Let's face it: nuclear power is hideously dear and far from ideal(theguardian.com)
theguardian.com
Let's face it: nuclear power is hideously dear and far from ideal
https://www.theguardian.com/business/nils-pratley-on-finance/2019/jul/23/lets-face-it-nuclear-power-is-hideously-dear-and-far-from-ideal
9 comments
>even in a country like Japan
So what you're saying here is that your perception of Japan is that they should be superior to e.g. Russia or other countries managing reactors for some reason?
Just pointing out that you're making decisions about whether or not a technology is safe based on your own (potentially faulty) perception of a foreign country.
You might want to check your cognitive bias here.
So what you're saying here is that your perception of Japan is that they should be superior to e.g. Russia or other countries managing reactors for some reason?
Just pointing out that you're making decisions about whether or not a technology is safe based on your own (potentially faulty) perception of a foreign country.
You might want to check your cognitive bias here.
I live in the UK, but I’m not from here. I have no idea what’s do you mean exactly by cognitive bias (and yes I know what they are). Yes I did expect a Rich first world democratic country like Japan to be probably better at managing nuclear reactors, the same way I expect to make very reliable cars, high end televisions and popular electronic gadgets. Compared to the autocratic Soviet Union, yes I did expect them to be better. They most likely were, but they were still incapable of preventing a meltdown, from what I’ve read mostly due to perception/political reasons (TEPCO didn’t want to frighten people by making massive sea walls or something of the sort).
Are you saying this is a cognitive bias? I think inferring a technologically superior country would be superior at managing technology is a reasonable conclusion. if you really think this is bias, why? Genuinely interested in your answer.
Are you saying this is a cognitive bias? I think inferring a technologically superior country would be superior at managing technology is a reasonable conclusion. if you really think this is bias, why? Genuinely interested in your answer.
Correct - the bias I was referring to was that you seem to believe that a "technologically superior" country would be better at managing nuclear reactors.
However, the truth is that technological superiority of a country has little to do with effective and safe management of reactors, which are technological but in fact decades old in design and operation.
Rather, social and societal attributes like discipline and the ability to not let political concerns affect technical safety decisions seems far more relevant. Witness the US Navy, for example - a large number of reactors used under some of the most difficult conditions possible and no accidents. Canada also has had very few.
I am not saying your assumption isn't the same one a lot of people would make, however.
However, the truth is that technological superiority of a country has little to do with effective and safe management of reactors, which are technological but in fact decades old in design and operation.
Rather, social and societal attributes like discipline and the ability to not let political concerns affect technical safety decisions seems far more relevant. Witness the US Navy, for example - a large number of reactors used under some of the most difficult conditions possible and no accidents. Canada also has had very few.
I am not saying your assumption isn't the same one a lot of people would make, however.
Sure that makes some sense. Discipline and impartiality is more important than technological supremacy, considering the tech is a actually old and impartiality and discipline actually make reactors safer
This is another "nuke" article that doesn't have any application to the present climate change crisis. This is because it almost entirely relates to the failure of the bureaucracy in the UK to find a way to fund and build reactors using old technology and existing regulatory frameworks.
Any future reactors build to sever us from carbon dioxide producing energy technology would probably need to be built using new technology which would both allow and drive the need for a new regulatory framework.
A new framework could be designed alongside new reactors to avoid the pitfalls of older systems regulatory frameworks with the result being both lowered cost and increased safety.
Many of the people arguing against greater use of nuclear power seem to ignore the fact that advocates aren't talking about using the old technology... most agree I think that old style reactors are too expensive for a number of reasons, not the least of which is the amount of regulation created for them by well meaning politicians.
The article's author also seems to assume that renewables like solar and wind power are a viable alternative to large scale constant power generation, when they really are not because of the need for constant baseline power for industry 24/7. Unless a disruptive energy storage technology appears, renewables are too variable in output to maintain a constant supply to e.g. foundries and factories.
Any future reactors build to sever us from carbon dioxide producing energy technology would probably need to be built using new technology which would both allow and drive the need for a new regulatory framework.
A new framework could be designed alongside new reactors to avoid the pitfalls of older systems regulatory frameworks with the result being both lowered cost and increased safety.
Many of the people arguing against greater use of nuclear power seem to ignore the fact that advocates aren't talking about using the old technology... most agree I think that old style reactors are too expensive for a number of reasons, not the least of which is the amount of regulation created for them by well meaning politicians.
The article's author also seems to assume that renewables like solar and wind power are a viable alternative to large scale constant power generation, when they really are not because of the need for constant baseline power for industry 24/7. Unless a disruptive energy storage technology appears, renewables are too variable in output to maintain a constant supply to e.g. foundries and factories.
Just in case you are left scratching your head after you read this Guardian article:
* yesterday (22-July-2019) the UK government published a consultative paper proposing a funding model for a new nuclear power plant [1]
* the public has until 14-Oct-2019 to respond. The UK Government will then take into considerations all responses and will proceed with implementing or not the proposed funding model
* the paper [1] is very well structured (in bullet point format) and worth a read. The financial engineering aspects are complex enough that I sincerely hope Matt Levine will deem this interesting enough one day to translate them for us in his column. Until he does that, I'll do a poor Matt Levine impersonation below and try to give you my understanding
* the climate change aspect: the UK government has committed to zero net carbon emissions by 2050. In this paper they state that, although solar and wind will carry us most of the way there, nuclear is still needed
* The Guardian says "nope"
* we are in a he-says-she-says impasse, but:
* the UK Government has formed a Committee on Climate Change that released a lengthy report [2] on how to achieve net zero emissions; the technical appendix [3] goes over why we actually need nuclear. You can read and decide for yourself, but the CCC does not appear to be biased in favor of nuclear. The appear to push for solar/wind, but acknowledge that the renewable penetration will be economical only up to a fraction that is below 100% (they mention 80% on page 17).
My summary of the funding model:
* there are people with money to invest (mainly pension funds) and people who need money (nuclear power plants)
* investors like good returns, but hate risk
* what they hate most is a bundle of lots of different risks, and how these risks can interplay with one another
* a nuclear power plant is exactly such a beautiful bundle of risks: risk of construction cost overruns, risk that Greenpeace will manage to shut the project down before it's completed, risk that the electricity price will be one tenth the production cost of this particular plant by the time it goes live, risk that some guy steals and money and runs, and obviously the Chernobyl/Fukushima risk
* private investors cannot bear that much risk
* you can add value by disentangling all these risks and making one party bear risk A, another one risk B, and so on
* you can also add value by making some of the risks disappear altogether (it's good to be the king, ah, I mean the government)
So, let's take them one at a time
* risk of construction cost overruns: let's say the current projected cost is $10 BN. They know there will be cost overruns. They look at all similar projects, add a buffer, and deem that it's highly unlikely that the total cost will balloon to more than $25 BN. They then say that in the very unlikely event that the total cost will exceed that limit, the government will step in via a "Government Support Package". What that consists in is not specified yet, but a government guarantee for funding beyond that level is quite likely (a-la the implicit government guarantee that the US Government provides to Fannie Mae, or to the FDIC for that matter)
* risk from the variability of the future electricity prices: this is mitigated via a "Regulated asset base" (RAB) model. What is being regulated here? the price of electricity. Aren't we in a free market? Why can't the price of electricity be simply dictated by the supply/demand? Because you can't really shop around for the best price of the kWh. There is some shopping around going on, but this is behind the scenes. The role of the regulator is to make sure the consumer is not getting screwed, and there is as much competition going on as possible so that the consumer gets a very good price. Matt Levine has some nice blog posts about how the auction works, see [4] for example. Ultimately, the regulator has the power to tell the consumer to pay X for the kWh, even if X exceeds the current production cost. That means the regulator can substantially reduce the risk of future revenues for a power provider, such as the operator of the envisioned nuclear power plant
* Greenpeace risk. Well, Greenpeace, along with everyone else is free to respond to this white paper, by 14-Oct-2019. If the government finds their argument unconvincing, this risk is substantially reduced
* Bernie Maddoff / Enron risk: these risks exists, but they are not specific to the nuclear power generation industry. They are mitigated by various regulations anyway, so they are indeed negligible
* Chernobyl/Fukushima (also known as "the elephant in the room"): this paper is about funding the construction of the power plant, not about the cleanup cost if there is a future blowup/meltdown. One can still ask the question, and the implicit answer is like this: any cleanup cost will be charged to 1. the plant operator and/or the plant constructor (depending who's found to be at fault) 2. their respective insurers, up to a point. If the cleanup costs are not met by 1 and 2, then the operator and/or constructor will declare bankruptcy, in which case, the investors that provided the funding up to the Funding Cap (mentioned above) will lose their money. The UK government will foot the bill in excess of these costs.
[1] https://assets.publishing.service.gov.uk/government/uploads/...
[2] https://www.theccc.org.uk/publication/net-zero-technical-rep...
[3] https://www.theccc.org.uk/publication/net-zero-technical-rep...
[4] https://dealbreaker.com/2013/07/electricity-market-rules-wer...
* yesterday (22-July-2019) the UK government published a consultative paper proposing a funding model for a new nuclear power plant [1]
* the public has until 14-Oct-2019 to respond. The UK Government will then take into considerations all responses and will proceed with implementing or not the proposed funding model
* the paper [1] is very well structured (in bullet point format) and worth a read. The financial engineering aspects are complex enough that I sincerely hope Matt Levine will deem this interesting enough one day to translate them for us in his column. Until he does that, I'll do a poor Matt Levine impersonation below and try to give you my understanding
* the climate change aspect: the UK government has committed to zero net carbon emissions by 2050. In this paper they state that, although solar and wind will carry us most of the way there, nuclear is still needed
* The Guardian says "nope"
* we are in a he-says-she-says impasse, but:
* the UK Government has formed a Committee on Climate Change that released a lengthy report [2] on how to achieve net zero emissions; the technical appendix [3] goes over why we actually need nuclear. You can read and decide for yourself, but the CCC does not appear to be biased in favor of nuclear. The appear to push for solar/wind, but acknowledge that the renewable penetration will be economical only up to a fraction that is below 100% (they mention 80% on page 17).
My summary of the funding model:
* there are people with money to invest (mainly pension funds) and people who need money (nuclear power plants)
* investors like good returns, but hate risk
* what they hate most is a bundle of lots of different risks, and how these risks can interplay with one another
* a nuclear power plant is exactly such a beautiful bundle of risks: risk of construction cost overruns, risk that Greenpeace will manage to shut the project down before it's completed, risk that the electricity price will be one tenth the production cost of this particular plant by the time it goes live, risk that some guy steals and money and runs, and obviously the Chernobyl/Fukushima risk
* private investors cannot bear that much risk
* you can add value by disentangling all these risks and making one party bear risk A, another one risk B, and so on
* you can also add value by making some of the risks disappear altogether (it's good to be the king, ah, I mean the government)
So, let's take them one at a time
* risk of construction cost overruns: let's say the current projected cost is $10 BN. They know there will be cost overruns. They look at all similar projects, add a buffer, and deem that it's highly unlikely that the total cost will balloon to more than $25 BN. They then say that in the very unlikely event that the total cost will exceed that limit, the government will step in via a "Government Support Package". What that consists in is not specified yet, but a government guarantee for funding beyond that level is quite likely (a-la the implicit government guarantee that the US Government provides to Fannie Mae, or to the FDIC for that matter)
* risk from the variability of the future electricity prices: this is mitigated via a "Regulated asset base" (RAB) model. What is being regulated here? the price of electricity. Aren't we in a free market? Why can't the price of electricity be simply dictated by the supply/demand? Because you can't really shop around for the best price of the kWh. There is some shopping around going on, but this is behind the scenes. The role of the regulator is to make sure the consumer is not getting screwed, and there is as much competition going on as possible so that the consumer gets a very good price. Matt Levine has some nice blog posts about how the auction works, see [4] for example. Ultimately, the regulator has the power to tell the consumer to pay X for the kWh, even if X exceeds the current production cost. That means the regulator can substantially reduce the risk of future revenues for a power provider, such as the operator of the envisioned nuclear power plant
* Greenpeace risk. Well, Greenpeace, along with everyone else is free to respond to this white paper, by 14-Oct-2019. If the government finds their argument unconvincing, this risk is substantially reduced
* Bernie Maddoff / Enron risk: these risks exists, but they are not specific to the nuclear power generation industry. They are mitigated by various regulations anyway, so they are indeed negligible
* Chernobyl/Fukushima (also known as "the elephant in the room"): this paper is about funding the construction of the power plant, not about the cleanup cost if there is a future blowup/meltdown. One can still ask the question, and the implicit answer is like this: any cleanup cost will be charged to 1. the plant operator and/or the plant constructor (depending who's found to be at fault) 2. their respective insurers, up to a point. If the cleanup costs are not met by 1 and 2, then the operator and/or constructor will declare bankruptcy, in which case, the investors that provided the funding up to the Funding Cap (mentioned above) will lose their money. The UK government will foot the bill in excess of these costs.
[1] https://assets.publishing.service.gov.uk/government/uploads/...
[2] https://www.theccc.org.uk/publication/net-zero-technical-rep...
[3] https://www.theccc.org.uk/publication/net-zero-technical-rep...
[4] https://dealbreaker.com/2013/07/electricity-market-rules-wer...
For any other American English readers like myself who don't know or only vaguely recall the usage, "dear" is a Britishism meaning "expensive."
Oh dear ;-)
The problem is not that we don’t have the technology to do it safely - we probably do. The soviets probably could have built safe reactors too. In fact after Chernobyl there was no more incidents with the RBMK design.
The problem is the companies and governments behind the building of nuclear have political and social considerations that have led to two major nuclear accidents that have led to two major exclusion zones within a generation of each other. Yes we’ve done ok so far, but it frightens me that even in a country like Japan political considerations by TEPCO led to another disaster. It’s not that we don’t have the technology - it’s that we might not have the right people to implement it the right way all the time, and that might be enough.