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Environment and Green Issues
  Silvano Coletti
Column  Updates
September 15' 2010

         A very interesting and controversial study appeared recently in the U.S. press, comparing the costs of nuclear energy with photovoltaic solar energy.

The paper, “Solar and Nuclear Costs – The Historic Crossover”, by John O. Blackburn, focuses on the costs of electricity for residential users in North Carolina (USA), and analyzes the different dynamics experienced by industrial and economic sectors using solar (PV) and nuclear energy to date. The study comes to a surprising conclusion.

In 2010, North Carolina witnesses an historicchange, where the price of solar electricity (for a small installation of 3 kilowatts per hour (kWh) is falling below 16 cents per kilowatt hour, the same expected cost for nuclear energy plants now under construction.

A very important note is that the calculations performed in the study include the presence of subsidies and incentives available for both sources, without which, according to the authors, solar electricity would cost 35 cents/kWh and nuclear energy would still be more than 20 cents/kWh.

This study and its conclusions have caused many reactions and certainly the benefits included in the calculations did not help to find a consensus between supporters of the two different technologies. But a response that caught my attention is given by members of the European Atomic Forum (FORATOM), the American Nuclear Society (ANS) and the European Nuclear Society (ENS).

In an official statement (pdf) published on the Internet, accusing the use of incentives as a way of drawing incorrect conclusions in favour of PV, the Italian Nuclear Association (AIN) also adds that the real costs of electricity from a 3 kWh PV system would be around 63 ¢ / kWh. At the end of the note, the nuclear association clarifies the real costs of electricity for the modern nuclear power plants currently under construction and design: 10-15 ¢ / kWh. The note of AIN is in my opinion more interesting than the study it opposes.

I will not go into detail about the incentives, since I think the comparison is more balanced than the Levelized Cost of Electricity (LCOE). The results of the study are American, yes, indeed, partly misleading, but truth is not just for the benefit of photovoltaics. The official note of AIN simply adds a touch of irony in this war of numbers.

Why I’m saying this? Back to the top: a small residential photovoltaic system of 3 kW peak is compared to a huge centralized nuclear facility (new plants have a capacity of 1600 MW), 500,000 times larger in terms of maximum power (and even more in terms of annual production, given the difference in load factors). Basically, this is David versus Goliath.

For understandable reasons this comparison choice by American authors, should have been done using LCOE and industrial-scale plants from both parties. With these assumptions, we find that solar systems a little bigger, around 100 kW already leveled reduce costs to less than 20 cents per kWh in sunny areas (like much of southern Europe or the U.S.) with plants already under 3 euros /kW in the second quarter of 2010. 

The well-known web site dedicated to photovoltaic energy, Solarbuzz, publishes regularly updated figures on the cost of electricity to equipment on the roof of 100 kW of peak power: the August figures showed an average cost of 19.14 cents / kWh. Multi-megawatt, clearly enjoying a certain economy of scale with costs now on € 2.500/kW are already around 15 cents / kWh without any incentive.

Where do the cost estimates from AIN come from? The figure of 63 cents / kWh for a residential photovoltaic system is based on a load factor of 10 percent that is available under the skies of London and that is difficult to compare with North Carolina or any sunny area on the planet.

Spain and southern Italy can easily achieve load factors of 16-18 percent, sunny U.S. states are even higher. Obviously, AIN doesn’t suggest a comparison with industrial-scale photovoltaics. But ends up giving us very valuable information: the new nuclear power would cost up to 15 cents / kWh.

I do not think any association nuclear official has previously admitted the high costs incurred, but it is certainly good to finally get the clear figures, after worrying reports of due-diligence costs of nuclear energy published recently by companies such as Moody's and Citi Group. Of course, it is likely that the cost of those nuclear sites are outdated , as the EPR projects in Finland and France are even higher, which helps explain the increasing demands submitted recently by nuclear utilities to obtain subsidies, incentives and loan guarantees.

The days are apparently gone when people declared nuclear power leveled costs around 3-4 cents / kWh. Now it seems that nuclear projects in the Western world will not be complete without substantial economic aid from governments and taxpayers.

In an industry where renewable, modular and easy to install photovoltaic systems are outperforming economic forecasts on a monthly basis and show a steady drop in costs (triggered by incentives and lower production volumes increasing), the outlook for nuclear power outlook has never appeared to look so weak.


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