This is because it is cheaper to produce power from natural gas than
nuclear even with a carbon tax, according to a recent study – although
it points out that, in the long term, the price of gas may change.
The magazine describes how some nuclear plants have managed to reduce running
costs, and therefore the price of electricity, by refuelling more often and
increasing efficiency. However, as a result of the Fukushima
power plant accident
that followed the March 2011 earthquake in Japan, there is limited scope for
cutting costs because of safety and regulatory concerns.
Other ways of cutting costs include
integrating nuclear stations with other power plants, and so sharing IT
and management functions.
However, David Hess, director of capacity
optimisation at the World Nuclear Association, says that while there is
always scope for some improvements, “the fact is that US plants are very
In some US markets, which are highly
regulated, nuclear power is protected, and the extra cost of producing
electricity is passed on to consumers in their bills. In other states,
where there are unregulated markets and where generators compete merely
on price, “operators may be massively exposed”, the magazine says.
The US has the largest number of nuclear
reactors of any country in the world, with 104 operating in the 65
commercial nuclear power plants in 31 states. They produce around 20% of
American electricity, so the future role of nuclear will make a
significant difference to US greenhouse gas emissions.
Recently, US emissions have gone down
because many electricity producers have switched from coal power plants
to cheaper gas. Using gas reduces by about a third the amount of carbon
dioxide produced for the same amount of electric power.
However, turning off nuclear stations
because they are no longer economic would have the opposite effect, and
would cause a massive and politically embarrassing rise in US emissions.
Some nuclear plants will certainly be unable to compete if gas prices
continue to fall.
Steven Mueller, president and chief
executive officer of Southwestern Energy, predicting that gas prices
would continue to go down, said the cost of a well to produce gas by
fracking has dropped by 14% in the last five years.
Speaking to the Oil & Gas Journal, Mueller
said industry was still in the early stages of learning the best and
cheapest way to exploit this resource. With unconventional gas the US
“has a national treasure with long-term, low-price implications.” He did
not believe that gas would be a short-term energy resource to be
replaced by renewables.
The boom in American gas supplies is
changing the world’s energy markets. Cheap coal no longer needed for
America’s own electricity production is now exported to European power
stations, and tanker supplies of Middle East gas once destined for the
US have been diverted to Europe.
Whatever happens, the long hoped-for
nuclear revival in the US now looks a remote possibility. If old nuclear
power stations whose capital cost has long been written off cannot
compete with gas, then new nuclear build has no chance.
The last hopes for new nuclear stations
still seem to be countries in other parts of the world with high energy
prices and a reliance on imported fuel. Most of Europe has plumped for
renewables as a better long-term bet, but the UK is still hoping to do a
deal with French, Chinese and Japanese companies to build new nuclear
Government has been in negotiation for more than a year with the French giant EDF to
build two reactors, costing £14 billion, at Hinkley Point in Somerset. EDF,
owned by the French Government, is demanding guaranteed electricity price
subsidies for 35 years in order to take the risk on new build.
The price EDF is demanding would be double
the existing price of electricity in the UK, and might not go down well
with consumers who will have to foot the bill. Another stumbling block
is that the subsidies will breach EU rules on competition and will be
resisted by environment groups, and possibly by countries such as
Germany that are phasing out nuclear in favour of renewables. An
announcement on a deal is expected within days.
Climate News Network]