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Rapid Response: Study Gets It Wrong About Nuclear Energy's Role in a Low-Carbon Portfolio, Nov. 17, 2009

The new study, “Generating Failure,” (Nov. 17) by the Environment America Research & Policy Center, misrepresents the cost of nuclear energy and unnecessarily dismisses its essential and proven role as part of America’s low-carbon energy portfolio.

Below, we examine some statements from the study.
 


 

Myth #1: “Nuclear power is expensive and will divert resources from more cost-effective energy strategies.”
The Facts: New nuclear energy facilities will produce electricity at competitive prices, based on studies by the EIA, independent academic institutions and energy companies contemplating building nuclear power plants.
 


 

Nuclear energy is expected to be among the most economic sources of electricity. An independent comparative study published in January 2008 by the Brattle Group for the state of Connecticut estimated that nuclear energy (at $4,038/kilowatt) may have the highest capital cost, but still produces the least expensive electricity, except for combined cycle natural gas with no carbon controls.

The study from Environment America bases some of its key graphs and text on the study, “Comparative Costs of California Central Station Electricity Generation” from the California Energy Commission. This study produced a levelized cost of electricity from nuclear energy four times greater than the high case from MIT’s Center for Energy and Environmental Policy Research's 2009 “Update on the Cost of Nuclear Power.”

In contrast, various recently-released academic studies provide a frank discussion of nuclear energy’s economics and all conclude that nuclear energy is one of the most important tools to address climate change based on lifetime cost, reliable performance and carbon-free generation. Some of these studies include:

  • The Energy Information Administration, “Annual Energy Outlook,” updated April 2009.
  • The Brattle Group, “Integrated Resource Plan for Connecticut,” January 2008.

For a detailed look at nuclear energy financing issues, see NEI’s Financial Center.
 



Myth #2: “Nuclear power is not needed to provide reliable, low-carbon electricity for the future.”

The Facts: All mainstream analyses of climate change issued by independent organizations show that reducing carbon emissions will require a portfolio of technologies and that nuclear energy must be part of that portfolio.
 



Analyses of H.R. 2454, the American Clean Energy and Security Act, by the Environmental Protection Agency (EPA) and the Energy Information Administration (EIA) demonstrate that substantial increases in nuclear generating capacity will be essential to meet the legislation’s carbon-reduction goals.

In the EPA analysis, nuclear energy increases by 150 percent, from 782 billion kilowatt-hours in 2005 to over 2 trillion in 2050. If all existing nuclear power plants retire after 60 years of operation, 187 new nuclear plants must be built by 2050.

In the “basic” scenario of EIA’s analysis, the U.S. would need to build 96 gigawatts of new nuclear energy generation by 2030 (69 new nuclear plants). This would result in nuclear energy’s supplying 33 percent of U.S. electricity generation, more than any other source of electric power.

To the extent the United States cannot build new nuclear power plants in these numbers, the cost of electricity, natural gas and carbon allowances will be higher. For example, another independent study, Electric Power Research Institute’s 2009 PRISM analysis, found that including nuclear energy in the low-carbon portfolio would actually reduce costs:

“The analysis confirms that while the cost of implementing major CO2 emissions reductions is significant, development and deployment of a full portfolio of technologies will reduce the cost to the U.S. economy by more than $1 trillion. Less than half of these savings would be achievable if the future electricity sector generation portfolio does not include advanced coal with CO2 capture and storage or advanced light water nuclear reactors.”

For more on nuclear energy’s role in a low-carbon portfolio see: http://www.nei.org/publicpolicy/nuclearenergyandclimatechange/.