I have a new article with a closer look at Feed in Tariff support of renewable energy
Geoffrey S. Rothwell of the Stanford Institute for Economic Policy Research examined the nuclear insurance issue
In economics, a subsidy is a "payment made by the government (or possibly by private individuals) which forms a wedge between the price consumers pay and the costs incurred by producers, such that price is less than marginal cost" (The MIT Dictionary of Modern Economics, 4th Edition, 1992). Here, the "consumers" (of insurance/indemnification) are firms in the nuclear power industry and the "producer" (of insurance/indemnification) is the federal government. However, there is no subsidy payment unless there is an accident and damages are above the PAA liability limit. Because there is no payment, there is no "direct subsidy," although there is a
potential (or expected) subsidy.
Opponents of the PAA have used these estimates to argue for the ending of the "PAA subsidy" to the nuclear power industry. Without questioning the probability distribution assumption, they have followed the advice in Heyes and Heyes (2000, p. 99): "The implications for how anti-nuclear lobbyists should go about persuading regulators and governments that the extent of the subsidy which current law confers is unacceptably high are that it is likely to be more fruitful to ‘argue up’ consequences rather than probabilities." This has been done by claiming that the costs of a Chernobyl-like accident in the US would be more than $300 billion, without any discussion of the probability of such an accident in the US. See, for example, www.citizen.org/cmep. By focusing on one assumption (consequences) without considering other assumptions (probabilities), the anti-nuclear argument is incomplete.
In regards to government support and subsidies for different energy sources
A 2002 Cato Institute report showed that in the previous 20 years renewable technologies received $24.2 billion in US federal R&D expenditure, compared with $20.1 billion for nuclear and $15.5 for coal (adjusted 1996 dollars). The result of this was minimal electricity contribution from non hydro renewables, and 20% and 50% respectively contribution from nuclear and coal.
A 2006 study from Management Information Services on The US Energy Subsidy Scorecard showed that total federal incentives (of which R&D expenditure is only a part) from 1950 to 2003 totalled $63 billion for nuclear power, $111 billion for renewables, $81 billion for coal and $87 billion for natural gas (2003 dollars), lining this up against the resultant contribution to US energy.
Government support versus actual delivered electricity
R&D versus electricity generation
Focusing on R&D alone over 1994-2003, the study showed coal got $3.9 billion and nuclear $1.6 billion - both commensurate with their contribution to US electricity, while renewables other than hydro received $3.7 billion - vastly more than their foreseeable contribution.
Germany applies a mixture of incentives for renewables, such as a feed-in tariffs. The average feed-in tariff apart from solar PV is 8.5 c/kWh, or 16.4 cents including solar PV in 2006 (solar PV being 49 cents). The combined subsidy from consumers and government totals some EUR 5 billion per year - for 6% of its electricity.
Germany also provides producer subsidies to its coal industry amounting to EUR 68 per tonne for 34 Mt coal in 2000 - total EUR 2.3 billion.
EU energy subsidy analysis from 2004
External energy costs totals for energy. In the notes a discussion of the hypothetical severe nuclear accident. Chernobyl cost $370 billion. Equal to 10-20 years of excess coal or oil costs for the EU15 only. 2-6 years for world (US, China, India etc...) excess coal or oil costs.
Paul Scherrer Institut (swiss) for the study of energy costs with impacts and externalities included
333 final report on energy external costs
External energy costs added to costs of energy. High estimate on top and low estimate below. Nuclear price looks good.
Top ten energy related events for evacuees and costs
Chernobyl is put at US (2000) $370 billion. $6 billion for three mile island. when compared to the annual higher external costs for coal and oil. Then 10-20 years of EU only external costs balances out one Chernobyl. The coal and oil damage for the US and china and other non-EU countries would balance out the one time Chernobyl Chernobyl 3-5 times faster. Chernobyl happened once in 50 years with a particularly dangerous reactor.
The risk assessment for the modern reactors that we would be building should be considered This is important - no one is suggesting that we make more Chernobyl style reactors. Even all of the old Chernobyl style reactors now have containment domes. This would limit almost all of the worst case scenarios to Three Mile Island level accidents.
The AP1000 has a maximum core damage frequency of 5.09 x 10-7 per plant per year. The Evolutionary Power Reactor (EPR) has a maximum core damage frequency of 4 x 10-7 per plant per year. General Electric has recalculated maximum core damage frequencies per year per plant for its nuclear power plant designs:
BWR/4 -- 1 x 10-5
BWR/6 -- 1 x 10-6
ABWR -- 2 x 10-7
ESBWR -- 3 x 10-8
This means you would multiply the 1 in 100,000 to 3 in 100 million chances against the potential costs. All insurance risks and costs are calculated in this way. (Frequency times cost)
In the footnotes of one of the references there is a high range estimate of 5.5 trillion euro for a worst case damage event. How could a 5.5 trillion damage event happen ? I do not believe it is possible. Even blowing up like a nuclear bomb (which is impossible since the uranium is not pure enough) reactors are not close enough to population centers with the blast radius.
The world only has $140 trillion in financial assets.
Even estimates for the nuclear bombing of New York do not have direct economic damage at that 5.5 trillion level.
A worst case analysis for a terrorist attack on Indian point reactor. Has damage of 1.1 trillion to 2.1 trillion, where everything goes exactly to maximum damages. (700 to 1.5 trillion euro). All reactors are not near important financial centers, so the value of the surrounding areas would be less for all other reactors. However, the analysis has been that nuclear reactors would not release radiation if hit by a plane. So even that worst case scenario would not happen or it would involve several dozen people planting massive explosives or firing missiles to breach the containment dome while at the same time causing the reactor to meltdown before they could be stopped.
I believe the core damage event not breaching containment would cost $6 billion max (loss of reactor,that level of damage is covered under the insurance) and for the current reactors and processes 1 in 100,000. So once every 200 years for a slightly larger than current reactor fleet.
5 billion euro / 200 years = 25 million euro/year (covered under paid insurance)
1 in a million for some kind of containment breaching event
500 billion euro / 2000 years = 250 million euro/year
A discussion by Heyes in 2003 about his 1998 estimate of nuclear insurance.
Heyes and Liston-Heyes noted an error in the way in which Dubin and Rothwell interpreted current insurance arrangements, and reapplied their methodology corrected for the reinterpretation. Heyes and Liston-Heyes’ correction reduced the estimates
of the subsidy substantially to $2.3 million/reactor/year.
I [ANTHONY HEYES] will let you in on a little secret: The two estimates and the methods used to generate them are, at best, unreliable and, at worst, deeply flawed. I can say that because I am one of the authors. I know squat about nuclear power. Do not get me wrong, the two papers are competent pieces of academic research and they deserved to be published in the reputable peer-reviewed academic journals in which they appeared. But the approach that they utilized is very much an experimental one, and one whose results can be highly sensitive to changes in underlying assumptions.
New reactors are 20 times safer. So one event in 4000 years for the same number of reactors.
Immediate fatalities counts by energy source. Latents for Chernobyl not counted [Latent estimate for Chernobyl 200-4000 total] and latents for fossil fuel air pollution not counted (4.5-6 million/year, World Health Organization statistics). Latents for oilwars not counted. Some of China's immediate coal deaths not counted.
Some anti-nuclear people talk about the importance of the speed of release of radiation. I say that speed of release of pollutants by itself is meaningless. It is what happens damage and death wise with the release. If speed effects the damage and death then it matters, but speed by itself is meaningless. Plus all pollutants need to be considered not just radiation.
The Ivy Mike nuclear bomb test of 1951 released 100 times the radiation of Chernobyl and it was released faster, but no one died from Ivy Mike.
I consider the 1.2 million global deaths from cars an outrage. More should be done to reduce those fatalities. Systematical adjustments like getting off of coal is a factor here. 6 billion tons of coal is moved (rail and trucks). Getting off of coal would reduce traffic accidents by about 3-10% and freight rail by (20-40%).
Social risk: A lot of wind power could have environmental effects. Drying out of peat bogs. Enough wind could effect weather. [Note: I am not against wind power, but people should not pretend that solar and wind are pristine and without some issues. They are very good, just like nuclear is very good. We need to not get lost in debating details of solar, wind and nuclear and then forget of the orders of magnitude difference for coal and oil.]There is the clear deaths from coal and oil as I have described, for some reason this is socially acceptable.
Uranium from seawater is often ridiculed, but it should not be. They dip the polymer adsorpant netting into the ocean and let the ocean currents flow by. They then pull out the netting and extract the uranium. It is like fishing with nets. You would not pump the water because the water is already moving.
If 2g-U/kg-adsorbent is submerged for 60 days at a time and used 6 times, the uranium cost is calculated to be 88,000 yen/kg-U, including the cost of adsorbent production, uranium collection, and uranium purification. When 6g-U/kg-adsorbent and 20 repetitions or more becomes possible, the uranium cost reduces to 15,000 yen. This price level is equivalent to that of the highest cost of the minable uranium. The lowest cost attainable now (2006) is 25,000 yen with 4g-U/kg-adsorbent used in the sea area of Okinawa, with 18 repetition uses. This is about $220 per kg (114 yen to 1 US Dollar in 2007) The price of Uranium is currently in the $80-120/kg range.
Note: that is the one thing is that we will only have to go to uranium from seawater in any big way in 50-500 years. The timing depends upon how quickly we make nuclear reactors that 50-100 times more fuel efficient and how well we develop more economic sources of Uranium.
It does take 1000 three MW wind turbines to equal one single 1 GW nuclear reactor. It takes ten times the steel and concrete to make those wind turbines. Plus the wind turbines and blades need to be built in massive factories. The wind turbines are 30-40 stories tall and the blades are larger than the wings of a jumbo jet.
More papers examining energy subsidies