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From the article: "No nuclear energy program has ever launched without heavy state intervention — the capital costs are just too high for private entities to ta

From the article: "No nuclear energy program has ever launched without heavy state intervention — the capital costs are just too high for private entities to take on." I think this misses the real reason. High capital costs are no barrier to private financing as long as the eventual profits will accrue to the investors. But in this highly-regulated industry, investors can't put money into nuclear plants thinking that in 20 years there will be a high demand, and they'll be able to charge a high price for power. Once the time comes, the regulators will likely decide that they can charge only a "fair" price. And that's assuming that they actually get to build and operate the plant - there's a substantial chance that political winds will change, and the plant ends up being banned or regulated to the extent that it's effectively banned. Government financing is the only solution to this problem, which is created by the existence of government. We see the same thing in Canada now with pipeline construction - only government can finance them due to the government being capable of destroying any private company that tries to build them.

pydry 6y ago
In the UK Hinkley point C got a strike price of £92.50 per megawatt hour guaranteed for (i think) 35 years. By contrast wind got about £39-£41 for two years. Future years will likely be even lower.
- svrb 6y ago
  A "guarantee" from the state is worth a lot less than face value as it can simply legislate away that guarantee.
  - Retric 6y ago
    Stable governments don’t do this because it calls into question all the other agreements they have made.
    - tupputuppu 6y ago
      Yet even the most stable western democracies do it often enough to make investors consider nuclear power plans too risky - not because of the technology but because of political risk. For instance here in Finland companies that invested in nuclear made good profit, because of not having to pay costs related to carbon offsets. Politicians saw the profits, considered them "windfall" and taxed them away. So why would you ever invest in carbon-free nuclear power on those terms? Simultaneously there's a lot of jobs in coal, which ensure politicians keep subsidising it. From an investor perspective it's a sure deal.
      - smnrchrds 6y ago
        > For instance here in Finland companies that invested in nuclear made good profit, because of not having to pay costs related to carbon offsets. Politicians saw the profits, considered them "windfall" and taxed them away. Can you please expand on this a bit? Did they the change the law to tax something that was previously un-taxed? Did they tax it at an effective 100% rate so all the benefit would go to the state and none to the investors, or did the investors benefit too?
        HappyDreamer 6y ago
        Yes I wonder that me too, and also, what does "considered them windfall" mean? Not a native speaker, sorry It means the politicians looked at the profits they could get from the taxes, as apples and fruit that had fallen from the trees (because of a wind), and they could pick it up with no effort?
    - iso1210 6y ago
      Yet the UK government has admitted in parliament it intends to break an international treaty signed just a few months ago
    - HappyDreamer 6y ago
      > Stable governments Are there any stable governments, when the one with the most money can buy Twitter and FB ads, or a foreign country can setup a troll army of internet manipulators, and get to choose the president? How long is the, say, 2 x return-of-money-invested, for a nuclear plant, compared to how often elections happen
  - jeremyjh 6y ago
    They can try but companies sue the government and win all the time. If it weren't possible for governments to enter into enforceable contracts they'd have a difficult time getting anything done.
- 0xy 6y ago
  Ignores the price of inconsistent delivery and the inevitable huge costs of batteries and/or gas peaking plants to supplement the inconsistent power from wind. Nobody ever factors in these costs to the price of solar or wind, and I find it extremely disingenuous. Nuclear can still be pumping power on a windless sunless day with 100% green energy. Solar and wind? Either use batteries (expensive, not really renewable) or gas peaking plants (nearly worse than coal, not renewable, expensive).
  - 7952 6y ago
    Well actually a lot of people think about this kind of thing all the time. There is an entire market and industry dedicated to power grids. Sure, that price is not a complete picture. But does any price completely encapsulate externalities? But that low price is extremely positive.
  - pydry 6y ago
    >Nobody ever factors in these costs to the price of solar or wind, and I find it extremely disingenuous. Speaking of extremely disingenuous, I already shared a study on exactly that in this thread 4 hours before you wrote your comment. Here it is again: https://neon.energy/Hirth-Ueckerdt-Edenhofer-2015-Integration-Costs-Revisited-Framework-Wind-Solar-Variability.pdf https://neon.energy/Hirth-Ueckerdt-Edenhofer-2015-Integratio... Sincerely, Nobody
bilbo0s 6y ago
We only have one real data point as far as actual newly constructed plants in the US go, but that data point agitates against your position. At Vogtie, the government made a rule that effectively forbids consumers in the Vogtie service region from using anything but Vogtie. So no switching to using some wind farm that someone might slap up down the road from you. Material point is that regulations generally favor these sorts of plants where consumers are concerned because the government needs the plant. (Or, at minimum, has decided they want the plant.) Not that any of it matters. Obviously, Vogtie still is a financial mess. I suppose it's probably beyond "mess". Once something's more than 200% or 20 billion over budget it's OK to go ahead and call it a financial disaster. I'm only pointing out that regulations work both ways, and when the government is trying to get a power plant built the regulations will generally work in favor of the generating entity. The essential issue is that nuclear plants cost money even if there are no regulations at all. The required metallurgy, for instance, just costs a baseline amount of money, and there's no way to cut it down. I doubt anyone could get a nuclear plant built for less than $1 Billion even in the absence of regulations. And that's for the designs we know and understand. There will definitely be cost overruns for the newer designs that we haven't worked with in production. Investors have to be able to recoup that outlay within a reasonable time frame. So the government is actually doing the right thing by "guaranteeing" customers so to speak. In an environment free of the ability to regulate, I doubt any nuclear plants get built.
alkonaut 6y ago
> I think this misses the real reason. High capital costs are no barrier to private financing as long as the eventual profits will accrue to the investors. What about the risk premiums for disasters. Isn't it only economical if states accept the cost? If we wouldn't accept an owner of a nuclear power plant to go bankrupt before cleaning up ,after a Fukushima scale accident they'd be forced to either have an insurance that made it uneconomical, or deposit many times more than the reactor costs up front, for cleanup. Neither is viable. It's always subsidized.
- radford-neal 6y ago
  Well, that gets into whether or not nuclear plants are actually economic - or whether they only seem so if you don't account for the cost of a possible disaster. I don't know the answer to this question. But in theory the cost can be captured in an insurance premium. The government could have a role in requiring adequate insurance. But this is all separate from government actions that destroy legitimate profits, the risk of which may make private financing impossible. (One might think that the risk of government action is just like other possible risks, which investors can account for, but the point is that it's not a risk for the government itself, leading to government financing being preferred.)
ThinkBeat 6y ago
In the US insurance is another issue. The cost is massive if any company is willing to offer it. So the people paying tax has to cover both the building, the insurance, so if anything should go wrong, it si 100% on the tax payers. Then the tax payer has to pay for facilities to store all the waste for hundres of years. Something no Americans wants close to them. Last I heard the The Yucca Mountain Nuclear Waste Repository will not happen. Presently the US does not have secure facilities to store highly radioactive waste. That still has to be built and that will cost gigantic sums of money. If it has to be sized to accommodate an increase in the production of said waste, then it has to be even bigger. Presently highly radioactive waste is stored on site where it is being produced. That far from an ideal situation. At the end we have to pay for the decommissioning. It is a huge sinkhole of tax money.

pydry 6y ago

In the UK Hinkley point C got a strike price of £92.50 per megawatt hour guaranteed for (i think) 35 years. By contrast wind got about £39-£41 for two years. Future years will likely be even lower.

svrb 6y ago
A "guarantee" from the state is worth a lot less than face value as it can simply legislate away that guarantee.
- Retric 6y ago
  Stable governments don’t do this because it calls into question all the other agreements they have made.
  - tupputuppu 6y ago
    Yet even the most stable western democracies do it often enough to make investors consider nuclear power plans too risky - not because of the technology but because of political risk. For instance here in Finland companies that invested in nuclear made good profit, because of not having to pay costs related to carbon offsets. Politicians saw the profits, considered them "windfall" and taxed them away. So why would you ever invest in carbon-free nuclear power on those terms? Simultaneously there's a lot of jobs in coal, which ensure politicians keep subsidising it. From an investor perspective it's a sure deal.
    - smnrchrds 6y ago
      > For instance here in Finland companies that invested in nuclear made good profit, because of not having to pay costs related to carbon offsets. Politicians saw the profits, considered them "windfall" and taxed them away. Can you please expand on this a bit? Did they the change the law to tax something that was previously un-taxed? Did they tax it at an effective 100% rate so all the benefit would go to the state and none to the investors, or did the investors benefit too?
      - HappyDreamer 6y ago
        Yes I wonder that me too, and also, what does "considered them windfall" mean? Not a native speaker, sorry It means the politicians looked at the profits they could get from the taxes, as apples and fruit that had fallen from the trees (because of a wind), and they could pick it up with no effort?
  - iso1210 6y ago
    Yet the UK government has admitted in parliament it intends to break an international treaty signed just a few months ago
  - HappyDreamer 6y ago
    > Stable governments Are there any stable governments, when the one with the most money can buy Twitter and FB ads, or a foreign country can setup a troll army of internet manipulators, and get to choose the president? How long is the, say, 2 x return-of-money-invested, for a nuclear plant, compared to how often elections happen
- jeremyjh 6y ago
  They can try but companies sue the government and win all the time. If it weren't possible for governments to enter into enforceable contracts they'd have a difficult time getting anything done.
0xy 6y ago
Ignores the price of inconsistent delivery and the inevitable huge costs of batteries and/or gas peaking plants to supplement the inconsistent power from wind. Nobody ever factors in these costs to the price of solar or wind, and I find it extremely disingenuous. Nuclear can still be pumping power on a windless sunless day with 100% green energy. Solar and wind? Either use batteries (expensive, not really renewable) or gas peaking plants (nearly worse than coal, not renewable, expensive).
- 7952 6y ago
  Well actually a lot of people think about this kind of thing all the time. There is an entire market and industry dedicated to power grids. Sure, that price is not a complete picture. But does any price completely encapsulate externalities? But that low price is extremely positive.
- pydry 6y ago
  >Nobody ever factors in these costs to the price of solar or wind, and I find it extremely disingenuous. Speaking of extremely disingenuous, I already shared a study on exactly that in this thread 4 hours before you wrote your comment. Here it is again: https://neon.energy/Hirth-Ueckerdt-Edenhofer-2015-Integration-Costs-Revisited-Framework-Wind-Solar-Variability.pdf https://neon.energy/Hirth-Ueckerdt-Edenhofer-2015-Integratio... Sincerely, Nobody

bilbo0s 6y ago

We only have one real data point as far as actual newly constructed plants in the US go, but that data point agitates against your position. At Vogtie, the government made a rule that effectively forbids consumers in the Vogtie service region from using anything but Vogtie. So no switching to using some wind farm that someone might slap up down the road from you. Material point is that regulations generally favor these sorts of plants where consumers are concerned because the government needs the plant. (Or, at minimum, has decided they want the plant.) Not that any of it matters. Obviously, Vogtie still is a financial mess. I suppose it's probably beyond "mess". Once something's more than 200% or 20 billion over budget it's OK to go ahead and call it a financial disaster. I'm only pointing out that regulations work both ways, and when the government is trying to get a power plant built the regulations will generally work in favor of the generating entity. The essential issue is that nuclear plants cost money even if there are no regulations at all. The required metallurgy, for instance, just costs a baseline amount of money, and there's no way to cut it down. I doubt anyone could get a nuclear plant built for less than $1 Billion even in the absence of regulations. And that's for the designs we know and understand. There will definitely be cost overruns for the newer designs that we haven't worked with in production. Investors have to be able to recoup that outlay within a reasonable time frame. So the government is actually doing the right thing by "guaranteeing" customers so to speak. In an environment free of the ability to regulate, I doubt any nuclear plants get built.

alkonaut 6y ago

> I think this misses the real reason. High capital costs are no barrier to private financing as long as the eventual profits will accrue to the investors. What about the risk premiums for disasters. Isn't it only economical if states accept the cost? If we wouldn't accept an owner of a nuclear power plant to go bankrupt before cleaning up ,after a Fukushima scale accident they'd be forced to either have an insurance that made it uneconomical, or deposit many times more than the reactor costs up front, for cleanup. Neither is viable. It's always subsidized.

radford-neal 6y ago
Well, that gets into whether or not nuclear plants are actually economic - or whether they only seem so if you don't account for the cost of a possible disaster. I don't know the answer to this question. But in theory the cost can be captured in an insurance premium. The government could have a role in requiring adequate insurance. But this is all separate from government actions that destroy legitimate profits, the risk of which may make private financing impossible. (One might think that the risk of government action is just like other possible risks, which investors can account for, but the point is that it's not a risk for the government itself, leading to government financing being preferred.)

ThinkBeat 6y ago

In the US insurance is another issue. The cost is massive if any company is willing to offer it. So the people paying tax has to cover both the building, the insurance, so if anything should go wrong, it si 100% on the tax payers. Then the tax payer has to pay for facilities to store all the waste for hundres of years. Something no Americans wants close to them. Last I heard the The Yucca Mountain Nuclear Waste Repository will not happen. Presently the US does not have secure facilities to store highly radioactive waste. That still has to be built and that will cost gigantic sums of money. If it has to be sized to accommodate an increase in the production of said waste, then it has to be even bigger. Presently highly radioactive waste is stored on site where it is being produced. That far from an ideal situation. At the end we have to pay for the decommissioning. It is a huge sinkhole of tax money.