I try to be funny on this blog, but now for something completely different. I had the most annoying "conversation" at work today. I'm wanting to talk about work but there's already a conversation going about how coal or nuclear are the only options and renewables can't ever play a part. So as I couldn't work I "joined in". I tried to say that the only way either could compete with renewables on price was by externalising the costs. So their way of discussing that was to simply tell me I was wrong and talk over the top of my reasoning.
Since I can type here and no-one can talk over the top of me, I'm going to climb on my soap box and talk about externalised costs. The externalised cost of coal is well known: possibly making the planet uninhabitable. Also taking assets owned by all and using them for the benefit of a few without compensation. Nuclear is different. The upfront cost is known. It's between 4 and 10 dollars per watt, but lets call it 4 dollars per watt. Australia draws 222 billion kWh a year (CIA fact book). That's an average of about 25 GW. So that would cost about 100 G$ to install nuclear replacement. The interest payments on that would be about 5 G$/yr. Replacement would be another 5 G$/yr to keep them up to date. So that's 10 G$/yr. Can't externalise that, but what is externalised is the risk. If one blows up then everything downwind of it is rendered uninhabitable for about 100 years or so. (Which in economic terms is forever). So say it made a city like Sydney uninhabitable. Any normal business would have to have insurance to cover any public liability costs. So what would be the cost of public liability to cover that? First you have to have some idea of the risk. There have been around 25 nuclear accidents in the 15000 reactor years that we've racked up so far in all the reactors around the world. There have been really 4 reactor meltdowns that breached the containment completely. However 3 happened together so lets call them 2 meltdowns. So say you get 2 meltdowns (really 4) per 15000 reactor years. To supply Australia you'd need about the same number of reactors as Russia, about 30. 15000/2/30 is 250. So on average you would expect a major meltdown every 250 years. So to make it worth while for an insurance company to cover the “worst case” you should expect to pay somewhat more than 1/250 of the total worst case cost. Say 1/100th of the cost. So what is 1/100th of the cost of building a replacement city and compensating all the business that have lost money from the disruption. It's hard to say, but given that you'd need to build new factories, schools, roads, hospitals, railways, ports, dams, sewers, houses, opera houses etc lets say a million dollars per person. There's 4 million people in Sydney so that's 4 T$. So the externalised cost is 1/100th of that per year. 40 G$/yr. Add the non externalised cost and you get say 50 G$/yr to make 222 billion kWh. This ignores the cost of mining and enrichment.
Compare that to renewables. Powerplant level Photovoltaics are down to 1 dollar per watt, but the sun doesn't shine all the time. Say 10 dollars a watt effectively (surely a generous multiplier!). That's 250 G$ fully installed. Using the same maths as nuclear to estimate cost of borrowings and replacement after 20 years comes to 25 G$ a year. That's half the price! (even ignoring the cost of mining and enriching uranium and disposing of the waste and decommissioning the plants which is thought to be similar in cost to building them in the first place)