooftop power plants are actually grid-competitive now in some locations with the delivered cost of peaking power from conventional sources, and the next EIA analysis will almost certainly show a continuing drop in the installed cost of PV solar power in both utility-scale and rooftop applications.

In sum, because the complete nuclear fuel cycle relates intrinsically to nuclear weapons, degrades land and groundwater resources, discharges up to 2/3 of the energy it produces as waste heat into our already overburdened lakes and rivers, generates long-lived nuclear wastes that must be responsibly managed for millennia, requires vigilant control of radiation hazards to workers and neighboring populations, is slow to deploy, and requires massive amounts of upfront capital investment, nuclear power does not recommend itself as a broadly applicable, frontline defense against climate change. That said, is it still “on the table” as a potential tool against climate disruption, particularly if more benign and cost effective iterations of the technology can be developed, and stronger international barriers to proliferation can be developed to guard against its misuse in nuclear weapons? I think the answer to that is “yes,” but some modicum of humility, accuracy, and realism from nuclear power’s proponents is sorely needed.

To even sustain nuclear power’s current 19% share of grid connected electricity in the U.S., all the capacity represented by the roughly 100 currently operational nuclear units will need to be replaced in the 2032-2052 timeframe (assuming all current operating licenses are extended from 40 to 60 years), and sooner than that if more plants (like San Onofre and Crystal River recently) fail prematurely, or are retired for economic reasons (like Dominion’s smaller Kewaunee unit in Wisconsin that was recently retired). As of now, nuclear power is positioned to fail achieving even this limited objective, much less the wildly ambitious and wholly unsubstantiated role outlined for it in Porter’s piece.

A reasonable and realistic approach to nuclear power would be to prioritize deployment of more benign and cost-effective energy alternatives, meeting the carbon reduction targets that the best available scientific analysis deems critical to avoiding catastrophic climate disruption.

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Michael BerndtsonAug 23 2013 10:40 AM

Wow. The most intelligent and thorough rebuttal on this issue yet. Switchboard is making me manic with its posts. So it's me not you.

NYT seems to promote nuclear and many other energy options that have central control. Distributed solar and other renewables don't make a single entity (like an old school utility, manufacturer or engineering and construction firm) a bucket load of cash to distribute down to the softer sides like advertising. Plus many renewables companies are in the middle of a competitive market scrum that they don't have extra cash for funding commodities derivatives and Operas and such. Unlike say Oil and Gas for shale gas electric and electric utilities for burdensome nuclear power.

Here's another example of fake free market economics from our friends at nuclear power generations via LA Times:

"Edison tells customers they should pay for San Onofre shutdown",0,4633495.story

And on cost recovery for nuclear power plants throughout the project cycle regardless if the plant gets built or shuts down from Wash Post:

"Florida Utilities Can Recover Nuclear Costs, High Court Says"

So in sum, investors and corporations involved in nuclear power planning, design, construction, operations, abandonment and demolition will get paid whether or not a single watt of electricity was generated. Rate and tax payers will get stuck with the bill.

Robert HargravesAug 23 2013 12:15 PM

NRDC quotes misleading numbers, such as "solar PV at $3400 per kilowatt". But that is for peak power. The capacity factor for solar is only about 20%, so it's cost is equivalent to a five-times more expensive $18,000/kW plant operating full time. The maligned, cost over-run Okiluoto plant in Finland will nevertheless produce power for one-third of the cost of solar power being produced in Germany. For a full analysis of the unsubsidized cost of various alternative power sources, read THORIUM: energy cheapr than coal.

Bob WallaceAug 25 2013 02:10 AM

Robert, utility scale solar is now being sold on long term PPAs for around $0.10/kWh. The actual sales price is closer to $0.06/kWh after subsidies included.

City of Palo Alto 6.9c/kWh

New Mexico 5.8c/kWh

I ran the LCOE for Okiluoto 3, based on the costs given by the pro-nuclear Breakthrough Institute and using the DOE 30 year, 6.6% financing. The cost of electricity from that plant would cost well over 12c/kWh. There is no allowance in that LCOE for decommissioning, long term waste disposal, real estate costs, taxes, nor owner profits.

Bob WallaceAug 25 2013 02:25 AM

Christopher, the 2018 EIA numbers for nuclear are unrealistically low. The EIA assumes a 6.6% finance rate. Private money won't even consider loaning money to a new reactor at that rate.

The only way a new reactor build would receive that low a rate would be either by direct government loans or via government guaranteed loans. Either route requires taxpayers accept the risk and that has value. It is a subsidy which must be added to in order to determine the actual cost.

And some updates on solar costs.

By the end of 2012 utility-scale solar system prices in the US fell 29% from end of 2011 costs. They moved from $3.20/W to $2.27/W.

1,782 MW were installed in 2012 from 152 projects, up 134% over 2011

Greentech Media 4th Quarter, 2012 Solar Summary

Recently a utility scale solar array was installed in the UK for $1.59/watt. A large array is being installed in Spain for $1.44/watt. Those are non-subsidized prices.

Then, Deutsche Bank said that although the market in Europe had contracted, at least one third of new, small to mid size projects were being developed without subsidies. Multi-megawatt projects were being built south of Rome for €90c/W.

€90c = $1.20/watt.

$1.20/watt in the not so sunny US NE would generate electricity at about 7c/kWh and in the sunny SW for about 5.6c/watt.

Before 2018 we should catch up with Europe's prices. We're paying too much in 'soft costs', mostly permitting and customer acquisition (sales costs).

Bob WallaceAug 25 2013 02:28 AM

Any way to track this conversation?

Jerry NolanAug 25 2013 07:43 PM

We can thank the NRC and the anti-nuke political pressure from fossil fuel companies for exorbitant licensing fees, licensing delays, and unnecessary over building of reactors. Interesting that we could afford to build reactors years ago, but not today. Other enterprising countries are moving ahead with building reactors. Russia, China, and Canada are building reactors for other countries and making money at it. We will be dependent on buying reactors from other countries just as we became dependent on other countries for oil. Fossil fuel companies acquiesce to solar and wind, but nuclear power is a real threat to their monopoly of baseload power generation.

Christopher PaineAug 25 2013 11:10 PM

To Bob Wallace -- Thanks for your informative comments and the solar cost updates. While I too am a solar enthusisast, I would note that those solar cost numbers include neither needed short-term storage capacity for smoothing solar installation output fluctuations, nor the larger storage capacity needed for time shifting the output into the evening hours, when residential load increases significantly. While I see this needed storage capacity as a technical/cost challenge to be overcome, and not as a permanently operating argument against widespread solar PV adoption, it is not here yet, and the natural resource and embodied energy requirements asssociated with deploying it on a large scale can be very significant. This is not an argument against continued rapid growth of solar in the near term as a clean and cost effective peaking power resource, but rather a concern about how far and fast solar can be applied to displace current polluting baseload resources, such as coal, shale gas, and nuclear. That is why I believe that, at least until cost-effective and environentally sustainable solar storage pathways are proven, nextgen (and ostensibly safer) low-carbon nuclear should stay "on the table" and be demonstrated at modest scale, as China is now doing with the high temperature gas-cooled "pebble bed" reactor, as a backup in case a massive transition to renewables is delayed by failure to solve the storage problem. For the same reason, I believe the safety and manufacturing technology of the supposedly "passively safe" AP1000 now under construction in China and the U.S. using innovative modular construction techniques, should have been thoroughly explored and tested first in a small half-size AP600 demonstration unit, which was in fact the original design back in the 1990's. The premature scale-up and construction of these units, without any prior demonstration of their alleged passive safety and reliability via real world experience with a working prototype, was foolish and already looks today as though it will end badly, at least in the U.S.

Christopher PaineAug 25 2013 11:46 PM

To Robert Hargraves -- You wrote: NRDC quotes misleading numbers, such as "solar PV at $3400 per kilowatt..." I do not believe this number is misleading, as I also cited the EIA's levelized cost calculation on a comparable dollars-per-megawatt hour basis for both nuclear and solar. It is entirely legitimate to raise the issue of up-front capital costs for PV solar versus nuclear projects, as well as the inherent "lumpiness" and inflexibility of today's massive nuclear power projects, as these are major obstacles to nuclear's market acceptance as a future electricity resource. As a nuclear power advocate, you are clearly not alone in wrapping your mind around the dramatic solar cost reductions that have ocurred since 2008, and as Bob Wallace pointed our, are continuing to occur. But as I pointed out in my response to him, there may yet be a role for low-carbon nuclear in a renewables dominant electricity supply system. Much hinges on the pace of progress in solving the cost-effective clean energy storage problem. And you are right to point out the potential of thorium-based fuels. I support continued research and development of thorium fuels that can be used as non-proliferative substitutes for uranium and/or plutonium mixed-oxide fuels. While the current structure of the U.S. electricity supply system tends to place distributed PV solar in conflict with the conventional implementation of large central station nuclear, this need not be the case in the future. Nuclear advocates need to think more deeply and constructively about how new implementaitons of nuclear could help underpin the transition to renewable energy, rather than letting carbon-polluting natural gas play the role of the "firming resource" indefinitely. But by and large, I see the nuclear industry adopting a carping and generally negative attitude toward renewable energy resources, a legacy perhaps of the fact that nuclear, natural gas, and coal are often joined at the hip within the corporate skeletons of most electric utilities and large generating companies. Thank you for visiting my blog, and I hope you will continue to comment when the spirit moves you.

Bob WallaceAug 26 2013 12:08 AM

Christopher, solar is not 24/365 and using storage to make is so would be cost prohibitive. Solar is available when it is available and it is becoming cheap.

Wind is also not 24/365 but is available many more hours than is solar and is already cheap.

A combination of solar, wind and storage is likely more affordable that new nuclear. Let's try some numbers.

Wind is now producing at 6c/kWh (no subsidies). Solar is now producing in the US for 10c and less in Europe. Pump-up hydro is roughly 6c/kWh (based on a recent Swiss study).

Let's assume we get 30% of our electricity directly from solar, 40% directly from wind and the last 30% from stored wind.

(0.3 * 10c) + (0.4 * 6c) + (0.3 * 12c) = 9c/kWh

Now that is, admittedly, a crude price model but I think accurate enough for present needs.

New nuclear cannot deliver non-subsidized electricity for less than 12c/kWh.

We could adjust to 50% stored wind, 20% solar and 30% wind and still be under 10c.

By the time a new reactor could be brought on line it is likely that the cost of wind will have dropped by a least a penny and solar by as many as four. We could have converted a few or our 80,000 existing dams to pump-up storage.

We can get coal off our grids fastest and cheapest with a combination of renewables and storage.

Bob WallaceAug 26 2013 12:20 AM

" Much hinges on the pace of progress in solving the cost-effective clean energy storage problem."

We have approximately 80,000 existing dams in the US. We use about 2,500 of these for electricity generation.

I worked my way through an inventory of existing dams on federal lands and found that about 10% of the dams which are not being used for generation had adequate head for pump-up and were reasonably close to existing transmission lines.

Very roughly, that suggests we could have over 7,000 candidate dams for pump-up conversion.

In the next few months a new zinc-air battery by EOS Systems will go on multiple grids around the world, including ConEd. The manufacturer claims 'total cost' of storage at 10c/kWh. (This includes all costs including taxes and profits.)

Ambri's liquid metal battery is expected to reach manufacturing in 2014. If it works as well as the prototypes being tested then storage will become extremely cheap.

There are other batteries under development but these two are the furthest along (as far as I know). The EOS air-zinc is a bit expensive for long term storage but would find a welcome role in localized storage systems due to its ease of installation and siting.

If no batteries appear we could do quite well with pump-up hydro. We certainly have plenty of locations, and that's without considering closed-loop.

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