The last two weeks, I discussed the environmental impacts and human impacts of electricity generation from two fuel types: coal and uranium. This week I compare the economics of both options and consider a few other factors.
One way to estimate the cost of an energy source is to use the LCOE, or levelized cost of electricity. It estimates the cost of capital, maintenance, and fuel for each year and accounts for interest rates. During the past decade (2004 to 2014) costs were:
- coal: 7 cents per kWh
- nuclear: 8 cents per kWh
The EIA has estimated future LCOEs (for plants beginning generation in the year 2019) for various technologies in the US.
- coal: 9.56 cents per kWh
- nuclear: 9.61 cents per kWh
The nuclear accidents that have occurred have been expensive. By some estimates, Chernobyl cost $237 billion and Fukushima cost 105 billion. However if you average this expense over the 208,000,000,000,000 kWh generated by nuclear worldwide, the additional cost comes to: 0.16 cents per kWh. Nuclear power plants also set aside money for a decommissioning fund as well as a waste disposal fund (it’s the government that hasn’t found a place for final disposal). But the bottom line is that coal costs slightly less than nuclear.
These LCOEs are national averages and each region will consider different factors more important when deciding to add generation capacity. Some of these other factors include:
- dispatchability – coal power plants can “turn on” a little faster than nuclear power plants
- power plant lifetime – coal plants last 25-50 years and nuclear plants for 40-80 years
- facility security – nuclear plants usually have tighter security and building standards because terrorists might target them
- proliferation risk – the nuclear fuel cycle has some commonalities with nuclear weapons production (but light water reactors, the most common type, cannot be used to make weapon’s grade plutonium)
- energy mix – most regions will avoid relying too much on a single fuel for electricity
Currently, coal plants are being built with higher efficiency and nuclear plants have additional passive safety features. Both are more expensive then previous technology, but the longer-term future also holds promise. Nuclear engineers are trying to design plants that can “burn” waste and operate for 40 years without refueling. Coal plants are hoping to show the efficacy of carbon capture and storage (CCS) technology. This is when a power plant captures the CO2 from it’s flue gas, liquifies it, and stores it underground (maybe in abandoned oil wells). Unfortunately, this can require 25% more fuel to be burned to power the compressors and capture machinery. That means that other particulate and gaseous emissions may increase. Furthermore, it might make more economic sense to implement CCS with natural gas instead. However, both next generation nuclear and coal technologies are not quite cost-effective.
The bottom line
Remember that the electricity system is expected to double by 2050 providing more regions with electricity for the first time as well as transitioning land transportation from gasoline to electric. We’ll need to make tough decisions about which plants to retire and which new sources to build.
These last three weeks, I’ve only compared coal and uranium. These two fuels provide nearly 60% of US electricity and therefore should be exposed to additional scrutiny. Coal is worse in almost every measure, but still is twice as prevalent in our electricity system. We should be focusing on closing down coal first, not nuclear.