There are many players in the electricity sector who believe that free market solutions are the answer. Many of these people also believe that nuclear energy must play an ongoing role the future electricity supply. But how does nuclear energy play in the “free” market?
They play very well. They get everything for free. Paid for by the taxpayers.
Ontario’s nuclear industry receives 5 important and substantial subsidies, from both the Federal and Provincial governments.
The Federal Limitation of Liability Act limits their liability in the event of a major accident to $75 million. So if a Chernobyl type incident occurs, and we have to provide compensation to residents of the southern half of Bruce County because it is no longer habitable, the nuclear plant pays only $75 million. Taxpayers pay the rest of the billions required. They get free insurance. A wind turbine owner has to buy their own insurance. Some say that nuclear reactors would never be built if they had to pay for their own insurance. The cost of the insurance, if they could get it, would be too high.
The research and development for nuclear is funded by Atomic Energy of Canada Limited (AECL), a Federal Crown Corporation. AECL has received a subsidy from the Federal government of over $200 million/year since the 1950’s, and the grants continue. Total grants to AECL have run into the billions over the years. Two years ago, the wind industry in Canada received less than $500,000 in research support, principally to support the Atlantic Wind Test Center in PEI. The other R+D in new materials, blade design, towers, controllers, software, wind resource assessment has been funded by the wind industry. One wag said that if the same funds spent on nuclear research was spent on perfecting the gerbil flywheel, we would be able to supply our power needs many times over from rodent power.
Ontario’s nuclear plants were relieved of their debt as part of the transistion to an “open” market. The Conservative government was convinced to do this by Ontario Hydro, as it was viewed as essential to allowing them to compete in the North American marketplace. Over $20 billion of the debtload incurred to build the nuclear plants has been forgiven, and the debt is now carried by the Ontario Energy Finance Corporation, a provincial Crown Corporation. The interest on this debt is funded principally by the debt recovery charge that you pay on your utility bill. Wind turbine owners have to pay their own debt charges.
When a new generator of any type is installed, they are required to pay the most of the cost of connection, which may include protection and control, new wires, upgrades to the transmission system etc. But not nuclear. The recent agreement with Bruce Power to refurbish two of the reactors at Bruce A will require new transmission to get the power out. While the cost estimates of building the new transmission are not finalized, some have estimated that it may be as high as $1.5 billion. This will be paid for by the ratepayers in Ontario through their transmission charges.
Plant decomissioning and waste storage are other costs that fall on the taxpayers. Ontario Power Generation has some funds set aside to do this, and claims it is adequate to do the job. But the waste has to be stored safely for 100,000 years. What exactly is the budget for security guards in 100,000 years? And is the number accurate? Nuclear reactors and waste material are highly toxic dangerous substances. They cannot just be left to let nature take its course. There is a reactor in Britain that has had a team of over 500 working for years on decomissioning a plant, and they have made very little progress. The nuclear industry has decomissioned very few plants, and so cost estimates are wildly unreliable. How can we possibly know what the cost of plant decomissioning and waste storage will be? When have the cost estimates of the nuclear industry ever been accurate? We haven’t even decided how it will be done. Because the materials are so toxic, society will have little choice but to pay whatever it costs to look after the problem. Yes, that will be the taxpayer. Wind turbines can be removed at little cost, with the scrap value covering the removal cost.
So the nuclear industry receives a wide range of subsidies. Their R+D is free. Their insuance is free. Their debts are forgiven, and therefore they use the plants built by the taxpayers for free. Their transmission upgrades are free. And their very costly decomissioning and waste storage is of undetermined cost, and cost overruns will be paid by all of us. Hopefully the cost will just be money.
Free markets are usually a good idea. They are the most efficient way to allocate capital resources. But in the case of nuclear, “free” has a different meaning.
Written by Glen Estill
Comments
I see the nuclear option for
I see the nuclear option for power generation, as a necessary and viable option for meeting Ontario's power demands. First of all, a Chernobyl type disaster is not possible at the Bruce Power site, or any CANDU style reactor that is used in Canada. The Chernobyl incident was a result of ignored safety systems and use of the reactor in ways that it was not intended for. With that point aside, the alleged claim that Nuclear power would never be able to afford insurance, holds no clout. $75 million dollars is probably a significant figure, considering the scale of any possible disaster.
The nuclear industry, especially the Bruce Power facility, prides itself on being an environmentally safe power option. There are zero CO2 or NOx gas emissions from Nuclear power, and it is a much better option than coal, if we are trying to reduce greenhouse gases, and subsequently reduce the rates of global warming. The Liberal government has failed to meet its promise to convert all coal generating plants by 2006, and so greenhouse gas emissions will continue to rise because of power generation. Nuclear is a positive environmental alternative.
Bruce Power employs approximately 4000 people, if you want to talk economically, we must consider the economic disaster that would be created in Grey and Bruce counties in the absence of Bruce Power. This kind of economic downturn would totally change this area, the loss of tax revenue alone, would severely cripple the area.
Wind Power is not a viable option to meet all of Ontario’s power needs. Until every individual has a wind turbine in their backyard, an Ontario powered solely by wind will be out of the question, not to mention how un-aesthetically pleasing that would be. All of our natural landscapes would be littered with windmills.
Wind power is a necessary part of the ongoing mix that is needed to meet Ontario’s power needs. Nuclear power is also a clean part of this mix, although heavily government subsidized, it probably rivals that of coal power when you take into account all of the negative affects of coal, and its emissions, things like healthcare because of smog related illness and death definitely add to the cost of coal power in the long run.
Nuclear power has been around for just over 50 years, and has been improved upon drastically over these 50 years, it is most likely that the future will hold better solutions for waste disposal. This is not to negate the problem of waste, there is an immense amount of waste that is generated, and cannot be easily disposed of, and this is definitely a down fall, but we have to weigh the long term and short term effects of the ways we choose to produce power. There is no way to produce power without disturbing the environment in some way or another. Wind power, for example, has shown to have a negative affect on migrating bird species.
All we can hope for is to find a mix of power generation that is sustainable, for both our power needs, as well as for the environment.
I think we agree on several
I think we agree on several things.
We agree that nuclear power is deeply subsidized.
We agree that nobody is arguing to shut down the Bruce or any nuclear power plant in the short run. We can't.
We agree that coal fired power is costly in terms of health and climate effects, whose cost is hidden.
We agree that the waste issue is significant.
I would hope we would agree that wind power also offers a large number of jobs opportunity for Bruce County. The fact we have less jobs in wind today than nuclear is simply because we have chosen to invest in nuclear, and we have chosen not to invest much in wind. Germany and Denmark have 100,000 people employed in the wind business. Wind is the second largest consumer of steel in Germany.
My principal argument is that the subsidies that we lavish on nuclear would be better spent elsewhere, on conservation, and renewable energy, including wind, water, biomass, and solar. I think this point remains.
Nuclear power is not without CO2 emissions - no form of power is. There are emissions to build the plant, maintain it, produce and concentrate the ore to make fuel, waste storage etc. Of course the same is true of wind turbines, solar etc, as we use fossil fuels to make steel, silcon etc. Wind in particular has fast energy payback, with all of the emissions associated with construction generated by the turbine in 3-5 months.
I think where we differ is on the risk of nuclear waste. It has to be stored safely for thousands of years. And this is beyond human comprehension, so much so, that I question if it is realistic to believe it can be done at all. It is not a technical problem. It is a cultural problem. Societies do not exist for thousands of years. 2000 years ago, nobody spoke English.
I would encourage you to read Jane Jacob's "Dark Age Ahead". A dark age refers to a period of time where we collectively lose our memory. This has happened many times in the past, and over the course of millenia, it will undoubtedly happen again. And the risk to humanity from nuclear waste is all the greater when (not if) that occurs. Another good book to read would be Jared Diamond's "Collapse".
On the birds issue, this is a myth. The average wind turbine kills 2 birds per year. The risk to migrating birds is far greater from house cats, cars, and even picture windows. I can't argue about visual issues - you can't hide wind turbines. However, beauty is in the eye of the beholder. Myself (and I am far from alone), I would prefer to see a wind turbine, knowing that we are supplying ourselves with clean, sustainable power, than know that the power we are using is polluting the air, or creating a long term highly toxic waste storage problem for millenia.
Conservation and efficiency offers a huge opportunity to reduce our use, probably by 25-50%, or even more. Part of conservation is getting the electricity price right, and that means removing subsidies. Ground source heat, energy efficient refrigeration, lighting, variable speed motors, insulation, thermal hot water heating, deep lake cooling etc. offer us enormous opportunities to reduce consumption while maintaining our lifestyle.
I say spend our dollars on developing a sustainable electricity system, that uses less, generates far more from renewable sources, and leaves a sustainable legacy.
And I think it is inappropriate to propose new nuclear power until the alternatives have been tried. And so far, we have only rhetoric, and tokenism. We have just scratched the surface. We can and should do better.