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Nuclear is not competitive with coal, natural gas

BLOOMINGTON, IND. — Policy analysts typically evaluate proposed new policies against the status quo. From this perspective, the question of whether Congress should encourage the development of nuclear power is moot, because support for nuclear power is a central element of the status quo.

Over the last 20 years the federal government has taken numerous steps to encourage nuclear power.

The Nuclear Regulatory Commission streamlined the process for developing nuclear power plants; approving standardized reactor designs, allowing utilities to obtain pre-approval for reactor locations that may be banked for future use, and creating combined construction and operating licenses.

Congress and the Department of Energy have also created a host of subsidies for nuclear power. Under the Nuclear Power 2010 plan, DOE shares the cost of site planning and pays half of the licensing costs for new nuclear power plants.

For its part, Congress created a $20 billion loan guarantee program for constructing new nuclear power plants; a $2 billion subsidy for developing uranium enrichment facilities in the United States; $2 billion in risk insurance for nuclear power plants facing delays due to regulations or public opposition; a $1.3 billion subsidy for decommissioning older nuclear power plants; $1.2 billion in reactor research; a $0.018 per kilowatt hour subsidy for electricity produced by new nuclear power plants; and liability protections worth billions of dollars.

These subsidies are essential, since every credible analysis concludes that nuclear power is not cost-competitive compared with electricity from coal, natural gas, and in many cases, wind.

Policy analysts also recognize that policies have consequences beyond their intended targets, and additional support for nuclear power will have effects beyond the nuclear power industry.

If Congress chooses to develop nuclear power in the United States, it will need to realize they are implicitly choosing a much different future for our country.

First, greater reliance upon nuclear power will mean higher prices for electricity. Predicted prices for atomic energy are 25 to 60 percent higher than electricity from coal and 20 to 25 percent higher than electricity from natural gas. While electricity costs will rise under any plausible scenario for reducing greenhouse gasses, citizens should not expect nuclear power to delay or prevent these price increases.

Second, because we import 90 percent of our uranium, increased use of nuclear power will mean greater reliance upon foreign nations for our energy resources.

Third, the security risks posed by nuclear power are unique among potential sources of electricity. Products from the nuclear fuel cycle and nuclear wastes are attractive targets for terrorists. Therefore, greater reliance upon nuclear power will require a larger and more expensive domestic national security apparatus.

Finally, rapid expansion of atomic energy capacity will almost certainly require redistributing political authority to the central government in Washington, DC. Recent Gallup polls show 63 percent of Americans oppose locating nuclear power plants in their areas.

Historically, such opposition has been expressed through local and state governments and delayed the construction of nuclear power plants. The surest way to prevent these delays is for the federal government to limit public participation and preempt state and local authority over utility-siting decisions. These actions have already been proposed by federal officials and utility executives.

On the one hand, nuclear power offers Americans the potential for large amounts of reliable, reasonably priced, low-carbon electricity. The federal government has taken steps to encourage nuclear power, and the debate over whether to take additional steps needs to weight these benefits heavily.

On the other hand, the nuclear option also entails large government subsidies; higher prices for electricity; greater reliance upon imported fuel; a larger, more expensive, and more intrusive national security apparatus; and the transfer of policy making authority from state and local governments to the national government.