Renewables versus Nuclear – A Net Cost / Benefit Report
I came across an interesting article in The Economist (July 26, 20141) that compared net costs per year per MW compared with coal baseload generation. It looked at wind, sun, nuclear and gas compared to coal. The summary figure as follows:
Clearly, wind and solar don’t fare well whereas nuclear and gas power are the clear winners. This research prepared by the Massachusetts Institute of Technology has pointed out, that levelised costs do not take account of the costs of intermittency.2 Wind power is not generated on a calm day, nor is solar power at night, so conventional power plants must be kept on standby—but are not included in the levelised cost of renewables. Electricity demand also varies during the day in ways that the supply from wind and solar generation may not match, so even if renewable forms of energy have the same levelised cost as conventional ones, the value of the power they produce may be lower. In short, levelised costs are poor at comparing different forms of power generation.
To get around that problem, Charles Frank of the Brookings Institution2, a think-tank, uses a cost-benefit analysis to rank various forms of energy. The costs include those of building and running power plants, and those associated with particular technologies, such as balancing the electricity system when wind or solar plants go offline or disposing of spent nuclear-fuel rods. The benefits of renewable energy include the value of the fuel that would have been used if coal- or gas-fired plants had produced the same amount of electricity and the amount of carbon-dioxide emissions that they avoid. The above figure summarises these costs and benefits. It makes wind and solar power look far more expensive than they appear on the basis of levelised costs.
The Economist conclusion reached was “If all the costs and benefits are totted up using Mr Frank’s calculation, solar power is by far the most expensive way of reducing carbon emissions. It costs $189,000 to replace 1MW per year of power from coal. Wind is the next most expensive. Hydropower provides a modest net benefit. But the most cost-effective zero-emission technology is nuclear power. The pattern is similar if 1MW of gas-fired capacity is displaced instead of coal. And all this assumes a carbon price of $50 a tonne. Using actual carbon prices (below $10 in Europe) makes solar and wind look even worse. The carbon price would have to rise to $185 a tonne before solar power shows a net benefit.”
Although it is encouraging to read an independent report that tries to balance renewables with other forms of energy generation, society remains skeptical and still harbors unfounded fears about the extreme dangers of nuclear power. I suggest the reader looks at the comments section on the website. I won’t quote some of the more outrageous comments, but the challenge facing nuclear and uranium industries is to do more to alleviate some of the fears and unfounded beliefs in society.
1 – Web link: http://www.economist.com/news/finance-and-economics/21608646-wind-and-solar-power-are-even-more-expensive-commonly-thought-sun-wind-and
2 – “The Net Benefits of Low and No-carbon Electricity Technologies”, by Charles Frank, Brookings Institution, May 2014 and “Comparing the Costs of Intermittent and Dispatchable Electricity-Generating Technologies”, by Paul Joskow, Massachusetts Institute of Technology, September 2011
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