This past month, both The New York Times and CleanTechnica.com reported on a paper from Duke University in North Carolina claiming that the costs of solar energy and nuclear energy have passed an historical crossover point at 16 dollar cents per kilowatthour. Solar photovoltaics are now supposed to be a lower-cost alternative to new nuclear plants. How accurate is this claim? Why are the figures on the cost of nuclear energy so divergent? And to what extent are solar photovoltaic energy and nuclear energy competitors?
In The New York Times, an editor’s note was added one week after publication admitting that the article gave an 'imbalanced presentation' of the issue, since the concerned study was prepared for an environmental advocacy group and therefore did not take into account other points of view and did not contact the Nuclear Energy Institute. Personally I also have my doubts concerning the extent to which the figures of this study represent hard facts. You can make these kinds of studies prove anything you want them to.
Nevertheless, it is certainly a fact that the cost of photovoltaic energy, after a period of stagnation, has been decreasing rather sharply in the past two or three years. And it is also true that PV energy is one of the cleanest market-ripe energy solutions available today, even if you take the material and energy use during the manufacturing of the panels into account.
The cost of projected nuclear power plants is much more difficult to assess, as it incorporates a multitude of risk factors. The high uncertainty associated with the construction cost and time frame is one of the main disadvantages of this technology. Because of this, private investors are not very keen on investing in new nuclear power plants. Without increased government support (tax credits, loan guarantees...), it will be difficult for new nuclear power plants to be built in the near future.
The high uncertainty that is involved in nuclear constructions is inherent to projects that have a total commitment to safety. 99% safe is not enough for a nuclear power station; the risk should be 'ALARA', as they say in nuclear jargon, 'As Low As Reasonably Acceptable'. One cannot take 'calculated risks' on nuclear safety, and what is not calculated, is uncertain. Or to put it another way: the financial risk and the nuclear safety risk have an inverse relationship, and since the latter is kept as low as possible, the financial risk is inevitably high.
If this high risk is combined with Murphy’s law, that everything that can go wrong does go wrong, you get the example of the struggling Olkiluoto III power plant in Finland, one of the few nuclear plants that are currently under construction in Europe. Licensed in December 2000, the commissioning date for this unit was first set to May 2009. After postponing this deadline several times, it has now been set to 2013. After Siemens has withdrawn, the remaining contractor Areva is in a dispute with the utility company over who will bear the cost overruns. This example will certainly not stimulate investors and contractors to step into similar projects.
Because of the high risk that is involved in these kinds of projects, the nuclear industry in the US has proposed a financing system that requires electricity users to pay for the cost of new reactors during their construction phase. In other words, the financial uncertainty is passed on to the consumer. With construction periods such as that of Olkiluoto, that would make electricity users start pay higher prices 12 years before the plant is actually commissioned. It is hard to imagine broad public support for such a measure.
So has photovoltaic power become cheaper than nuclear power? In fact, the question itself maybe starts from a false premise. Photovoltaic energy and nuclear energy can hardly be seen as competitors today. Perhaps the competition for nuclear power lies rather in other types of carbon free, large-scale centralized power plants, such as concentrated thermal solar power plants and coal fired power plants with carbon capture and storage. These are the technologies that we have on hand to fill the gap between distributed renewables and the high quantity, availability, and reliability of power supply that is demanded. Maybe in the future, highly efficient cells will bring solar PV power to the scale of nuclear power, but today, cost is not the only obstacle to large scale commercialization of solar PV (see also the Whitepaper 'Integrated Energy Planning').
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