Thread by @jmkorhonen

Some further observations, calculations, and sources that led me to my conclusion:

#nuclear power stalled in the 1980s due to cheap fossil fuels and cost overruns caused mainly by the industry itself, not by nefarious environmentalists.

And: how to save nuclear power?

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https://twitter.com/jmkorhonen/status/1625095305694789632

As a preface, I've campaigned for nuclear power since 2010. I've co-written two pretty popular books arguing the case for nuclear energy and even demonstrated in Paris.

Here's a thorium aria Eric G. Meyer originally performed in Paris metro: 2/

Let's first take a look at how we can know the environmentalists weren't the key cause, as many claim but few have bothered to study in detail?

To figure out the truth from the allegations, we need some numbers. 3/

The most common claim against environmentalists is that they demanded more stringent regulation, and this "regulatory ratcheting" of constantly increasing demands doomed the nuclear industry to spiraling costs. 4/

Disentangling the effects of regulatory changes from other problems is hard. The nuclear industry has been able to cock up projects entirely without regulatory interference.

As a reminder, the Olkiluoto 3 in Finland is soon 14 years late and at least 265 % over budget. 5/

As far as I'm aware, regulatory changes during Olkiluoto 3 construction did not meaningfully impact the project. Nevertheless, delays and cost increases rival or exceed those seen during the early days of nuclear power, when the regulatory ratcheting supposedly killed nuclear. 6/

Even after Three Mile Island, nuclear projects were completed on average in 12 years. Olkiluoto 3 has been under construction for 20, even though Finnish nuclear regulations haven't changed much as far as I know. (Fukushima brought some changes, but mostly for older plants.) 7/

Flamanville in France suffers from similar problems with the same EPR reactor. There the regulatory changes have had some effect (OECD-NEA 2020:63).

But let's calculate. How much could regulatory ratchet have influenced nuclear power costs in the 70s and 80s? 8/

Remember that regulatory changes were not made just to spite the nuclear industry. Early designs had real problems that needed addressing. And not all cost increases were caused by regulatory changes.

Let's assume a worst case scenario: 50% of all cost increase was malicious. 9/

Here are the results from an LCOE calculation as per IEA methodology. I had to estimate the fuel and O&M costs, but they do not differ between the cases. The only difference in inputs is the overnight costs from the table above.

What does this chart tell us? 10/

Here's the estimated cost of producing an MWh of electricity as a function of the discount rate.

The solid black line w/numbers shows the actual costs of projects started in 1976-77.

They were impacted by all the regulatory ratcheting, including post-Three Mile Island. 11/

The green line w/numbers show the 1976-77 costs minus 50 % of the difference between the 1976-77 actual costs and the most optimistic 1966-67 projections.

That is, how cheap nuclear could've been if the worst-case scenario - 50% of all cost increases are malicious - is true. 12/

What we can see is that EVEN IF half of all cost increases were due to malicious, unnecessary regulations (they were not), and EVEN IF they had been avoided, the increase in discount rates would STILL have caused big problems for nuclear power's competitiveness. 13/

In addition, simplistic theories of evil regulators working in cahoots with Luddite environmentalists to kill nuclear power are hard to square with reality.

The broad strokes were similar in most countries, but let's look at the U.S. for example. 14/

In the early 1970s, US utilities were tanking on debt to finance ambitious investment programs, motivated by nearly 7% per annum increases in electricity consumption and brownouts in the late 1960s. (Key sources in the following are Nichols 1987 and Hultman & Koomey 2013.) 15/

In 1973, the total US electricity generation capacity was reported at 417 GW. Staggering _419 GW_ were planned or under construction. At the time, about 25% of new capacity was nuclear, the rest fossil. By 1979, nuclear was expected to be 2/3rds of new installations. 16/

Then came the oil crisis, stagflation, and recession. Demand growth turned into an unexpected decrease in demand, and interest rates hiked just as the first wave of nuclear builds was running into significant delays and cost overruns. This was BAD for utilities. 17/

A simplistic theory would say that the oil crisis was a golden opportunity for nuclear. It was - but the stagflation and recession hurt capital-intensive and risky nuclear projects more than the oil crisis helped.

Utilities axed projects and delayed many others. 18/

Struggling to raise capital and faced with unexpected electricity generation overcapacity (up to 35% at one point), utilities had to delay ongoing construction projects despite knowing that would balloon the costs of nuclear projects in particular. 19/

The utilities' attempts to pass the cost overruns to ratepayers angered the public and the regulators even before the anti-nuclear movement really gained steam. In fact, the apparent imprudence of utilities was a significant factor in turning people away from nuclear. 20/

The 1978 PURPA act that began the deregulation of the electricity markets was partly a response to this anger. Once the quasi-monopolies had competition, passing the risks to ratepayers became difficult.

Risky projects were shelved in favor of less risky ones. 21/

Other countries, same story. As electricity markets were deregulated and discount rates increased while demand growth stagnated, new nuclear disappeared. Cheap gas and coal was built instead.

IEA/OECD 1998 discussed the problem at length, as deregulation peaked in the 1990s. 22/

Monopolistic utilities had captive markets and could get cheap financing. They generally used 3-5% discount rates in their planning.

After deregulation, discount rates jumped to 10-12% or much higher (IEA/OECD 1998). You can see the impact from graphs above, or here: 23/

1980s politicians, in effect, had to choose between nuclear or free markets. Some countries like France chose nuclear. Some, like very pro-nuclear, anti-environmentalist Margaret Thatcher and the UK, chose free markets.

She wanted 10 nuclear plants, but only one was built. 24/

The same story was repeated in other countries, and I believe is going to be repeated again. Nuclear power is currently favored by the same people who prefer "free markets", low taxes, and no state intervention anywhere.

That is an impossible combination, today as well. 25/

If we want to save nuclear power, then we must look squarely at the facts.

Fact: the history of all environmental and other regulation shows that businesses that are very profitable AND very important to the overall economy are exceedingly hard to regulate out of existence. 26/

Fact: if nuclear power had been very clearly a better investment than cheap gas and coal, then the anti-nuclear movement would've been, at most, a nuisance.

But even in optimistic cases, the cost advantages were small. Most often, costs favored fossils. (IEA/OECD 1998) 27/

Fact: the repeat of e.g. France's performance is certainly possible today - even if even French nuclear program isn't quite the shining beacon of success some claim it is, as some costs had been hidden for decades.

But expecting that to happen without state support is nuts. 28/

To make nuclear competitive, discount rates have to go down and fossil prices have to go up.

Discount rates can be hammered down with taxpayer support. And it's going to cost serious money. 29/

The only real decision is if nuclear supporters should advocate for subsidies to private firms, or for state-owned enterprises, or for some hybrid solution (e.g. joint public-private partnerships, or state enterprise building reactors it leases to private operators, etc.). 30/

I would favor state enterprises or public-private partnerships, as subsidies effectively put the risk on taxpayers but let private firms harvest the winnings, if any.

On the other hand, time may make the question moot. The cost of RE based systems is dropping rapidly. 31/

If the nuclear renaissance doesn't happen by the early 2030s, I doubt it will ever happen.

In that case, nuclear might remain in niche uses and supporting roles and could be valuable there.

But it's just a technology, like a fork. Don't make it a religion. 32/32

PS. Sources cited:

Hultman, N., & Koomey, J. (2013). Three Mile Island: The driver of US nuclear power’s decline? Bulletin of the Atomic Scientists, 69(3), 63–70. doi.org/10.1177/009634…

IEA/OECD. (1998). Projected Costs of Generating Electricity: 1998 Update. OECD and IEA. oecd-nea.org/upload/docs/ap…

Nichols, E. (1987). U. S. Nuclear Power And The Success Of The American Anti-Nuclear Movement. Berkeley Journal of Sociology, 32, 167–192.

OECD NEA. (2020). Unlocking Reductions in the Construction Costs of Nuclear: A Practical Guide for Stakeholders. OECD. doi.org/10.1787/33ba86…

SPD. (1977). Energie: Ein Leitfaden zur Diskussion. SPD.