The Return on Investment
The problem with investing in nuclear energy is that it takes 10 years to see returns. But the returns are excellent and reliable after that. Why not encourage a new kind of bond or investment fund that is risk free and returns a competitive rate based on probable (nearly guaranteed) returns.
Robert Hargraves compares costs and sets target for costs of nuclear
Who should pay?
Wall Street has the much needed capital and investors expect to see a return on it. Government investment in new nuclear is cutting back on spending. So in order to maximize our chances we need to get reactors built at competitive prices or use alternative financing models.
This quote from Bernard Cohen's 1990 book "The Nuclear Energy Option" is still very relevant
- "No nuclear power plants in the United States ordered since 1974 will be completed, and many dozens of partially constructed plants have been abandoned. What cut off the growth of nuclear power so suddenly and so completely? The direct cause is not fear of reactor accidents, or of radioactive materials released into the environment, or of radioactive waste. It is rather that costs have escalated wildly, making nuclear plants too expensive to build. State commissions that regulate them require that utilities provide electric power to their customers at the lowest possible price. In the early 1970s this goal was achieved through the use of nuclear power plants. However, at the cost of recently completed plants, analyses indicate that it is cheaper to generate electricity by burning coal. Here we will attempt to understand how this switch occurred. It will serve as background for the next chapter, which presents the solution to these problems.
Several large nuclear power plants were completed in the early 1970s at a typical cost of $170 million, whereas plants of the same size completed in 1983 cost an average of $1.7 billion, a 10-fold increase. Some plants completed in the late 1980s have cost as much as $5 billion, 30 times what they cost 15 years earlier. Inflation, of course, has played a role, but the consumer price index increased only by a factor of 2.2 between 1973 and 1983, and by just 18% from 1983 to 1988. "
Hyper-regulation!!! - the main cause of nuclear build costs
How competetive would nuclear be if regulation were set on an even playing field. That is what if the same scrutiny were imposed on all other energy types. Coal would have stopped decades ago.
Questions we need to answer
- How can we improve the current system of licensing which takes years to get a new site approved for construction?
- NRC is currently unwilling to consider new designs that have no commercial interest
- NRC reforms could improve incentives for licensing new reactor technologies such as SMRs, thorium reactors, and fast reactors?
- How is nuclear energy good for the environment
- What can be done to remove the financial risk premium to nuclear builds?
- What can be done to bring more nuclear builds in on time and under-budget?
- How do we push harder on the cost barriers to nuclear?