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Nuclear Power Is Not an Option for the Climate-Friendly Energy Mix

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Nuclear Power Is Not an Option for the Climate-Friendly Energy Mix A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Wealer, Ben; Bauer, Simon; Göke, Leonard; von Hirschhausen, Christian R.; Kemfert, Claudia Article High-priced and dangerous: Nuclear power is not an option for the climate-friendly energy mix DIW Weekly Report Provided in Cooperation with: German Institute for Economic Research (DIW Berlin) Suggested Citation: Wealer, Ben; Bauer, Simon; Göke, Leonard; von Hirschhausen, Christian R.; Kemfert, Claudia (2019) : High-priced and dangerous: Nuclear power is not an option for the climate-friendly energy mix, DIW Weekly Report, ISSN 2568-7697, Deutsches Institut für Wirtschaftsforschung (DIW), Berlin, Vol. 9, Iss. 30, pp. 235-243, http://dx.doi.org/10.18723/diw_dwr:2019-30-1 This Version is available at: http://hdl.handle.net/10419/201651 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu 9 1 DIW Weekly Report 30 20 AT A GLANCE High-priced and dangerous: nuclear power is not an option for the climate-friendly energy mix By Ben Wealer, Simon Bauer, Leonard Göke, Christian von Hirschhausen, and Claudia Kemfert • Analysis of the historical, current, and future profitability of nuclear power plants • Consideration in terms of economic history and financial examination of net present values of investments in nuclear power • Private economy investment was unprofitable in the past, and this also applies to new investment • Due to danger of radioactive emissions and proliferation, nuclear energy technology is high-risk • Policy makers should reject nuclear energy as an option for sustainably supplying energy Investing in a nuclear power plant is uneconomical. This holds for all plausible ranges of specific investment costs, weighted average cost of capital, and wholesale electricity prices Simulation of the net present value Specific investment costs 4 000–9 000 euros/kilowatt 1.5–8.9 Weighted average cost of capital % four to ten percent Expected loss in billion euros Electricity wholesale price 20–80 euros/megawatt hour 1 000 Megawatt Source: own calculations. © DIW Berlin 2019 FROM THE AUTHORS MEDIA “Nuclear power was never designed for commercial electricity generation; it was aimed at nuclear weapons. That is why nuclear electricity has been and will continue to be uneco- nomical. Further, nuclear energy is by no means ‘clean.’ Its radioactivity will endanger humans and the natural world for over one million years.” Audio Interview with Christian von Hirschhausen (in German) — Christian von Hirschhausen, Coauthor of the present study — www.diw.de/mediathek NUCLEAR POWER High-priced and dangerous: nuclear power is not an option for the climate-friendly energy mix By Ben Wealer, Simon Bauer, Leonard Göke, Christian von Hirschhausen, and Claudia Kemfert The debate on effective climate protection is heating up, ABSTRACT and various sides are bringing nuclear energy into the mix under the guise of “clean” energy. More and more people The debate on effective climate protection is heating up in think that in the spirit of climate protection, Germany should Germany and the rest of the world. Nuclear energy is being extend the service life of existing nuclear power plants.1 On touted as “clean” energy. Given the circumstances, the present the European level, the Clean Energy Package—the contin- study analyzed the historical, current, and future costs and uation of the long-term EU climate protection strategy—not only contains significant service life extensions but also rec- risks of nuclear energy. The findings show that nuclear energy ommends building over 100 new nuclear power plants by can by no means be called “clean” due to radioactive emis- 2050.2 A recent study by the International Energy Agency sions, which will endanger humans and the natural environ- (IEA) is also calling for nuclear energy in a clean energy system, ment for over one million years. And it harbors the high risk arguing that nuclear energy should be supported by large subsidies for both energy suppliers and new technologies.3 of proliferation. An empirical survey of the 674 nuclear power plants that have ever been built showed that private economic The “nuclear power for climate protection” narrative is hardly motives never played a role. Instead military interests have new. Nuclear physicist and inventor Alvin Weinberg, who always been the driving force behind their construction. Even was highly involved in the development of pressurized water reactors from the 1950s on,4 warned about the global con- ignoring the expense of dismantling nuclear power plants and sequences of the rise in electricity generated by fossil fuels the long-term storage of nuclear waste, private economy-only in the 1970s. He believed that nuclear power was the best investment in nuclear power plant would result in high losses— answer to the sharp increase in energy consumption.5 And an average of five billion euros per nuclear power plant, as one Tony Blair, the former British prime minister, linked the effort to protect the climate with a demand to expand nuclear financial simulation revealed. In countries such as China and power. As a result, nuclear energy was highlighted as a key Russia, where nuclear power plants are still being built, private option for climate protection in the Stern Review, a climate investment does not play a role either. Nuclear power is too protection study by Nicholas Stern that Blair commissioned.6 expensive and dangerous; therefore it should not be part of Accordingly, the present study critically examines whether the climate-friendly energy mix of the future. or not nuclear energy would be a clean, economical option for the sustainable energy mix of the future. To accomplish this from the perspective of economic history, the authors looked at the political and institutional conditions and costs 1 See for example Henrik Mortsiefer et al., “VW-Chef fordert radikalere Klimapolitik,” Der Tagesspiegel Online, June 1, 2019 (in German; available online, accessed July 8, 2019; this applies to all other online sources in this report unless stated otherwise). 2 European Commission, A Clean Planet for All—A European long-term strategic vision for a prosper- ous, modern, competitive and climate neutral economy (2018) (available online). 3 International Energy Agency, Nuclear Power in a Clean Energy System (2019). 4 Alvin M. Weinberg, “Some Thoughts on Reactors,” Bulletin of the Atomic Scientists, 15 (3), (1959): 132–137 (available online). 5 Alvin M. Weinberg, “Global Effects of Man’s Production of Energy,” Science, 186 (4160) (1974): 205 (available online). 6 Nicholas Stern, The Economics Climate Change: The Stern Review (2007) (available online). 236 DIW Weekly Report 30/2019 DOI: https://doi.org/10.18723/diw_dwr:2019-30-1 NUCLEAR POWER at which nuclear power plants were constructed worldwide. Nuclear reactor construction based on military- From the business perspective, they also present detailed related political and institutional conditions simulation calculations of the expected net present value of investments made today. The findings show that nuclear To better understand the phenomenon, at the German energy has never been a clean economical energy source and Institute for Economic Research (DIW Berlin) the authors will not be in the future. carried out a descriptive empirical analysis of all 674 nuclear reactors used to produce electricity that have been built since The economic history perspective: in the private 1951.15 Research reactors were excluded. Investment activity economy, there has never been a basis for in the sector was analyzed alongside the political and institu- commercial nuclear energy tional conditions under which the reactors were built. Four development phases were identified; competitive private- The commercial use of nuclear energy—sometimes also economy investment did not play a role in any of them.16 called “civil” use—is a byproduct of the military develop- ment of nuclear power in the 1940s, particularly the accel- 1) The early phase of commercial use of nuclear energy in erated search for atom bombs in the final phase of World the post-war era (1945 until the 1950s) was marked by the War II.7 Contrary to the initial optimism regarding the poten- advent of the Cold War between the U.S. and its partner tially lower cost of nuclear energy (“too cheap to meter”),8 by countries on the one side, and the Soviet Union along with the end of the 1950s it was clear that nuclear energy would its satellites on the other side. The further development of not be able to compete in the free market.9 In the U.S. and nuclear weapons and other military applications was the later in other countries, the armament and energy indus- focus. Nuclear power plants were primarily designed to be tries grew comfortable with nuclear power only after they “plutonium factories with appended electricity production.”17 had received significant subsidies. Further, since the 1960s the construction of new nuclear power plants has not led 2) The second phase began in the 1950s with the spread of to a reduction in fixed unit costs.
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