Nuclear Power

The New Nuclear Energy Revolution

Throwing off excessive regulatory precaution will bend the nuclear cost curve down, argues new study

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Escalating costs for nuclear power plant construction in the U.S. were not inevitable, according a new study in Energy Policy. They were largely the result of the increased regulation that followed the Three Mile Island reactor meltdown in 1979.

To get a better handle on nuclear power construction cost trends, the study compares the experience of building plants in seven different countries over the past 50 years. The researchers analyze power plant construction in the U.S., France, Canada, West Germany, Japan, South Korea, and India. But before we get to that, let's take a quick back-to-the-future look at nuclear power.

In 1966, Alvin Weinberg and Gale Young of the Oak Ridge National Laboratory proclaimed that the Nuclear Energy Revolution was about to take off. And why not? After all, the cost of building nuclear power plants was declining sharply. "Nuclear reactors now appear to be the cheapest of all sources of energy," they declared. "We believe, and this belief is shared by many others working in nuclear energy, that we are only at the beginning, and that nuclear energy will become cheap enough to influence drastically the many industrial processes that use energy." Such optimism seemed more than justified. The Atomic Energy Commission—the lead nuclear regulatory agency at the time—was predicting that more than 1,000 reactors would be operating in the United States by the year 2000.

Had that transformation actually taken place, the entire U.S. 1,000-gigawatt electricity generation sector could notionally have been replaced by 1,000 nuclear power plants, each with a generating capacity of 1,000 megawatts. Among other things, this would have made the country's greenhouse gas emissions more than 30 percent lower than they currently are.

Weinberg and Young also estimated that the capital costs to build a new coal-fired power plant or new nuclear plant were both around $110 per kilowatt of generating capacity ($804 in 2015 dollars) and falling. The latest figures from the Energy Information Administration report that the overnight capital cost for a modern coal plant is $2,917 per kilowatt; for an advanced nuclear plant, it is $5,366 per kilowatt. In other words, the costs for coal plant have escalated 3.6-fold faster than the inflation rate, 6.7-fold faster for nuclear. In comparison, the capital costs for a conventional natural gas power plant stands now at $912 per kilowatt.

Interestingly, Congress in 1978 passed the Powerplant and Industrial Fuel Use Act, which actually prohibited the use of natural gas or petroleum as energy sources in any new electric power plants; it also mandated that all new electric power plants have the capability to burn coal or any alternate fuel as a primary energy source. With copious supplies of cheap natural gas made possible by fracking shale, scores of coal-fired plants have been converted to burning natural gas, and utilities have announced the closure of 200 out of the nearly 600 coal-fired generation plants in the U.S. Absent a price on carbon dioxide emissions, cheap natural gas poses a big challenge to any efforts to build new nuclear power plants.

But set that aside for the moment, and consider the new Energy Policy study.

The authors—Jessica Lovering, Arthur Yip, and Ted Nordhaus, all associated with the Breakthrough Institute—focus chiefly on overnight construction cost trends. The overnight construction costs are the dominant component for the lifetime costs of nuclear power; they include money spent on such things as land, site preparation, engineering, procurement, and construction services. Like Weinberg and Young, the Breakthrough Institute writers find that in the mid-1960s, the capital costs for nuclear construction had been steeply declining, falling to around $600 to $900 per kilowatt of generation capacity in current dollars. But that proved to be the nadir in U.S. nuclear construction costs.

The late '60s and early '70s saw a plethora of new environmental regulations. For example, in 1971 the District of Columbia Federal Court of Appeals ruled in a case brought by the Sierra Club and the National Wildlife Federation that the Atomic Energy Commission must change its rules to conform to the new National Environmental Policy Act's requirement to consider the environmental impact of each new power plant. In addition, accidents such as a fire at the Brown's Ferry reactor and a rapid reactor cool-down due to an electrical short at the Rancho Seco plant led to tightened, and more expensive, safety requirements and equipment back-fits. As a result, construction costs more than doubled during the 1970s to a range of $1,800 to $2,500 per kilowatt of generating capacity. Some enhanced safety measures were clearly called for, but federal regulators arguably overdid it.

The analysis of the construction costs for the 51 U.S. reactors completed after the Three Mile Island meltdown is divided into three groups. For plants that had received their operating licenses before the accident, costs mildly escalated to a range of $1,800 and $3,000 per kilowatt of generating capacity. Construction costs for 38 of the plants averaged between $3,000 and $6,000 per kilowatt, and 10 reactors eventually cost between $6,000 and $11,000 per kilowatt. Overall, the researchers find that after Three Mile Island, increased regulatory uncertainty and mounting technology back-fit requirements substantially boosted construction costs. As utilities saw costs climbing, orders for 120 reactors were canceled between 1972 and 1982, and there were no nuclear plant construction starts in the U.S. from 1978 until 2013.

Things proceeded differently abroad. As in the U.S., nuclear construction costs steeply declined in France, West Germany, and Canada during the 1960s. In the 1970s, their costs began to rise but not nearly at the American rate. Basically, their inflation-adjusted costs doubled whereas U.S. costs have more than sextupled. In other words, the trend in nuclear construction costs in these countries is similar to the cost increases for building new coal-fired plants in the United States.

In Japan, nuclear plant construction costs doubled in the 1970s and then remained flat for the next 30 years. In India, nuclear construction costs rose 150 percent between 1976 and 1990 but have since fallen by 10 percent. And in South Korea, the cost of building nuclear plants has fallen by 50 percent since 1972. America's steeply rising cost trend for nuclear construction is clearly the outlier.

As an aside, the researchers note that the investment prices for solar and wind in the U.S. rose steeply between 2002 and 2008. For example, the capacity-adjusted price of a wind turbine rose during that period by 100 percent. "Rather than predict that wind power cost would continue to rise or that the technology was inherently expensive," they tartly observe, "most analysis focused on understanding the drivers of these cost increases." In this case, price increases were driven by rising steel costs, labor expenses, diseconomies of scale, and currency fluctuations.

So what accounts for the difference between the U.S. experience and those of the other countries? For one thing, countries that had stable or falling costs generally standardized their reactor designs and often built two plants at the same site. "How costs evolve over time appears to be dependent on different regional, historical, and institutional factors at play," the authors argue. "Factors such as utility structure, reactor size, regulatory regime, and international collaboration may play a larger effect. Therefore, drawing any strong conclusions about future nuclear power costs based on one country's experience—especially the U.S. experience in the 1970s and 1980s—would be ill-advised."

Can the U.S. nuclear construction cost curve be bent downward again? And more importantly, can new nuclear power generation cost less than current fossil fuel alternatives, especially natural gas? Presentations at the recent Advanced Nuclear Summit in Washington, D.C., suggest that this might be possible. At the very optimistic end, the nuclear start-up ThorCon claims that the capital costs for its molten salt reactor would amount to $700 per kilowatt of capacity. Less optimistic analyses for new reactor designs put the costs at around $2,000 to $3,400 per kilowatt. This is comparable to building a coal-fired plant, but considerably more pricey than natural gas plant construction. On the other hand, Terrestrial Energy estimates that, if fuel costs are taken into account, its molten salt reactor would produce electricity at a lower cost than do natural gas plants.

In any case, throwing off excessive regulatory precaution to speed up the approval of new advanced nuclear power plant designs would go a long way toward finding out which energy sources are ultimately cheaper and safer for people and the planet.

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  1. “Escalating costs for nuclear power plant construction in the U.S. were not inevitable, according a new study in Energy Policy.”

    Study shows that government over-regulation and uncontrolled litigation by terrified luddites increases costs of energy projects.

    Details at 11.

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    2. Blackouts and reduced access to energy decrease the average life expectancy of a population. This is less visible than firing rounds or hurling grenades into that population, but the overall effect is the same. Once collectivist fanatics, now deprived of Soviet subsidies, are understood to be terrorists and judges are educated in physics rather than Creation Science, lynch-mob litigants will no longer interfere with power generation.

  2. Look, this “click the article on H&R” and get a stub that says “click to read whole article” is annoying. Doubly so when the whole article is on reason.

    Look, I’m in that population that sends money directly and uses ad blocker on the site, so you’re wasting money forcing us to load additional pages. If the article is on reason there’s no reason [drink] the link shouldn’t go directly to said aritcle from H&R.

    1. I only got one level of link indirection…

  3. Who needs nuclear when you have composting and geothermal vents?

    1. Composting?!?! COMPOSTING?!?!? Come ON, now, that is WAY un-hippa-groovalistic!

      I’m developing a way to run my house on bunny kisses, unicorn farts, and Democrat-party-rationality!

      1. So, you’re planning on living in the late 18th Century. Sounds legit.

        1. There were lots of unicorns in the 18th century

    2. Processing tobacco leaves produces heat just like composting? maybe we could harness that heat to generate electricity.

      I’m sure the left’ll support it!

  4. Nobody is going to build a nuclear power plant at current oil prices — and where are you going to find long-term production contracts when the industries you need to supply already have moved overseas…

    1. I don’t know if nuclear power is ever going to be profitable as a private enterprise, but we’re never going to find out as long as the NRC, DOE, and EPA are calling the shots.

      1. k: Too true, but other countries are likely to test out new cheaper non-LWRs.

    2. We don’t burn oil to generate electricity.

      1. Actually, “we” burn oil and gas at peak to avoid blackouts. When the South Texas Nuclear project was being licensed, “waste” americium sold at some 1500 1980 dollars a pound. Today Americium costs $1500 a gram! Plutonium pellet RTGs were still running equipment left on Luna in the 1970s using the Seebeck effect last I checked. I wish I could have some RTGs to power electronics and warm a cabin out in the woods far from the grid.

  5. That regulatory caution did not come from nowhere. It was the result of a coordinated effort by professional leftist activist and their allies in the media. In less than a decade nuclear power went from a technological miracle destined to power humanities future to a pariah technology akin to tobacco or agent orange in the public’s mind.

    The entire thing was of course based on lies. The worst part is that I am not even sure they the American left knows why they decided to launch the jihad against nuclear power. Sure, the post war left’s general hatred of prosperity contributed to it but there was more than that. Things like petroleum produced a lot more prosperity than nuclear power and while they hated petroleum they didn’t hate it, back then at least, with anything like the passion they hated nuclear. They were not having all star rock concerts at Madison Square Garden to stop oil production in the 70s. Hollywood wasn’t making any A list movies about the menace of oil the way they were about nuclear.

    It was like after the Vietnam War ended and Nixon resigned, they needed a new enemy. Their entire purpose in life revolved around protesting something and with Vietnam over and Nixon out of office all of the obvious choices were gone. So, they settled on nuclear. You really can’t overstate how vain, ignorant, and destructive the American Left has been to the country.

    1. I was under the impression that they linked it to nuclear proliferation. Any splitting of atoms was bad juju.

      1. Maybe they didn’t read the papers much and missed it but the US government already had nukes in the 70s. I can totally see how they would be stupid enough to believe that stopping civilian nuclear power would somehow cause the US to give up its nuclear weapons, but I think there was more going on than that.

        1. It also doesn’t help that the general public has next to zero understanding of how a nuclear plant actually works. It would not surprise me if a fair number of people believed that tiny nuclear bombs were going off in the core of a reactor, threatening to get out at any moment and kill everything within a 100 mile radius. The media might – *might* – be only slight less misinformed, but that’s being generous.

          1. That’s absolutely true. Just look at the Chernobyl blunder. When it happened “experts” were on the air predicting hundreds of thousands to millions of deaths would result from the silent killer radiation. In reality the incident only killed a few dozen people, and they all died in the actual explosion, or to acute radiation sickness in the immediate aftermath. There may have been a few hundred “extra” cancer deaths over the next several decades, but to make that conclusion you have to go pretty far down the epidemiology rabbit hole.

            Then there’s Three Mile Island, which effectively killed the nuclear power plant construction industry even though not a single person was harmed in any way.

            I wouldn’t be surprised if the average American thought both of those incidents involved nuclear explosions and mushroom clouds.

            1. The VA has killed more ppl than nuclear power.

              1. Almost everything has killed more people than nuclear power.

                1. “Have no fear from atomic energy” – Bob Marley

            2. Like transistors, there are 2 kinds of nuke plants. An NPN xstr only requires a grounded pin to saturate [turn full-on] like the Ruskie’s Chernobyl. It was built the easy way and melted down during tests that ran away while interlocks and alarms were disabled. US plants are built like a PNP xstr so that any over-heating quashes itself [forces the xstr to turn off].

              1. No, just, no. On so many levels.

          2. It burns gluten, right?

          3. You mean that’s NOT how it works?

      2. I was under the impression that they linked it to nuclear proliferation.

        True? the US had (has?) a policy to encourage only those reactor designs that could be used to produce weapons grade plutonium and uranium. The result of that policy was that American nuclear engineering college programs concentrated almost exclusively about plutonium and uranium. American nuclear engineers are now just rediscovering thorium.

        1. Civilian power reactors do not produce weapons grade material. If you want to make a plutonium bomb you use a very different type of reactor: graphit core and you run it in short bursts. Thorium has significant problems as a solid fuel and really isn’t needed for a very long time.

          All the money is in fuel rod assemblies. That and inertia are/were the biggest reason we stayed on the cycles and designs we did.

          1. But thorium is perfect for a molten salt fuel. No processing necessary.

            1. Thorium molten salt reactors process the fuel continuously to remove some of the fission products. They must also deal with the remainder of the FPs that stay in the circulating fuel, which means that they have to have decay heat removal available, just like current reactors. When they “dump” the fuel into dump tanks, they STILL have to deal with the decay heat.

              The thorium proposals are all a scam for government funding to develop an enormous amount of technology to deal with the liquid fuel. Only a tiny bit of that was developed during the MSRE project – they took 40 years to figure out how to decommission the project, and I do not think that it is quite complete, yet.

              1. I meant the thorium doesn’t have to be enriched.

            2. Nuclear power was killed by the progressive movement, which did not want our society to develop sources of abundant, inexpensive energy, for many reasons. One of the main ones was that it would put a LOT of people out of work. People who mine and transport coal, people who drill for oil and gas and transport it. 20% of the electricity in the US comes out of three factories that produce nuclear fuel. They don’t need mile-long trains to transport it – it could be transported in small panel trucks 15 ft long.

              The progressives have figured out now that they really hate people, and they want to shutdown all technology that rises above the level of a simple fire. The wheel is inherently evil, and every machine more complicated than a wheelbarrow should be banned.

              They now want us to de-volve back to a simpler existence, with them, of course, in charge.

              1. Fire Bad!

    2. J and other: Y’all might be amused (and disheartened a bit) to read my 2009 column “The Cultural Contradictions of Anti-Nuke Environmentalists” in which I detail activist Gus Speth’s youthful opposition to nuclear power.

      Speth, who has had a long career as an environmental activist, was the dean of the prestigious Yale School of Forestry and Environmental Studies, former Administrator of the United Nations Environment Program, and founder of the World Resources Institute, an environmentalist think tank. In his 2004 manifesto Red Sky at Morning: America and the Global Environmental Crisis Speth brags about how as an NRDC attorney he helped to kill off the fast breeder program – the same program that if had been implemented would have gone a long way toward addressing man-made global warming which he now declares is the “single greatest threat” to humanity.

      You can’t make this stuff up.

      1. Fast breeders killed themselves off but point still valid.

    3. A big part of it is fear of the unknown. The only thing scarier to the scientifically illiterate than a “chemical” is “radiation”. They don’t understand it, so they fear it. Conservatives share that fear, but they don’t share the progressive hate for prosperity that you mention, so they’re more willing to tolerate that fear so long as the rewards are evident.

      1. It doesn’t help that the US government lied about it.

        During the 1950s, the US told people that the above ground nuclear testing resulted in only a small amount of radiation exposure. In reality, Americans were exposed to 15-70 times the amount of radiation the government claims, particularly in the Plains States and Mountain States. One of the effects of this is that high levels of thyroid cancer are expected in people who grew up in the 1950s:

        Also, children who drank lots of milk in the 1950s are more at risk. The fallout landed on grass, which was eaten by cows, collected in milk and deposited in human thyroid glands. Because children have a higher metabolism and typically drink more milk, they are most affected.

        1. Expected? If they grew up in the 50s then they are in their 70s now. What is the average life expectancy?

          1. Antinuclear fanaticism, like any other revealed religion, is largely made up of prophecies. Doomsday is just around the next corner, and if you ask for evidence, you’re an evil denier. In the real world, life expectancy and access to energy correlate as perfectly as death and old age. Show me where nobody lives past 50 and I’ll show you socialism without power plants.

    4. Oddly, Nixon was elected to get us out of Vietnam.

  6. Something just seems massively wrong in those EIA numbers but they’re transcribed correctly. Gas turbines aren’t cheap and if you want high efficiency ccgt then you got the same basic cost for the steam plant. So all of the coal cost has to be in the coal handling and the boiler but that still seems absurdly large.

  7. It seems to me Ronald one would have to be careful about drawing any conclusions from this study regarding the direct relationship between US regulations and nuclear costs.

    They emphasize how cost curves were different in many countries, but that doesn’t mean there weren’t regutions in those countries as well. Is South Korea absent in nuclear regulations? In fact they seem to suggest regulations are just one factor in costs, which clearly is true.

    Which regulations should be done away with? Those regarding waste disposal? Those regarding Q&A? It is after all a nuclear reactor, and not a wind turbine.

    1. How about the ones prohibit a nuclear recycling program like France’s:

      The United States officially banned reprocessing of spent fuel for power reactors in 1977, during the administration of President Jimmy Carter, who feared that proliferation of reprocessing technology would make it too easy for wayward nations or even terrorist groups to obtain the raw material for bombs.

      The main benefit:

      “If we do reprocessing and recycle, we can increase the capacity of Yucca Mountain 100-fold,” says Phillip Finck, a nuclear engineer at Argonne National Laboratory, in Illinois. Suddenly, instead of being crammed full on its opening day, Yucca Mountain would be able to handle everything the industry could throw at it until 2050 or beyond, staving off searches for additional Yucca Mountains.

      The massive reduction in nuclear waste alone makes it worth it to me.

      1. That’s because you do not understand that the dictatorship of the proletariat is Ordained by Revealed Historical Necessity tio rise and frush the serpent-head of fascism, or that Armageddon and the Rapture will any day now lift us off of this 4000-year-old planet into the bosom of Jesus and cast all the deniers and atheists into Hellfire and Damnation. You have unpopular values!

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  9. So in one corner, we’ve got the “nuclear power is an expensive, hazardous government-sponsored panacea” crowd, the “yeah, but it would be part of the carbon-free future if we didn’t regulate it to death” crowd in another corner, and the “nukes are an evil capitalist conspiracy to destroy the planet” crowd. Am I missing anyone?

    1. You are missing the people who value life, understand the definition of energy and know the dimensions of its units of measure. Soviet Socialism needs human slavery, not energy slaves. Televangelist National Socialism needs wars that kill soldiers so religious dictators can fondle young widows–not be vaporized like they deserve. Nuclear energy is only attractive to libertarians interested in freedom and life. It does not appeal to socialist worshippers of parasitical bureaucracies or mystical panderers to altruist torture and martyrdom.

  10. Cato had me convinced that nuclear was just a victim of its own problems regulations being a background issue. This article forces me to reconsider that. Well done Bailey.

  11. This article understates the estimated ThorCon cost of $700 per kilowatt of generating capacity. The Next Big Future article it references says $700/kW for the power conversion steam turbine-generator, plus $500 for the nuclear island.

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  13. There are not enough knowledgeable engineers or nuclear capable industry facilities to produce a large number of nuclear plants quickly. The Finns and the French have had problems re-learning how to pour nuclear-grade concrete.

    The nuclear industry needs a comittment to a long-term, stable number of construction projects for evolutionary reactors. If someone wants to experiment and spend money to develop new designs, then they should be given part of the former National Reactor Testing Station in Idaho to play games and spend their own money.

  14. Arguing the cost of conventional reactors (Gen3, Gen3+) is rather irrelevant in a world that will shortly leap to molten salt reactors as the answer to ALL of its prayers – iherent safety, ability to burn “nuclear wastes: and conventional uranium so efficiently that fuel costs are virtually zero, build costs that are far cheaper due to the much less massive containment required, the absence of any need to create expensive sfaety systems, the much lower cost required to prepare the site, the lower costs due to manufacturing practically all components in a factory, etc, etc. Build costs
    estimated to be not much more than half current costs for building a Gen3+ reactor in the U.S. Energy costs will
    be the cheapest of all technologies. The future of power is molten salt reactors, and theChinese know it as well and are pouring money into an accelerated development program. Even the braindead renewable folks cannot find fault with a molten salt reactor.

    1. The braindead worship death. Anything that enables folks to do useful work–such as electric power–is anathema to mystical slave mentalities. Just as conservatives will believe any lie–no matter how manifestly untrue–to bolster their fantasies that weed leads to communism, cocaine arouses in white women a desire for mulatto men or that LSD (rather than fanatical parents like Linkletter) causes youngsters to defenestrate, so the socialists rednecks suicidally call “liberulz” will believe any idiocy that makes nuclear energy look unsafe. Nuclear energy was, after all, designed to rid the world of National Socialism. Socialists are mindful of technology that can zorch their slave-utopias by eliminating the need for slavery and evaporating altruist dictators.

  15. Reactors are difficult targets to knock out compared to anything else–even with nuclear weapons. It made sense in the 1970s and 1980s for the USSR to program the Bernies, useful idiots and fellow travelers in These States to shriek in fear of radioactive hobgoblins as 45,000 of them a year were snuffed by coal particulates. Guess what? Communism and national socialism cannot compete with less coercive regimes and went bust. If you think nuclear reactors are dangerous, try on another Atlas Shrugged blackout like in 1959 or 1965 for size. A blackout is a health hazard only a communist weapons plant fire could possibly match for danger.

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