I long ago swore off the Wall Street Journal's editorial page -- the last straw for me was their cruel swipe at departed "dope fiend" Jerry Garcia back in 1995. But on Monday a friend forwarded me a WSJ editorial whaling away at renewable power's production tax credit:
Solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and ... nuclear power $1.59. Wind and solar have been on the subsidy take for years ...
Now, they insinuate, it's time to kick wind and solar out of the nest to fly (or not) on their own, just like Uncle Nuke did, decades ago.
What's up?, my pal asked, knowing that I not only have a thing for wind power but used to be a walking encyclopedia of nuclear power costs. After a quick trip down memory lane, pencil in hand, here's my brief on federal subsidies for windmills and nukes.
The score (in 2007 dollars):- Reactor subsidies, 1950-1990: $154 billion, or $3.75 billion a year.
- Wind power subsidies, 1983-2007: $3.75 billion 25-year total.
Over the past 25 years, the entire federal subsidy for wind power has been no greater than the subsidy bestowed on nukes each year from the fifties through the eighties.
My wind power subsidy estimate uses the WSJ's $23.37 per megawatt-hour figure, which came from the new Energy Information Administration report, "Federal Financial Interventions and Subsidies in Energy Markets 2007" (PDF). Most of that is the $19.00/MWh production tax credit; the remainder is primarily for research and development.I applied this $23.37 figure to all U.S. wind power production from 1983, the first year for which the feds tabulated wind energy output (a mere 2,800 megawatt-hours), through last year's 31.9 million MWh. The 25-year total of $3.75 billion is derived in this simple spreadsheet (XLS).
For reactors, I looked up my 1992 report for Greenpeace, "Fiscal Fission: The Economic Failure of Nuclear Power" (PDF). In this "Report on the Historical Costs of Nuclear Power in the United States," Cora Roelofs and I compiled capital, operating, and subsidy costs for the entire U.S. nuclear power industry on an annual basis from 1968, when the first commercial-size reactors entered service, to 1990. We also reached back to 1950 to pick up costs for R&D during the industry's protracted pre-commercial incubation.The total 1950-1990 subsidy cost came to $97.0 billion in 1990 dollars, which equates to $153.8 billion in 2007 dollars. About half of that was for R&D. The remainder, summarized in the same spreadsheet and fully dissected in my Greenpeace report, was for federal regulation, shortfalls in enrichment and waste funds shunted to taxpayers, and tax breaks that allowed utilities to pay taxes later with less-valuable money (this latter category alone was worth $41.5 billion).
The total nuclear-industry subsidy of nearly $154 billion apportioned over the 41-year period comes to $3.75 billion a year, coincidentally matching the entire 25-year subsidy for wind power.
This comparison is far from comprehensive. On the nuclear side, I excluded vast categories of government support for nuclear power, most notably the Price-Anderson Act, which since 1957 has shielded utilities from full liability for potential costs to society from reactor accidents. I also omitted a dozen other categories of public subsidy ranging from the ideological support that crowned nuclear power an official technology, in Prof. Steven Mark Cohn's memorable phrase, and smoothed the path to capital, to the more concrete support the industry obtained from U.S. Bureau of Mines uranium exploration programs.
On the wind side, my procedure of calculating annual subsidies from the current per-MWh subsidy doubtless understates early support for wind power, when R&D per MWh would have been greater. Still, I think the bottom-line finding of nuclear power's 25-to-1 subsidy advantage over wind power is about right.
As for the WSJ editorial, was it irony or just coincidence that as it ran on Monday, John McCain was posing in front of a wind turbine factory in Oregon and the Energy Department was issuing its most upbeat wind power assessment yet?
When the WSJ editors write ...
Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.
... you have to wonder if even they believe it.
Stewart Brand’s nuclear enthusiasm falls short on facts and logic
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Craig Allen Posted 8:32 pm
15 May 2008
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David Bradish Posted 9:27 pm
15 May 2008
It's too bad you've spent so much effort analyzing nuclear power's costs and subsidies. If you really wanted to have a meaningful discussion, you should compare the costs and subsidies of all energies and technologies. Instead, you cite your 98-page Greenpeace report which discusses only nuclear and then compare the data to a back of the envelope calculation you did on a spreadsheet. Hardly seems fair.
Here's a blog post I wrote at the end of 2006 linking to a study that actually compares the incentives for all energies. http://neinuclearnotes.blogspot.com/2006/12/truth-about-g ...
The study finds that nuclear has received the most dollars from R&D. Yet when you add up all the other methods of incentives, nuclear energy has received 10 percent of the total energy subsidies since 1950. What's also interesting is that photovoltaics have received the most subsidies of any technology.
David Bradish, NEI
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Sean Casten Posted 10:30 pm
15 May 2008
As a guy who likes the WSJ business content, I find their editorial page to be virtually incompetent on all things economic and share your deep distaste for them. Not because of Jerry Garcia per se (never much of a Dead fan!), but because they continually wrap Pork They Like in free market clothing while bashing Pork They Don't as subsidies. This is only the latest example. They are perhaps the worst example of a group that confuses business advocacy with market advocacy (although Cato certainly works hard to out-rascal them from time to time on that score.)
That said, you might want to look at the GAO report on the magnitude of various federal subsidies for a level, unbiased perspective. It confirms your analysis, even while noting that it hasn't included many of the biggest subsidies to nuclear (like liability guarantees) in it's analysis. For R&D alone, the feds threw $6.2 billion at nuke from 2002 - 2007. By comparison, the total of all R&D payments and tax breaks paid to all renewables during the same period was $4.2 billion. GAO was fairly critical of congress in that report, essentially saying that you cannot on the one hand criticize emerging techs for not competing on their own merits and on the other throw ever greater sums at the status quo technologies. If I thought it would get anywhere, I'd forward it to the partisans at the WSJ editorial page...
Do note that the GAO data is on an absolute basis so - per the NEI comment - it doesn't quite normalize per MWh, but that's disingenuous as a metric in my opinion. $ spent on R&D produces disproportionately fewer MWh per dollar than pork thrown at operating power plants. $ to wind isn't pure R&D, and $ to nuke isn't pure pork, but the comparison makes it pretty clear that MWh per dollar of federal investment is a silly measure, except in the infinitely long term.
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tomgray Posted 11:56 pm
15 May 2008
As another commenter notes, this is disingenuous. While wind enjoyed a brief but very small boom in the early 1980s, its steady growth did not begin until late 1998--we're comparing wind after one decade with nuclear after five. My guess would be that in 1970, the per-kilowatt-hour returns on nuclear subsidies would have looked pretty puny too.
The American Wind Energy Association has prepared a more detailed response to the EIA report.
Regards,
Thomas O. Gray
American Wind Energy Association
www.powerofwind.org
www.awea.org
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Charles Komanoff Posted 12:10 am
16 May 2008
Sure, uranium mining requires energy inputs, but for currently mined grades of uranium those inputs are very small, per kWh of electric output.
David Bradish --
Your assertion that "photovoltaics have received the most subsidies of any technology" isn't backed up by the table in your linked blogpost, which shows cumulative subsidies for "Solar" only half those for nuclear.
In your same table, the nuclear R&D subsidy figure looks to be only around half of mine (adjusted for different time periods and slightly different base year). Your accounting also omits tax savings that flowed to reactors from accelerated depreciation, artifically short lifetimes assumed for tax purposes, and the ITC. Perhaps you should give my "98-page report" a closer look.
Sean Casten --
Thanks for your comments. Not a Deadhead, I invoked Jerry because my revulsion over the WSJ's spitting on his grave made me bring down the curtain on 20 years as a subscriber.
Charles
http://www.komanoff.net
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GreyFlcn Posted 1:24 am
16 May 2008
Which would benefit hydro, and coal. But wouldn't really benefit other renewables at all.
This also explains the low subsidy given to nuclear power. (Lowest of any study I've seen)
Studies differed in how they treated federal subsidies to electricity. EIA 1992 and EIA 1999-2000 evaluated the subsidies, but did not include
them in their reported totals. MISI did not include general subsidies to electricity at all. Heede et al. allocated subsidies to fossil fuels in
general, while Koplow allocated them to specific source fuels. PNL included them as a separate subsidy category.
http://cda.mrs.umn.edu/~kildegac/Courses/Enviro/3008/Kopl ...
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David Bradish Posted 1:48 am
16 May 2008
Charles, if you go to the last chart in the link I provided, you will see the distribution of dollars for selected technologies. I said photovoltaics, not solar. Perhaps you should give my blogpost a closer look.
We could go back and forth about R&D dollars but I have already stated that nuclear has received the most R&D dollars since 1950. Let me ask this (and no-one should take offense to this): how much R&D does wind really need? From what I see, and I'm sure others would agree, wind's PTC is the type of subsidy they need, not R&D. I could see solar technologies requiring a lot of R&D and according to the data I presented, they've received a lot of it.
Nuclear technology, I would argue, is some of the most advanced energy technology in this world. The US needs to continue to support R&D for nuclear in terms of next generation plants and reprocessing used fuel. But nuclear R&D is not short-changing renewables as some would like to think. Here's the Cato Institute who are no fans of nuclear (p.9):
"R&D dollars have not handicapped renewable energy technologies. Over the past 20 years, those technologies have received (in inflation-adjusted 1996 dollars) $24.2 billion in federal R&D subsidies, while nuclear energy has received $20.1 billion and fossil fuels only $15.5 billion. To the extent that nuclear power has received heavy favor from government, the primary victims have been oil, gas, and coal--not renewable energy."
http://www.cato.org/pubs/pas/pa422.pdf
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Jonas Posted 2:59 am
16 May 2008
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KenG Posted 3:22 am
16 May 2008
I think the answer you are looking for is in Table ES5 in the recent EIA report:
http://tonto.eia.doe.gov/FTPROOT/service/srcneaf(2008)01.pdf
It indicates that biomass, hydro, geothermal, landfill gas, and others are centered around $1.00 per megawatt-hour or less while the "sexy" renewables (solar and wind) are about 25 times that.
If your interest is in actual total magnitude instead of per unit production, the 2007 generation values are also in the table so you can calculate that.
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Charles Komanoff Posted 3:40 am
16 May 2008
Charles
http://www.komanoff.net
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KenG Posted 4:04 am
16 May 2008
Are we arguing about the right thing here?
Is it really very important how much subsidy one assigns to nuclear from 30 or 40 years ago?
Isn't the real distinction here over production credits vs. R&D? Nuclear go massive R&D subsidies many years ago and it resulted in nuclear today producing the vast majority of our carbon free electricity. (A "push" subsidy, if you will.) current nuclear subsidies continue the theme in that they are (at least now) limited to early deployment.
Some renewables (particularly wind) have been supported by production credits. (Call that a "pull" subsidy.) Is this working or is it just creating a dependent industry?
If this difference reflects the nature of high tech (nuclear) and low tech (wind/solar thermal) where do we expect these policies to take us? I'm not impressed with the WSJ editorial and I'm not opposed to the renewable subsidies. I just can't get to a conclusion that says we don't need a lot of new nuclear from the history I see.
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dkoplow Posted 5:12 am
16 May 2008
http://neinuclearnotes.blogspot.com/2005/11/taking-second ...
Also, EIA studies alway come out amongst the lowest of all subsidy estimates done. This is partly due to their narrow research mandate, partly due to the use of inconsistent baselines where similar programs are sometimes included and sometimes excluded, and other factors. See more here (note that this page was created for the prior two EIA subsidy studies, but most of the same issues remain in the third):
http://earthtrack.net/earthtrack/index.asp?page_id=201&am ...
Especially for subsidies to nuclear, the key element on the EIA study is that they looked at current subsidy uptake. Thus, the massive subsidies to new reactors, though acknowledged to exist in the report, are not reflected in final numbers at all. They matter a huge amount going forward though. While per kWh subsidies to wind will not rise in future years, but those to nuclear will rise sharply.
For more on nuclear subsidies to new-build plants, see the link below. Note also on page 3 that the nuclear new build subsidies per mt/CO2e -- even displacing coal (which is the industry's best case) -- is still at least above $80. The subsidy cost is 20 to 30 times the value of these offsets on the Chicago Climate Exchange.
http://npec-web.org/Frameset.asp?PageType=Single&PDFF ...
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GreyFlcn Posted 5:14 am
16 May 2008
If we're going to compare annual growth versus annual subsidy, thats one thing.
If we're going to compare total subsidy versus total capacity, thats another.
However Annual Subsidy versus Total Capacity, is complete gibberish, because it neglects to massive Total Subsidy given to nuclear power.
For instance if we were to use
Total Subsidy per Annual capacity, Wind/Solar/Geothermal pull ahead.
__
Also a suspicion I have with the Bezdek study.
He's probably including research benefiting PV which was used for Space programs. While neglecting to include any of the research benefits Nuclear power has received from Military programs.
Considering his crass approach of lumping solar and geothermal in with the massive expenditures of hydropower, and using that as the only metric to represent renewable energy in his text, I wouldn't put it past him.
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F James Handley Posted 6:07 am
16 May 2008
And they're absolved of liablity for long term radioactive waste encapsulation and monitoring. Which is why Congress has to FORCE states to take nuclear waste along with hefty bribes.
And speaking of subsidies, what about the elephant in the room -- oil is subsidized by oil wars. If the material cost of the Iraq wars were factored in, what would gasoline cost? (If the death toll were factored in, even at $1 million per life, the cost would be astronomical.)
Whatever subsidies wind, solar and other alternatives enjoy, they pale in comparison to these.
And of course, don't forget that the effect of all these subsidies is to make energy conservation very un-attractive. In an economy where so much energy is wasted, conservation is the cheapest "alternative" fuel around.
Nuclear and oil subsidies are bribing us to waste energy and we're doing a fine job.
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KenG Posted 7:12 am
16 May 2008
This really doesn't belong in this discussion, but if you're going to bring it up, please do your homework and get it right.
PA doesn't limit liability to $300M. It requires each plant individually to purchase $300M in insurance. These are aggregated into a combined $10 billion coverage that is applicable to each plant. After $10B, PA doesn't actually limit the liability. After $10B is paid, Congress can levy future fees against the nuclear industry in total for any excessive cost.
As far as PA being a subsidy, it has been in effect for over 50 years and has, to date, cost the taxpayers and federal government exactly $0. I'll sign up for all the subsidies you want at that price.
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tomgray Posted 7:24 am
16 May 2008
Good question, but it begs the further question: what are we to make of the fact that 98% or so of federal energy subsidies today go to industries that one would think should be relatively mature (e.g., oil & gas)? And why should wind unilaterally disarm?
Regards,
Thomas O. Gray
American Wind Energy Association
www.powerofwind.org
www.awea.org
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tomgray Posted 7:38 am
16 May 2008
It's interesting to note that while changes to the utility system will be needed to accommodate large amounts of variable wind, similar changes were required with the advent of nuclear power ...
Regards,
Thomas O. Gray
American Wind Energy Association
www.powerofwind.org
www.awea.org
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BILL HANNAHAN Posted 9:21 am
16 May 2008
For every 1¢ per kWh cost increase, Americans will be charged an additional $40,000,000,000 per year. The only important point to be taken from all this is that the amount of money we spent during the last 30 years on energy research was trivial compared to the magnitude of the looming problem.
We have wasted the last 30 years, get over it, the only question worthy of debate is how we should proceed from here.
My recommendation is to raise R&D to $90 billion per year, to maximize our options, it will cost just 2.25¢ per kilowatt hour. Existing nuclear power plants would earn $18 billion per year, enough to build at least one prototype of each new reactor design, and to finance the design and construction of a facility to build floating nuclear power plants. That leaves $72 billion for non nuclear energy R&D.
The world is still powered by an abundant supply of fossil fuel. Right now fission is the only proven technology that can produce unlimited amounts of reliable dispatchable low emission energy at an affordable cost. If you really do not like nuclear power, keep in mind that more R&D provides the best chance of finding a better source. We need to develop energy sources cheaper than fossil fuel that the whole world can afford and will embrace.
Regarding insurance.
List all the people businesses and corporations that are fully insured for the worst possible accident. I support the repeal of Price-Anderson and treating nuclear power like other industries, with common sense.
http://gristmill.grist.org/story/2008/5/2/75132/75324/#20 ...
" It's interesting to note that while changes to the utility system will be needed to accommodate large amounts of variable wind, similar changes were required with the advent of nuclear power ... "
What were those?
France has adapted well to 80% nuclear, while even staunch wind supporters claim only 20% wind is possible. How do we close down coal plants using windmills. If we close down the coal plants what will wind do for backup power, energy storage, seasonal variation and power conditioning?
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RichNYC Posted 4:52 am
17 May 2008
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Robco1 Posted 12:52 pm
18 May 2008
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GRLCowan Posted 1:46 am
19 May 2008
How shall the car gain nuclear cachet?
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President Lindsay Posted 7:10 am
20 May 2008
One of the big problems with costs of nuclear power has been precisely because we never settled on a standard design. It's counterproductive to propose building a smorgasbord, prototypes or not. It's easy enough to study and decide on a design up front. Note that the French have standardization and it's worked very well for them. As for floating plants, why on earth? You have to be connected to the grid. If it's a question of access to cooling water, just run pipes in and out as far as necessary to reach substantial littoral currents, running from the plant on shore.
One point not made anywhere here is that a lot of that R&D money went into a decade-long project to solve all the problems with nuclear power: waste, proliferation, safety, and economics. Not only were the researchers astoundingly successful, but at the end of that success Congress pulled the funding, Clinton ordered the experimental facility (the best in the world) dismantled, and the DOE ordered those who'd worked on it (including about 500 Ph.D.s) to NOT publicize what they'd done. Why? Could it be because they'd proved that we already have enough fuel out of the ground and processed to supply all the energy needs of the entire planet for nearly a thousand years? (That's rhetorical, the answer is yes.) We could completely halt oil and gas drilling as well as coal and uranium mining.
Whatever wind, solar, and hydro can contribute, this Generation IV nuclear technology can supply all the rest with ease, and with a cost less than business as usual. It could, in fact, provide all the energy humanity needs even without ANY contribution from wind and solar. Head in the sand politics is all that's keeping us from making the necessary decisions.
All of this--the technologies, the economics, and the politics--will be available to examine in detail with the publication of Prescription for the Planet in July. OK, shameless plug. But it's very pertinent to these issues. You may want to check it out in a couple months.
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BILL HANNAHAN Posted 2:51 am
21 May 2008
I agree. Research and development should not be considered a subsidy. It is an investment in the future, like medical research.
" One of the big problems with costs of nuclear power has been precisely because we never settled on a standard design. It's counterproductive to propose building a smorgasbord, prototypes or not. It's easy enough to study and decide on a design up front. "
We do not have a standard design car, airliner, windmill or solar cell. If we had a one designed airliner and a design defect was detected the impact on society would be much worse that would be the case now.
Reactor design is still very primitive. What are the odds that a steroidal submarine reactor is the best design? The French succeeded because the energy density of uranium is 1 MW day per gram.
" As for floating plants, why on earth? "
There are several reasons. Mass production of floating nuclear power plants will dramatically reduce man-hours and cost while improving quality. It allows plant construction and site preparation to be done in parallel rather than in series. It eliminates NIMBY problems. Most people live within a few hundred miles of a shoreline, so transmission distances will be short.
I look forward to your publication.
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