Michael Giberson
At Master Resource, Daren Bakst and Carlo Stagnaro take apart a report by the North Carolina Waste Awareness & Reduction Network (NC WARN) that concluded that solar power was now cheaper than nuclear power. The short version of the story is that NC WARN’s analysis treated federal and state subsidies as reducing the cost of solar power, while not similarly crediting nuclear power with cost reductions due to subsidies.
The report’s “trend” of falling solar power costs may be mostly a trend of increased taxpayer subsidy, with a bit of technological advance thrown in as well.
The original NC WARN report was prominently and favorably discussed in a New York Times “special report” article published in July 2010, “Nuclear loses cost advantage,” but the article now features an editorial note explaining that the article did not present a full and balanced view of the issue. So far no NYT article reports the analysis of Bakst and Stagnaro.
As an aside, last week the New York Times ran a (real, actually reported) article on the slowed momentum for building new reactors – in general it looks like a combination of reduced power demand due to the recession and uncertainty surrounding federal loan guarantees is causing some utilities to hold back. Some utilities are holding back, but not all:
Two nuclear projects that have gone forward, in Georgia and South Carolina, are in states where the utilities building them also distribute the electricity and operate under traditional regulatory rules that virtually guarantee them a financial return: Whatever the companies spend to generate power, the customers will pay for, unless regulators decide the expenses were not “prudent.” That regulatory compact is so strong that the South Carolina project, on the site of the existing V. C. Summer reactor, has begun work without a loan guarantee.
The GA and SC jurisdictions also allow the utilities concurrent recovery of financing costs during plant construction, as opposed to deferring them as AFUDC for recovery during the plant’s operating life. This lowers risk and helps keep the cost of capital from rising as the deferred income accumulates, but AARP and others decry the intergenerational issues that result.
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