State support for nuclear power

John Cochrane, in a series of interesting observations on State Capacity Libertarianism, notes:

I don’t see just why nuclear power needs “state support,” rather than a clear workable set of safety regulations that are not excuses for anyone to stop any project.

Apart from the fact that our government created nuclear power at great expense and hurry, I would most of all cite the Price-Anderson Nuclear Indemnities Act of 1957  Here is Wikipedia:

The Act establishes a no fault insurance-type system in which the first approximately $12.6 billion (as of 2011) is industry-funded as described in the Act. Any claims above the $12.6 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act’s passing, it was considered necessary as an incentive for the private production of nuclear power — this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate.

I am less clear on where the insurance industry stands on this matter today, but in general American society has become far more litigious, and it is much harder to build things, and risk-aversion and infrastructure-aversion have risen dramatically. Furthermore:

  • Jurisdiction is automatically transferred to federal courts no matter where the accident occurred.
  • All claims from the same incident are consolidated into one Federal court, which is responsible for prioritizing payouts and sharing funds equitably should there be a shortfall.
  • Companies are expressly forbidden to defend any action for damages on the grounds that an incident was not their fault.
  • An open-ended time limit is applied, which allows claimants three years to file a claim starting from the time they discover damage.
  • Individuals are not allowed to claim punitive damages against companies.

So the odds are that without a Price-Anderson Act America’s nuclear industry would have shut down some time ago, with no real chance of a return.

More generally, I am not sure which level or kind of liability should be associated with “the free market,” especially when the risks in question are small, arguably ambiguous, but in the negative scenarios involve very very high costs.  Which is then “the market formula”?  That question does not make much sense to me, so it seems to me that, details of the Price-Anderson Act aside, all scenarios are by definition somewhat governmental.


Could anyone get a permit in a timely way to build one today?

I doubt it very much. Someone downwind halfway across the country could get a judge to issue an injunction to stop the project.

With nuclear power, "being downwind" has as much meaning as being downwind from solar panels.

My understanding is that little nuclear accident in Fukushima would have been worse if the wind had been traveling along the coast, as it will do tomorrow, instead out to sea as it's doing now. That could have considerably increased the cost from the current $187 billion estimate, which is around $1,500 per Japanese citizen or about $4,000 per Japanese household.

Same thing with Chernobyl. See the radiation map from Wikipedia and note that Kiev is much closer than most of the affected zones. Everything hinged on which way the wind happened to be blowing at the time.


"My understanding is that little nuclear accident in Fukushima would have been worse if the wind had been traveling along the coast, as it will do tomorrow, instead out to sea as it's doing now. That could have considerably increased the cost from the current $187 billion estimate,"

Your understanding on both aspects is wrong. With respect to cost, the reason it is $187 billion is because of the dumb government policy that requires a level of radiation equal to the pre-Fukushima level, which was three times lower than that U.S. average and ten times lower than Denver, CO - a perfectly safe area.

It may be that your understanding is wrong instead

I'm just reading what the health physicists say. Who are you reading?

You're the one making the extraordinary claim.

No, you are. You just don't realize that you are in an extreme minority because you haven't been following this. Try looking up LNT model.

No, his understanding is correct. Overreaction of Japanese government has inflated the cost of accident by around two orders of magnitude in order to protect citizens from radiation levels that are too low to cause any measurable harm. See these papers for reference

If you prefer listening to reading, check this lecture by prof. Gerry Thomas who is one of the leading researchers into health effects of radiation

The problem is smart conservatives or libertarians failed to offer Japan a steeply discounted price for all the lend around Fukushima to establish luxury resorts and housing, etc, in a tax free economic zone. But by accepting say $1 for all the land and the power plant, Japan would have had only the cost of moving the Japanese out of this zone sold to conservatives/libertarians.

Trump could have redeveloped the power plant into a luxury hotel overlooking a golf course. The Japanese love golf, so Trump would get lots of wealthy Japanese golfers to pay for his investments. And he would happily hire illegal immigrants to do the remodeling work.

It could be a retirement resort. For sure the average remaining lifespan will be much less than the time needed to develop cancer due to extra radiation

Todd, I don't think the standard used changes the amount of radiation people are exposed to. But changing the amount of radiation people are exposed to does change the amount of radiation people are exposed to. If the winds had been blowing along the coast instead of out to sea at the time of the Fukushima nuclear disaster that would have increased the number of people exposed to radiation from the disaster.

@Todd K
What would happen if efforts to control cituation at Fukushima were ended?

"Could anyone get a permit in a timely way to build one today?"

That statement applies to:
Wind farms
Solar farms
Power lines
Water infrastructure
Gas pipelines
Oil pipeline
Rail lines
Public streets

I live in NH, and public streets face complex and lengthy approval process, and NH was selected as the Free State well after those rules were in effect. That was the result of We the People learning private roads are not built to be used long term or easily maintained for the service level citizens demand. In the worst cases, private roads accepted by government as public roads destroyed private property, eg, by funneling water into homes during storms. If the town hadn't accepted the road, the liability would have been the builder of the road and homes, who cleverly go bankrupt after selling everything they can before the problems become clear to their victims.

Given the inability of reputable insurers to cover very low probability but extremely high cost events, the only solution I can see for a market based approach is to require nuclear plants to have say 5% of the cost of a worst case scenario covered by private insurers and then have the owners pay 19 times that to the government to cover the cost of insurance .

But it's not worth even discussing this. No one is willing to build a merchant nuclear plants even if they don't have to pay a cent for insurance. Even if a $50 a tonne carbon price is introduced that won't help new nuclear as it will be solar and wind capacity that will be built.

Nuclear won't be built for economic reasons until its economics make sense, and that's not going to happen because the competition is too far ahead.

@Crikey - (from Australia, no doubt, given the timestamp and nym name) - good points, but keep in mind the following are subsidized by government in the USA and probably UK, AU: road travel, rail travel, airplane travel and solar power. Even penicillin, a common antibiotic mold discovered by private inventor Fleming, was industrialized (the method of making it) by state action.

More generally, externalities exist in many industries that are exploited by private industry. The theory behind this is that it's OK since private industry is more efficient than government state sponsored industry due to the Invisible Hand price discovery mechanism, which is superior to state control. Jack Ma and the former USSR think otherwise, but so far supercomputers << Invisible Hand.

Bonus trivia: due to populist pressure to 'save the environment' (stupidly) it's illegal to chop down trees, especially olive trees, in Athens, Greece (stupid since it's a crowded city, and no, trees don't 'produce oxygen necessary for life', pond scum can do that). So how to double the value of my land, bordered by public olive trees? I illegally cut them down in the dead of night (using hired help, it was hard, even with a quiet electric chain saw). Adding value, 1% style. Same way McGowan and MCI added value (exploiting the breakup of Ma Bell), same way Smith and FedEx added value (skirting the postal monopoly, arguably illegally), same way Netflix added value (exploiting an arguably weak theory of copyright violations, no time to get into it but IMO what they do is borderline illegal). That's how private industry adds value, kids, modern mixed economy style.

Ray, if you have the time, a few copper nails in the trunk will do it easier.

Trees remove pollutants from the air and provide shade, which is especially important in fighting heat-island effects in places like Athens.

Why is eager to support state power when it comes to IP, but not regulating urban land use?

...why Greece is a third world basket case. This is how they operate.

Actually not much to wonder at. It's pretty obvious Greeks are chiseling, lawless, and selfish as Ray demonstrates.

Once you factor in the costs of battery storage, am pretty sure nuclear comes out ahead. Wind and solar are great but until storage costs come down much more, they cannot completely replace all alternatives.

Nuclear's main competitor, last time I checked, was natural gas.

Ricardo, your wrote that nuclear's main competitor is natural gas, but both solar and wind are considerably cheaper than natural gas. Or at least they are here. So wouldn't that mean nuclear's main competitor is a combination of solar, wind , and gas?

Solar and wind don't provide baseload without storage.

Jim, that's a "combination of solar, wind, and gas". The gas generation provides firming.

"Coal accounts for about 75 per cent of Australia's electricity generation, followed by gas (16 per cent), hydro (5 per cent) and wind around (2 per cent)"

Solar isn't even mentioned until later: 'To date relatively high capital costs have limited widespread use of solar energy resources'

WPD has solar at 5.2% of total electric power though, so looks like there's been progress. Still, even in a location like Australia, solar isn't the obvious solution.

In Australia solar is cheaper than gas. Utility scale solar is cheaper than new coal but not cheaper than existing coal power when externalities aren't paid. Currently coal is around 67% of total generation and about 70% of non-distributed generation.

A blanket statement about the cost of wind and solar will always be wrong because a lot depends on local geography. See Table 2 of the U.S. Department of Energy's latest estimates for levelized cost without tax credits. The range for levelized cost for on-shore wind is 38.9 to 72.9 $/MWh. The range for Solar PV is 40.3 to 106.9. These huge ranges are because of local geographic variation -- some places get a lot more wind and sun than others.

By comparison, advanced nuclear is 75.1 to 81.2 -- it is competitive with solar PV. Natural gas comes in at 37.8 to 48.1.

Moreover, the sun isn't always shining and the wind isn't always blowing so, if you want wind and solar to provide 100% of a region's electricity needs, you need large battery arrays. This is expensive and prohibitively so but maybe the cost will come down in the coming decades.

What is it with batteries? The amount of battery storage required to eliminate net CO2 emissions from electricity generation is zero. Sure, now that lithium battery cells cost $100 per kilowatt-hour and are continuing to fall in price a lot of battery storage will be used, but it's not necessary.

In Australia we would use solar and wind and firm it up with our existing hydroelectric, pumped hydro, and gas capacity and we would expanded our pumped hydro storage and gas capacity. Gas generation emits CO2 but we should be able to remove that from the atmosphere and sequester long term for under 2 US cents per kilowatt-hour for 50% efficient combined cycle gas.

Now that battery storage is cheap we are going to use a lot of it -- I know a guy with battery storage on his house and an electric car -- but it's not necessary. We did think about these things and come up with plans before lithium batteries fell dramatically in price.

You answered your own question. Wind and solar are great but require either 1) batteries to store electricity or 2) fossil fuels (especially natural gas) to supplement it.

Australia may benefit from lots of hydroelectric capacity but not all countries are similarly blessed. Again, the solutions and their cost-effectiveness cannot be divorced from local geography.

Insurance also doesn't cover the high-probability but highly diffuse events of particulate air pollution harm produced by coal and oil. The difference is that we simply don't require it to do so.

I’ve always thought the test for whether the state needs to be involved is political: if the issue is big enough that it would turn the outcome of an election, then it’s political, and somehow (not sure how), it needs some degree of state support. Even if that support is effectively to say that they won’t veto the project.

My favorite business law tort case was when Nevada ranchers in the 1950s sued the federal government for compensation for setting off above-ground nuclear bombs that knocked flat their barns and their horses ran off. The feds answered that they'd taken Reasonable Man precautions. The ranchers then sued under the concept of Absolute Liability -- for example, if you keep a lion or tiger, even if you take reasonable precautions you are still liable if it eats somebody.

The courts ruled that nuclear weapons were not inherent dangerous like lions or tigers are.

The 1950s were a different time.

There's a contradiction here. Libertarians want to free up entrepreneurs to try out new reactor designs. Some of them are radically new. The trouble is that "clear workable set of safety regulations that are not excuses for anyone to stop any project" cannot be written in anticipation of every possible reactor design. Regulations will have to evolve with new reactor concepts. Doing this properly, even with a well-funded NRC, will be slow.


The complaint here is perhaps that this standard ought to apply to other sources of power generation as well, but yes

For followers of Henry Simons, Oakeshott, and Hayek, this issue is not theoretical...
"Hayek on Hayek: An Autobiographical Dialogue"

"MR. MERRIAM: What about the TVA? MR. HAYEK: There is a great deal of the TVA to which no economist in repute, and certainly not the laissez-faire people, will object. Flood control and building of dams are recognized functions of the government. I am under the impression that a good deal else has been tacked on to this scheme which need not have been done by public enterprise. But the principle of flood control and the like's being provided by the government is an entirely legitimate and a necessary function of the government. MR. MERRIAM: Even if it involved a development of hydroelectric power, as the TVA does? MR. HAYEK: That depends upon the circumstances. If the hydroelectric power really could not have been provided by private enterprise, I have no objection. MR. MERRIAM: That is not a matter of logic but of practical adjustment. MR. HAYEK: The whole question of whether you can or cannot create competitive conditions is a question of fact."

So too with nuclear power. Whether or not it's a good idea, the state will have to provide it. We're trying to provide a decent and effective government, not satisfy some ideological purity test.

Nuclear power may not need state support, rather than a hell of a lot of regulation, but if we don't do state support, some other state, probably China, France, etc, which does support nuclear power, will probably become our provider. As has been the experience of certain nations.

If that happens, you get all the downsides of state control of energy, with none of the accountability of state control being by your state for its interests. And you get what, a very small tax benefit at best?

If we want to go against state control, then that should mean actively excluding foreign state subsidised actors from our markets. A purely regulatory capitalism is viable, if it excludes foreign state owned operators. But then the libertarians don't wanna do that, even though it ends up with defacto state ownership with much less democratic accountability for the nation.

And this is true in most markets, though enforcement really only matters where it is strategically important (if China want to state subsidize basket weaving and enter Western markets then that's one thing, but if they want to do so I'm modern high value "commanding heights" industries that will help push them up to convergence on living standards?).

If the entire worldwide reinsurance industry is unwilling to price the risk at reasonable level, it simply means that nuclear power, as it is today, is not competitive with other sources of energy, and plants should not be built. Using the State to do it, it seems to me kind of killing the messenger.

If it is true that at Chernobyl only 5% of the material of the core of one of the four reactors was released in the atmosphere, and there was the real possibility that a much bigger disaster would have made large swaths of Europe inhabitable for hundreds of years, as I recently read on a book on the incident, this type of power plants should not be built. I do not refer to the specific Chernobyl design, but any other that could conceivably have such a catastrophic outcome.

Maybe in the future thorium-based reaction or drastically smaller designs will become viable and the market will deem them insurable. Until then, nuclear power is simply too much a risk.

Note, by the way, that I am not mentioning the problem of nuclear waste. It is not obvious how to insure a risk, however small, that last ten thousands of years.

"and there was the real possibility that a much bigger disaster would have made large swaths of Europe inhabitable for hundreds of years, as I recently read on a book on the incident,"

The book is wrong. Is it the one written by an historian within the last couple of years?

It is “Chernobyl” by Serhii Plokhy.

My understanding is that is considered a serious book. It certainly seems well researched.

Basically, using graphite in a reactor core to moderate fission is the sort of bone headed engineering decision that nuclear supporters like to argue never happens. Zirconium is a bit better than carbon, but as Fukushima demonstrated, using zirconium as fuel element cladding is also flawed. From wikipedia - "It is estimated that the hot zirconium fuel cladding-water reaction in Reactors 1–3 produced 800–1,000 kilograms (1,800–2,200 lb) of hydrogen gas each. The pressurized gas was vented out of the reactor pressure vessel where it mixed with the ambient air, and eventually reached explosive concentration limits in Units 1 and 3. Due to piping connections between Units 3 and 4, or alternatively from the same reaction occurring in the spent fuel pool in Unit 4 itself, Unit 4 also filled with hydrogen, resulting in an explosion. In each case, the hydrogen-air explosions occurred at the top of each unit, that was in their upper secondary containment buildings."

Making it much harder to dismiss reactor containment explosions as being solely due to lax Soviet safety standards.

The potential largest catastrophe involving Chernobyl in an unlikely absolute worst case scenario would have had all four reactors burning. Basically, RBMK type reactors can create a plume of radioactive smoke that results from the graphite burning, thus spreading the fallout over a much greater area and over a greater distance.

"It is “Chernobyl” by Serhii Plokhy.
My understanding is that is considered a serious book. It certainly seems well researched."

Plokhy is an historian who doesn't understand radiation physics and the shift in understanding of risks over time.

The fallout from Chernobyl did spread all over Europe but was not at all a risk to human health. What was a risk was highly contaminated milk that children drank after cows ate contaminated grass. The milk wasn't taken off the market so a few thousand got thyroid cancer, which had a 98% cure rate,, now over 99%. Unfortunately, a few children died because it wasn't caught in Ukraine in the late 80s.

Todd K, I thought that the majority of childhood thyroid cancers caused by nuclear accidents is caused by radioactive iodine in the airborne steam/smoke rather than accumulated radiation in the food supply (like heavy metals in large fish/sharks). Maybe its a combination of the two.

Regardless, low-cost potassium iodine pills counteract the radioactive iodine which has a very short half-life. The only downside to the widespread distribution of iodine pills in the hours/days after an accident is the potential for irrational panic in the population. If you don't treat the children in the days after the accident, the inevitable increase in thyroid cancers are almost perfectly treatable. The psychological impact is much more significant in terms of long term "deaths of despair". Being treated for childhood thyroid cancer is not a good thing despite its near perfect survival rates.

I think I've made the mistake of saying nuclear accidents have very low impact on human "health" where it is probably more accurate to say that nuclear accidents have a very low impact on human mortality, since the number of children who contracted thyroid cancer due to the Chernobyl accident was very high (though treatable and preventable with the timely distribution of iodine pills).

Around 4,000 children got thyroid cancer due to the contaminated milk, or 0.5% of Ukrainian children. That would be impossible today as shown in Japan where milk from the area was not allowed to be sold. Yet the radiation in that milk was far lower than near Chernobyl. A scientist estimated that someone would have to drink two glasses of milk a day for 120 years (87,000 glasses) in order to get a very small increase in risk for cancer.

I checked the WHO report and it says:

Radioactive iodine was deposited in pastures eaten by cows who then concentrated it in their milk which was subsequently drunk by children. This was further exacerbated by a general iodine deficiency in the local diet causing more of the radioactive iodine to be accumulated in the thyroid. Since radioactive iodine is short lived, if people had stopped giving locally supplied contaminated milk to children for a few months following the accident, it is likely that most of the increase in radiation-induced thyroid cancer would not have resulted.

The half life of radioactive iodine is 8 days. I didn't realize that the Chernobyl case was this specific: rural communities within the fallout zone that raise and milk their own cows and feed this milk to iodine deficient children in the days/weeks after the accident.

Distributing potassium iodine pills is probably overcautious in most nation-states with a market oriented food supply. Good to know, thanks.

The 1982 US Nuclear Waste Policy Act "committed the DoE to begin taking used fuel from nuclear utilities from 1998, for final disposal in a federal facility - namely the Yucca Mountain repository."

Utilities were charged a fee to fund this. In 2009 Yucca Mountain was suspended (my recollection is that it was done by Obama at least in part as a political favor to Harry Reid, then running for re-election to the Senate).

In 2014, after collecting about $30 billion, and with no depository in sight, the Federal government finally stopped collecting this fee.

As a result, instead of being in Yucca Mountain, utility nuclear wastes are in dozens of "temporary" utility storage facilities scattered around the country. It's hard to make the case that however imperfect it may be as a 10,000 year solution, Yucca Mountain would be worse than this.

This provides an interesting cautionary tale of the Federal government's total failure to actually solve a definite, concrete, real-world problem.

Below are the 15 countries that exported the highest dollar value worth of electricity during 2018.

France: US$4.2 billion (12.2% of total electricity exports)
Germany: $3.8 billion (11%)
Canada: $2.3 billion (6.6%)
Switzerland: $2.1 billion (6.2%) ....

The electrical market is somewhat complex in terms of valuing amounts, whether in straightforward Mwh quantities or in more complex Mwh transactions where the value can be different depending on a number of factors.

Those countries are an interesting contrast to a country that has active plans to build new nuclear reactors - "The four high-voltage power cables linking the UK to Europe’s energy markets imported a sixth more electricity than the year before, after a new interconnector opened in January.

In total, European electricity imports made up almost 7% of the UK’s total demand, and the government hopes to increase imports to about 20% by 2025.' Recognizing that an electrical grid works differently than a physical pipeline, the UK is basically importing electricity from France, Germany and Switzerland according to that information from September 2019.

And how is the UK reactor building going? This is also from September 2019 - "The cost of building the UK’s first new nuclear power plant in a generation has risen by up to £2.9bn and the total bill could be more than £22bn.

EDF Energy said the construction cost for Hinkley Point C in Somerset had climbed by between £1.9bn to £2.9bn from the company’s last estimates and is running the risk of further delays.

As a consequence, the total cost has risen from £19.5bn to between £21.5bn and £22.5bn."

Private industry works the same way, regarding "hurry". It's called "first to market" and software companies routinely ship buggy software with the expectation once they get market share, they'll fix the bugs. In the absence of strong IP protection, i.e., government, that's what happens.

Bonus trivia: the Bank of England paper, by Paul Schemlzing, that posits negative real returns in the future, that TC cited a yesterday is really good, easy to understand, no math. The author posits that the reason real returns will be negative (extrapolating from 500 years of data showing a clear downward trend) is that politicians, backed by the 99%, will expropriate, NYC rent control style, wealth from the 1%. If so, essentially it will be a victory for communism and society 'stability' or 'equality', at the expense of capitalism and progress. But then again, the same thing has happened since the beginning of time to inventors (they get well less than 5% of the market value of their inventions, probably less than 0.001% for pioneering inventions). Yet inventors keep inventing (pace the counterfactual, which is hard to prove, i.e., had there been a better patent system, by now we'd have flying cars). Will savers keep saving, even given financial repression and confiscation? Sadly, if JP savers are typical, the answer seems to be yes. Hence, carpe diem and live for the moment, leave nothing for your kids?!

First-mover advantage matters a lot for software and websites and apps because of network effects. But it doesn't apply to building bridges or nuclear power plants or cars or whatever. That was just another off-topic rant about patents.

First mover gets to be first to lobby congress or otherwise capture regulation, locking out better ideas.

It's illegal for government agencies including the DOD to lobby Congress.

The failure of government to develop same nuclear power generators is not due to reactor developers lobbying Congress to have power companies build 200 nuclear bomb material factories.

The Navy, the only agency to use nuclear power reactors for producing only power, started developing reactors that purely produced power, but Nixon shutdown the Navy work as too costly.

The most ambitious, private effort to build a totally safe, near zero waste, pure nucllear power generating reactor has been shutdown by Trump by claiming Gates partnering with China on totally safe nuclear power generation is a threat to US national security.

While Terrapower has designed an actively managed reactor that turns traveling wave into standing wave, its clearly possible for a true traveling wave reactor to be built that by using a mix of metals including depleted uranium or plain thorium, plus consumable moderators, and a small seed of highly fissile material to produce a reactor that operates for decades generating heat and electric power for factories, housing, etc which would be no more dangerous than the same quantity of mercury or lead plus a quantity of fertilizer and fuel oil to vaporize and spread these toxic metals over a large area as aerosols.

Conservatives will not invest in safe power generation, preferring to spread toxic metal everywhere while arguing nuclear power is way too dangerous to be sold and deployed in every corner of the world.

If nuclear power is safe, then not only Irzn and North Korea should be encouraged to build nuclear power plants, but also Somalia, Venezuela, Libya, Afghanistan, Mexico, Chile, ...

In fact, if Guatemala, Honduras, El Salvador had lots of small cheap nuclear reactors, these countries would be so prosperous from cheap energy there would be no poverty and crime driving migration to the US.

Right? Do conservatives actually believe cheap energy by nuclear power without government regulation is the path to high growth and the end of poverty and crime?

Software also tends toward winner-take-all because its marginal cost is essentially zero. There are economies of scale with nuclear power, but nuclear electric plants tend to be large and therefore there are not that many of them.

Let us be blunt: nuclear energy for civilian applications is a terrible idea whose time has passed. It is an awful solution in search of a problem. The world's coal and oil reserves are enough to power the economy for a long, long time.

Let markets be markets; and what markets tell us about nuclear power is that the cost (overruns), (un)reliability, potential (catastrophic) liability, and climate change (flooding, fires, etc.) make nuclear power a relatively poor choice for the industry. Shout it from the rooftops: markets say no to the nuclear option.

I would have thought you'd be the first to point out that oil and coal aren't required to pay for their externalities.

The World Health Organization says that about 750,000 people die per year due to coal power. Tens of millions more have health issues from minor to grave.

If coal power had to cover the externality cost, or if if coal-related illness could be traced back to individual providers, coal would probably be sued/taxed out of existence.

Nuclear power is demonstrably the safest, cleanest power source we have - by orders of magnitude. It isn't close.

Anti-nuclear activists and regulators have driven up the cost of nuclear through constant lawfare - injunctions, work stoppages, new regulations, protests, etc. Their exaggerations of the risks of nuclear power have created NIMBYism that makes it very hard and expensive to get new nuclear permits.

Nuclear power plant construction requires a huge amount of up-front capital, making such projects very sensitive to time delays. A nuclear power plant in the west can be stalled for decades. Then the activists who did the stalling point out that nuclear is now very expensive, and use the expense to justify not building them.

In China, new nuclear plants are being constructed in about five years and for about $4 billion dollars. In the west, if the projects finish at all they cost four or five times as much money,

Back before we got crazy and started blocking nuclear power, France built out and entire nuclear electricity system, and gets 70% of its electricity from nuclear. It is also the largest exporter of electricity in Europe, and has one of the lowest prices for electricity. All without emitting CO2 or any major accidents.

The Price Anderson problem is worse than that.

Since liability is limited or capped, utilities have the incentive to operate their plants beyond what was the expected useful life.

The liability limit should have been capped at the useful life of the plant.

By the way, headline should read, instead of state support for nuclear power, the following:

"Nuclear Industry Support for Nuclear Power"

"A 2016 Gallup poll of the American public revealed that public support for nuclear energy in the United States was at a record low of 44%, with the majority (54%) of respondents saying that they oppose nuclear energy." From Wiki

What do you think the Venn diagram looks like for :

Do you believe climate change is a serious problem that needs to be addressed?


Do you support nuclear energy?

What a joke.

If you view the world as either or, then you, not the diagram, have a problem because you have framed it as the only alternative.

The set of alternatives is much larger. And, with a different or low risk profile. And, some of the alternatives do not require electrical wires running through dry forests. Solar in the rural areas or near fire risks. Distributed power systems mean that a failure of one node will not cut off an entire area, like Northern California.

You have to not only think differently, but think.

Storage costs prevent that approach from being a viable alternative. Otherwise it would be standard to install that in rural construction today.

I assume that a customer is already being served by a utility, so the question is adding incremental load. Any load reduction from alternatives reduces or eliminates the need for further construction, including nuclear.

In other words, we are talking about marginal or incremental to an existing served customer base. Taking off that load from the utility reduces the need to construct additional capacity at the utility, or, if there is additional load, it can be generated by alternatives along with reduction of load at the customer site.

This is just not correct. You need to understand how the power grid works. When you add enough intermittent power that it cuts into the 'baseload' range, and therefore you cut back on baseload power (large coal plants, for example), you then have to bring in more 'peaking' power, or load-following power. These power sources are generally not as efficient, and running baseload plants at a lower duty cycle also lowers their efficiency.

Then you have the problem of seasonality. In Canada, we only get about 25% of our solar power in winter than we get in summer. So we either have to retain 75% of our baseload capacity for winter, or overbuild solar by a factor of four and then try to sell off the excess power in summer, if anyone will buy it.

For these reasons, building out solar is a lot more expensive than the cost of the solar hardware alone, which is why jurisdictions that have attempted to move to large-scale solar and wind have seen their energy prices skyrocket.

And solar isn't all that effective for reducing greenhouse gases. Germany can produce 100% of its power from renewables on a bright summer day, but in an annual basis only gets about 6% of its power from solar. And after some $200 billion investment in renewable energy and creating the highest power prices in Europe, Germany didn't manage to lower its CO2 emissions by as much as the U.S. did by simply transitioning to more natural gas, and shutting down their nuclear plants in a panic eliminated the modest gains in CO2 reduction they had achieved.

+1, excellent post

However, if battery prices keep dropping that will eventually mitigate the intermittency of solar/wind. At least mitigate it enough to cover the costs of natural gas peaking plants.

So, is there anything that could usefully be done with seasonally very cheap electricity? Basically you need something where the capital costs aren't too high (so it's not too painful to let your capital stand idle when electricity is expensive), and where electricity is the major cost.

Bitcoin mining? Maybe it will become seasonal?

Why is that a joke? There are many solutions to climate change that most people would regard as too much even if they think climate change is a serious problem, such as dramatically reducing production or having a one-child policy in countries with high per-capita emissions. I’m no expert on nuclear, but it does seem like nuclear has significant risks as seen from Chernobyl and Fukushima. Those risks may not be worth the emissions savings. At a minimum, they shouldn’t be subsidized by the government.

Or geoengineering by spraying mists of sulfuric acid.

It looks like a joke because the human impacts of massive production cuts, or one-child policies, or climate change, are many orders of magnitude larger than the human impacts of once-a-decade reactor meltdowns.

"Why is that a joke? There are many solutions to climate change that most people would regard as too much even if they think climate change is a serious problem"

It's a joke because many AGW warriors claim that civilization will be destroyed if we don't stop it. Clearly nuclear power isn't that dangerous. The fact that they also are against nuclear power tell any perceptive person that they don't actually believe that AGW will end or even dramatically harm civilization.

I don't understand citing a set of fairly reasonable legal rules concerning liability as evidence of government support. Whatever the tort liability rules are, they are set by the government. There isn't a libertarian answer to questions like "Should there be strict liability, or only liability for negligence?" or "What should the statute of limitations be?"

The same logic would conclude government support for gay marriage with rules excluding gay marriage in place. After all, there are laws in place and they pertain to gay marriage.

Interesting to compare this with the recent post by Tabarrok citing the "cost" of coal powered energy in Germany versus nuclear. That article did not address the unique liability position of nuclear operators which typically combines strict liability (as opposed to liability based on negligence) and monetary limits on liability claims (à la Price-Anderson). The nuclear industry also benefits from international conventions that include these principles. How much of that "cost", borne by taxpayers, was baked into that comparison?

FYI - As written, the third bullet from Wikipedia is not accurate. If that were the case, any person with any injury in the United States could sue any nuclear power plant even if the injury is totally unrelated to such plant. It’s probably referring to a strict liability standard, which still requires proof of causation.

The concept of punitive damages seems like a form of legal theft and it seems consistent with free market principles to limit it. If you want to punish a business, you should boycott it and convince others to do the same. But the key here is that the boycott also hurts the boycotter, so it is a sincere signal of your displeasure as you are willing to bear costs to enforce it. People should not be rewarded for punishing others.

For how long will our government keep pushing nuclear energy? I am sick and tired of it. No one asked it, no one wants it nearby and no one wants to pay for it.

Do it like the French.
Cede a small remote area of the USA to France (near major existing transmission lines). Kinda like charter cities - but instead of avoiding third world sh!!hole corruption, you avoid US legal chaos and cost disease.

A good place would be the along the NY / Quebec border where existing hydropower lines exist. That area, economically the east Germany of America, could use the development.

This is the France that is cutting the percentage of electricity it gets from nuclear from 72% to 50% over the next 10-15 years? If you ceded part of the US to them they would build solar and wind capacity rather than nuclear going by their current behavior.

Tyler concludes: "all scenarios are by definition somewhat governmental."

Because America's Federal government was keen to promote "safe and friendly" nuclear power within the post-WWII energy sector, and since in our era nuclear power sites require Federal-level security protocols (including, of late, physical security measures: nuclear power plants might soon require at least as much physical security for operation as any underground nuclear missile silo), why not COMPLETELY Federalize nuclear power production in the US . . . FOR Federal government power consumption exclusively?

Military bases at the site of each operational nuclear site? More or less, yes. Let nuclear power generate energy for the Pentagon and its domestic bases, take them all off of "civilian" power grids of coal-fired plants, hydroelectric, geothermal, et cetera. Any residual electricity can power other (exclusively) Federal functions or can be sold to the private sector energy industry.

This way, the Feds will OWN nuclear energy perhaps with the sufficient incentives to see that it works in practice instead of in theory alone.


That's not such a bad idea. Overtime the government may even build up some practical information that can be made public domain and help private suppliers cut costs. That might end up being like how the internet got started, a series of computer protocol networks some government nerds were working on that eventually proved to have practical civilian use.

Let's put the nuclear reactors in national parks. These are big chunks of land already forbidden to human settlement. If a reactor makes a mess, the mess simply excludes a section of the park from visitation for a century. The net impact of such a mess on wildlife is probably positive, because the greatest threat to wildlife is people.

That may be the best example ever of a policy that's both somewhat sensible and also utterly politically unworkable.

Edward, the US military is going into generating electricity themselves and becoming more independent of the grid and/or stocks of fuels but with solar. A number of military bases have installed large arrays and they apparently plan to have 3 gigawatts in total by 2025. I don't know how it compares with their current energy use, but that is a lot.

If some people can have a 50-90 trillion dollar "green new deal", I don't think there is anything wrong with libertarians getting their own wishlist of things they want the government to do for energy. I'm not a libertarian myself, but here is my wishlist for nuclear. Right now we spend about 800 million on nuclear research. I wouldn't be against upping that a bit.

In terms of more direct support, the best thing to do now would be to have the Federal government make it easier to build by reducing the regulations and licensing burden. Special tax incentives wouldn't hurt either. The most important regulation we do need to keep is the one Tyler mentioned, imposing certain types of insurance costs on the power plants. Subsidizing those wouldn't be the worst thing, although I would prefer a phase out where after a time more and more costs would fall on the plant.

I also think that land grants could be a good idea. Find some safe places(no fault lines) and give away the public land for "free". It's how we built a lot of the great railroads and universities, I don't see why we can't do it again. Other than that I think the government may have to assist in providing some on site security.

The South Koreans build nuclear power plants at half the capital cost of the west. If you take the Levelized Cost of a Energy from the EIA and alter US numbers accordingly, you find that nuclear would be only slightly more expensive than advanced combine cycle natural gas and solar, but with a much higher reliability and predictability in production and cost.

Whether the reason is better South Korean business practices or a more favorable regulatory environment or both, I cannot say for sure. I have heard both.

"More generally, I am not sure which level or kind of liability should be associated with “the free market,” especially when the risks in question are small, arguably ambiguous, but in the negative scenarios involve very very high costs."

Does this uncertainty as to pricing and allocation of catastrophic risk also extend to the pricing or allocation of tail risk associated with financial intermediation (e.g., bailouts)?

The WHO estimates about 4 million a year die from indoor cooking with solid fuel - primarily wood or other biomass, and dung. This of course is due to lack of electrical power for cooking.

Coal or nuclear power generation are not the only risk factors.

>So the odds are that without a Price-Anderson Act America’s nuclear industry would have shut down some time ago, with no real chance of a return.

You are misreading the purpose of this act... its point was to ensure that there would be a deep pocketed defendant in the event of an accident, not to limit liability (e.g., "Companies are expressly forbidden to defend any action for damages on the grounds that an incident was not their fault")

Without the law, the industry would just rely on ordinary corporate law to limit their liability ala how the mining industry handles it. That is, each power station would be its own company. An accident would only wipe out the equity in that corp (~$2-3 billion). And, as a result, most of the damage would de facto fall on the government.

Regarding the liability issue, the situation is extremely heterogeneous.

In France until Fukushima, EDF’s liability used to be under $100 million (with an m). I think it has been upgraded to around $1 billion.

In Germany, the nuclear operator had unlimited liability.

It’s hard to imagine anything close to $12B in coverage available on the market...
The main nuclear insurer in the US is Nuclear Energy Insurance Limited. Their AM Best report cites $4.5B in policyholder surplus and says they manage capital to pay for two limits losses. That’s $2.25B and would presumably need to cover the property damage to the plant and outage costs along with third party liability. Other insurers could provide some cover, but likely in <$100M tranches. The market for 1000 square mile exclusion zone isn’t there. It’s similar to terrorism.
Either the government or those affected will be stuck with the final bill.

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