Ron Smith: Cheaper and even safer to go nuclear

Ron Smith

There is a renewed interest in nuclear power around the world stimulated by the growing challenge of meeting the global need for energy without exacerbating the consequences of continuing fossil fuel combustion.

It was already clear that nuclear generation was cleaner and safer than any other technology and that the supposed problems of waste disposal were always exaggerated. Now the World Nuclear Association (WNA) has issued a detailed review of the economics of nuclear power generation which paints an even more optimistic picture. Its conclusions are worth noting in a country that is having increasing difficulty in ensuring adequate power supplies for its citizens and industry in the years ahead.

Several factors seem to have contributed to a general decrease in the unit cost per kWh of nuclear power.

These include lower construction costs for nuclear plants because of a progressive standardisation of design and improved methods; lower costs of finance (because of more realistic perceptions of financial risk and streamlining of licensing procedures); lower operating costs and improved performance of the plants; and, finally, lower waste disposal and decommissioning costs (although, these were, anyway, only around 1 per cent of total costs).

The economic advantage is further enhanced by significant increases in the cost of fossil fuels - a trend most experts think likely to continue.

It also needs to be noted that nuclear power generation costs incorporate all the major external costs.

This is far from the case where carbon fuels are concerned, where no account is taken of the consequences of the effusion of greenhouse gases or particulates in assessing the "costs" of power production. (Much the same applies to the amenity loss and opportunity cost of damming rivers and using the accumulated water for power production.)

The nuclear association conclusions are based on analysis of several recent reports by the OECD and the United States Federal Energy Regulatory Commission, as well as specialist studies by MIT and the University of Chicago, and many European Government agencies.

Conditions vary from country to country and it isn't true to say (as of this year) that nuclear power is cheaper than coal or gas everywhere; but the trends are unmistakable and with the widely predicted continuing escalating costs of oil and gas and the possibility of carbon taxes, the cost advantage of nuclear generation is bound to increase.

Coal is more plentiful and thus more resistant to price increases. The major external here is the horrific human cost of coal extraction, which ought to be a bigger concern than it is.

Overall the WNA study comes to an unequivocal conclusion, "nuclear is the cheapest option in the majority of countries".

For New Zealand, the contemplation of nuclear power is a particular challenge, considering the value that so many New Zealanders see in our anti-nuclear stance. Our Resource Management Act would also present a major difficulty since nuclear power is very capital intensive and thus vulnerable to cost escalation in the event of construction delay.

We would need to determine how important it was to us and, if we thought it was important, we would need to ensure that a realistic timetable was set and adhered to.

If we were prepared for that, we could have a power source that was reliable in a way that scarcely any of its competitors are. It would be a source that did not require landscape-disfiguring reticulation from one end of the country to the other (we could build the power station where we wanted the power). It might even enable us to decide how best to use the water collected behind existing dams (recreation, or agricultural development, instead of simply power).

It is a little over a quarter of a century since a royal commission reported that nuclear power was not immediately necessary for New Zealand but that it probably would be required by the end of the century. That date is now well passed. It is time to take the matter up seriously, again.

* Dr Ron Smith is director of international relations and security studies in the department of political science and public policy at the University of Waikato.