Maybe so, but so What?

Wednesday, June 19, 2013

I ran into a lengthy cost-benefit analysis of nuclear power this morning by someone who has a "passion for creating a low-carbon future to address the threat of climate change". (I do not share his passion.)

The author raises a good point that advocacy of a given power source should be based on good accounting. That's a good start, but as I skimmed his article, I noticed a couple of points.

First, he notes the following about nuclear power, which he claims is on its way out:

Even while the nuclear industry is able to externalize its costs for insurance (which are federally limited), loan guarantees (which are federally backstopped), decommissioning (which is pushed onto ratepayers) and waste handling (which is pushed onto taxpayers), it still lost. If it had to stand on its own and pay its full insurance costs like every other energy source, we could never build another nuclear plant in America, because no private investors would be willing to take that kind of risk. It's hard to imagine how the economics could be more tilted in nuclear's favor (although I'm sure its proponents have ideas on that).
I am no fan of the government handing out favors to any industry, but I am likewise not a fan of the government imposing higher costs through regulations on any industry, either. I didn't have time to read this article thoroughly, but I can think of any number of ways (e.g., environmental impact studies) that the government is making the production of nuclear power more expensive than it should be. Setting aside the faulty premises of such cost-benefit-analyses, regulatory hurdles (and their unintended cosequences) immediately make the numbers suspect. 

Later in the article, the author states that "[t]he reason nuclear is dying is economics", and that:
Meanwhile, outside the fantasy world inhabited by the [Breakthrough Institute] the real energy market has moved on. The US installed 13,200 megawatts of wind capacity in 2012, according to Bloomberg New Energy Finance.
Furthermore, the author notes that the amount of wind generation capacity installed last year more than replaces the combined output of four nuclear plants headed for retirement.

How much of this industry is being propped up by the government?

Again, I haven't read this article thoroughly, but it raises a couple of good points: (1) It could be entirely correct: Nuclear power -- in the context of our government-distorted economy -- could well be a more costly way to produce power than, say, solar or wind (regardless of what might hold in a free economy); and (2) The very fact that different forms of power have "promoters" based on their desire to influence government control of the economy, and who have agendas other than what form provides power the most inexpensively shows us just how far from capitalism (and a culture that values individual prosperity) we have come. We shouldn't be trying to persuade each other of what public utilities should be using to create electricity, but individually weighing how to get power at the least cost and the greatest suitability for our own purposes, whether that involves buying it from a company or obtaining the equipment to generate it ourselves.

This article at best provides data that is of mainly diagnostic value with respect to how badly distorted our economy is.

-- CAV

No comments: