On "the cost of nuclear"

Solving the problem, is much simpler than you think

I recently spoke to Dave Nicholls, the chairperson of the South African Nuclear Energy Corporation, on the cost of Nuclear Power. Dave has spent most of his career in Eskom and has lot of practical operational experience. He is also a former Nuclear Engineering Officer in Royal Navy.

He pointed me to an article and a few reports on Nuclear Power that summarizes what is going on with regards to the cost. We are constantly told that “Nuclear is too expensive”, but not if you actually evaluate the facts for yourself.

Essentially the US and France has an ageing Nuclear construction workforce and therefore had to build back at the top of the S curve. They are now relearning the painful lesson that critical technical expertise should not be lost in the name of ‘deregulation’, or that risk managers who blow up national utilities in order to “optimize the costs” i.e. strip-mine them, as occurred in Russia’ in the 1990s (in every industry except for Nuclear), are actually contributing to the problem of middle class destruction.

The Chinese, Russians and South Koreans, on the other hand, managed to maintain their nuclear expertise. They structure their projects through vertical integration to reduce the cost and finance their projects through a vendor finance system, where they organize the CAPEX with ultra low interest loans (usually 85% of the CAPEX comes from national banks), this is a similar approach that the US used during the Marshall Plan, and France during the highly successful Messmer Plan.

The Messmer Plan saw France construct 1 Nuclear reactor per year in the 1980s - the fastest rate of decarbonization, except for the only country with a massive amount of hydropotential - Norway.

Today France’s C02 emissions is 5x lower then neighboring Germany and France has affordable electricity prices that come in below the EU average. So does nuclear powered Sweden.

In laymen’s terms, if South Africa were to construct another Nuclear Power Plant, under a Vendor finance system, then the contractor carries the construction risk and “we only pay when the juice starts flowing”. In fact this is what all low electricity countries in the world are currently doing.

As the figure below shows, the US is building at the top of the S Curve and South Korea, Russia, China and Japan at the bottom of the S Curve.

Dave's view is that you need to build about 3 plants before you hit the bottom of the S-curve and the UK 's projected costs for Sizewell C successive units is in line with that. It remains to be seen if EDF will achieve it, but the recent data coming out suggests that the French are being geared up for it.

The OECD further came out with a report about renewables in 2018 where they tried to estimate the cost of integration and, no surprise, if the Full Cost of Electricity, i.e. integration costs are taken into account, they might not be as affordable as we are being led to believe. I acknowledge that others dispute this number.

That number also seems to tie in with what is written on Eskom’s Balance Sheet.

That tiny detail aside, I asked Dave about the LNT model of Radiation (As you know, I had a 3 hour interview with Edward Calabrese on its history and how a corrupt process approved it). LNT suggests that any dosage of radiation is dangerous.

But recent information obtained under the US Freedom of Information Act, showed how Bureaucrats tried to censor whistleblowers when they were pressed to provide evidence for LNT!

In fact, radiation might be beneficial, as there is also evidence of Radiation Hormesis i.e. we might have natural immunity to radiation!

Data from the Atomic Bomb survivors, in peer reviewed publications, show that those below a certain threshold actually had FEWER RATES of cancer and the 70+ year dataset, show “no evidence of genetic abnormalities”.

LNT, from an economics perspective, might be one of the most expensive scientific mistakes to date!

But to put my own money to my mouth on radiation, this year I went to Ramsar Iran, to meet Yazdan Taleshi (یزدان طالشی), an 80 year old man who lives in a background radiation of 250milisieverts per year. His home is one of the most irradiated places on planet earth, he grows Sour Clementine (Naartjie Trees) in the backyard and they are delicious (I ate a forbidden fruit).

250milisieverts per year is 25x the recommended “International Safety Dosage” at Nuclear Power Plants! By our current ALARA standards, I should be, green, dead and full of genetic deformalities.

If there is any threshold for radiation (no matter how low the dose), then the business case for waste comes down to storage only.  All that it would take is a few trucks over night to drive from Koeberg to place the 200ton Casks (that are build to last 200 years) to a remote location. Decommissioning costs that are around 15% of CAPEX would be significantly lower.

Nuclear Waste is actually becoming an asset, because with the half life decay, it is running at a negative interest rate (i.e. it makes sense to kick the can down the road) and has a potential to be reused in other forms of reactors.

South Africa already has a waste depository at Vaalputs, in the Karoo, that is on a 100km² land in the middle of the desert, a location with one of the lowest population densities in the world. The water table 1000km below the surface and therefore no rust occurs and seepage is simply impossible.

If the IAEA would allow for the trade in waste, SA could potentially be paid to store it, invest the money on the market, and let the project pay for itself.  We can also potentially become experts in the Nuclear Fuel Cycle. It can launch a gold rush in new opportunity and investment!

To my readers in the UK and US (since you're so allergic to government intervention), a shady '(or forward-looking) businessman could potentially buy a piece of land in a desert, get someone to pay you for the storage, invest that money in the market and become a trillionaire as the waste decays to the safety threshold.

If that happens to be either any of you, dear reader, please think of me if my children one day has to get a student loan to study Nuclear (not renewable) Energy.

If you happen to disagree, then please show me a better deal for South Africa, than Koeberg.

Note: Before you accuse me of having no authority on this subject (as the ecofanatics whose heart is in the right place, always do), well my Masters Degree was in Nuclear Civil Engineering and I have done a lot of interviews with experts on this topic. But as I encourage my readers, please judge me on the facts, not my credentials.