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October 25, 2005

Naughty Georges, Naughty.

Georges Monbiot is a tad disingenuous today, mentioning a report and not mentioning the conclusion which kills his argument:

A recent review by the economics consultancy Oxera shows that even if you exclude the cost of insurance and include the benefits of emissions trading (which attaches a price to carbon dioxide), "a programme of public assistance ... would be needed to boost predicted [rates of return] to a level that is acceptable to private investors". The consultants suggested that £1.6bn of grants might be enough to tip the balance in favour of a new nuclear programme.

OK, the Oxera report.

But let us also forget the costs of insurance. If the public sector (or for that matter, given that funds are limited, the private sector) invests in nuclear power, is this the best use to which the money can be put? This is the question addressed in a new paper by the physicist Amory Lovins.

He begins by examining the terms of reference used by people like King, who compare nuclear power "only with a central power plant burning coal or natural gas". If the costs of construction come down, and if the government offers big enough subsidies and makes carbon emissions sufficiently expensive, Lovins says, nuclear power might be able to compete with coal. "But those central thermal power plants are the wrong competitors. None of them can compete with windpower ... let alone with two far cheaper resources: cogeneration of heat and power, and efficient use of electricity."

Ten cents of investment, he shows, will buy either 1 kilowatt-hour of nuclear electricity; 1.2-1.7 of windpower; 2.2-6.5 of small-scale cogeneration; or up to 10 of energy efficiency. "Its higher cost than competitors, per unit of net CO2 displaced, means that every dollar invested in nuclear expansion will worsen climate change by buying less solution per dollar." And, because nuclear power stations take so long to build, it would be spent later. "Expanding nuclear power would both reduce and retard the desired decrease in CO2 emissions."

Which carefully ignores the result of the Oxera report. The Telegraph:

Wind farms will require £12billion in public subsidies, almost three times as much as nuclear power plants will cost, according to a new report.

The Guardian:

Parker likes to show you a report by the economics consultancy Oxera stating that a set of new nuclear power stations would cost about a third as much as "the £12bn cost of the renewables programme".

Georges old boy. Having mentioned the Oxera report, don’t you think you should mention its conclusion? Even if only to reject it?

October 25, 2005 in Nuclear | Permalink

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Comments

So if I have read this right an inveestment of between 1.6 and 4 billion will buy us a set of nuclear powerplants with low carbon emissions compared to 12 billion for the windmills Mr Blair seems to like.

This would then leave between 8 and 10.4 billion to spend on making elecricity use more efficient and thus further reducing the effect on the environment.

Can anyone tell me why The Dear Leader is pushing for every scrap of natural beauty left in Britain to be covered in windmills?

RM

Posted by: Remittance Man | Oct 25, 2005 11:06:14 AM

So if I have read this right an inveestment of between 1.6 and 4 billion will buy us a set of nuclear powerplants with low carbon emissions compared to 12 billion for the windmills Mr Blair seems to like.

This would then leave between 8 and 10.4 billion to spend on making elecricity use more efficient and thus further reducing the effect on the environment.

Can anyone tell me why The Dear Leader is pushing for every scrap of natural beauty left in Britain to be covered in windmills?

RM

Posted by: Remittance Man | Oct 25, 2005 11:08:07 AM

Ooops, the old dyslexic finger problem has returned.

RM

Posted by: Remittance Man | Oct 25, 2005 11:39:38 AM

Do the calcs for nuclear cost per energy unit include decommissioning costs, and costs of cleaning up accidents etc? this is a genuine question, not being funny.

Tim adds: As far as I remember from the Oxera report, yes.

Posted by: angry economist | Oct 25, 2005 3:20:06 PM

Well, we have several sites used to having nuclear facilities that are actively in the process of decommissioning them. Could we suggest or ask if they would like us to stick another nuclear facility there? e.g. Caithness.

How will Tony get this through the Greenpeace political machine? because they are a political organisation, and not based on any scientific sense or rationality.

Posted by: angry economist | Oct 25, 2005 4:26:58 PM

the oxera report was for the cost of replacing the old stations with new ones, wasn't it? I'm no expert on how much of the old structure you can salvage, but I suspect that the answer might be enough to drive quite a wedge between the cost of renovating old stations and building new ones.

Posted by: dsquared | Oct 25, 2005 7:58:01 PM

This is all a bit confusing. Monbiot says that the OXERA report excludes insurance costs. The Guardian also says that the OXERA study excludes waste cotst.

This would mean that the OXERA figure quoted refers only to the pure financial subsidy costs of supporting nuclear power as compared to wind, and leaves out the externalities relates to waste disposal and accident risk.

If that is true - and I have not seen the study myself - then that's not a great starting point given that accident risk and waste are two major concerns relating to a new generation of nuclear stations.

From what I recall some old EXTERNE estimates put the costs of renewables and nuclear per KwH at a similar level a few years back, taking all externalities into account. But I'll see if I can find something more recent.

The Finns have decided nuclear is a reasonable cost option, but what I recall the economics of that is rather murky.

Posted by: rjw | Oct 26, 2005 3:08:16 PM

the franks(the most logical people on the planet,just ask them) have gone big for nuclear...can 50 million frenchies be wrong??

Posted by: embutler | Jul 18, 2006 2:54:14 PM