Andreas Späth

The true cost of coal and nuclear

2011-10-12 08:20

Andreas Späth

The day when the market price of electricity generated by using renewable energy sources will be on par with that produced by nuclear and coal-fired power plants is closer than you might think. In fact, if all of the behind-the scenes costs - the expenses not actually included in the price paid by consumers - were factored in, renewable energy would already be cost competitive.

In the case of atomic energy, for instance, the financial costs involved when nuclear reactors are shut down are only starting to become clear now. A study released at the end of September suggests that Germany’s efforts to decommission its fleet of nuclear plants will come at the expense of at least $24.5bn and that doesn’t even include the cost of long-term nuclear waste disposal. Analysts fear that the final bill may significantly exceed the sum the country’s nuclear power industry is legally required to put aside for the purpose.

In Japan, estimates for the economic damage done by the Fukushima nuclear disaster and the cost of the clean-up continue to increase. Elevated radiation levels in agricultural produce like rice, vegetables, beef, milk and tea have caused major losses in revenue and dealing with the contaminated soil in the region around the stricken power plant is turning out to be a gargantuan task.

Last week, a study reported very high levels of radioactivity - as much as 30 times above the legal limit - in soil samples from as far away as 60km. Yuichi Moriguchi, a professor at the University of Tokyo, estimates that as much as 100 million cubic metres of topsoil will have to be removed from a 2 000 square kilometre area. That’s the equivalent of a city block, 100 metres long on either side, piled with radioactive soil to a height of 10 000 metres!

The process of removing contaminated topsoil from the grounds of 584 schools, kindergartens and day-care centres has already begun. It involves a comparatively miniscule 180 000 cubic metres of soil to be dealt with at an estimated $80m.

You’ll often hear critics of renewable energy complain that solar and wind powers are only viable because of massive state subsidies. In reality, however, cumulative as well as average annual subsidies for renewables have amounted to only a fraction of those granted to the nuclear and fossil fuel industries for decades.

In Germany alone, nuclear subsidies handed out during the last 50 years are estimated at some $230 billion. According to a recent report by venture capital firm DBL Investors, the US government has assisted the nuclear, coal, oil and gas industries to the tune of more than $630bn throughout their history. In stark contrast, renewable energy and biofuel companies only received between $40bn and 50bn.

Generating electricity by burning coal turns out to be even more expensive than nuclear power. The US government estimates the social cost of carbon - the total economic damage done for every ton of carbon dioxide emitted – to be $21 as of 2010, but new research by economists Frank Ackerman and Elizabeth Stanton suggests that it may actually be as high as $893 and rising to an astronomical $1 550 by 2050.

Another new study, published in the prestigious academic journal American Economic Review in August, identifies air pollution from coal-fired electricity generation as the US’s largest industrial contributor to external (ie not financially accounted for) costs. The authors state that “coal plants are responsible for more than one-fourth of GED (gross external damages) from the entire US economy” and find that air pollution from US coal power stations causes about $53bn in damages every year, mostly as a result of the negative health effects of sulphur dioxide, fine particulates and nitrogen oxides.

And that doesn’t even include damage due to climate change. The study shows that, on average, the harm done by US coal plants is more than twice the market price of the electricity they generate. Writer Dave Roberts has it about right when he calls this a “net value-subtracting industry. [...] A gigantic, blood-sucking parasite that’s enriching a few executives and shareholders at the public’s expense.”

If nuclear and coal power are so expensive, why is the South African government building new power stations that will ensure that we remain addicted to them for decades to come?

- Andreas has a PhD in geochemistry and manages Lobby Books, the independent book shop at Idasa’s Cape Town Democracy Centre. Follow him on Twitter: @Andreas_Spath

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