]]]]]]]]]]]]] NUCLEAR POWER ECONOMY [[[[[[[[[[[[[[[[[[[[[[ [Five years old, and not a thing has changed!] Dear Dr. Beckmann: 05/24/83 ...I entirely agree with your statements condemning the primitive critics of nuclear technology. But you are not critical enough about the costs of nuclear plants. The nuclear industry allowed an explosion of their costs, and unless it invents a containment to this financial explosion, it will face difficult times. Sincerely, L.S., Zuerich, Switzerland * * * Dear Dr Beckmann: I stopped subscribing to your newsletter because you never say a word against the nuclear industry pricing itself out of the market... I have no quarrel with you over nuclear safety, and I agree that nuclear is far safer than any other source, but if the nuclear industry cannot keep its prices down it deserves to perish. They charge billions for what used to cost four times less -- why rescue their inefficiency? Sincerely, J.P.G., Alexandria, Va. * * * Dear Mr. S. and Mr. G.: The nuclear industry has many faults, especially servility and cowardice when faced by noisy political opponents. But it is fairly easy to show that the steep rise in reactor costs -- far steeper than inflation -- is not caused by the industry. Indeed, the manufacturers of nuclear reactors (General Electric, Westinghouse, Babcock & Wilcox, Combustion Engineering) are the same companies and practically the same engineers as those who built the power plants in the sixties and early seventies at far lower cost, and those plants are now running cheaply -- at half the cost of coal-fired plants for Commonwealth Edison of Illinois, for example. Obviously, then, it is not the industry that has changed. What has caused the steep rise is two closely interconnected factors: the witch hunt against nuclear power, and government regula- tion (often retroactive) seeking to cater to it. The first is directly at play when the nuclear saboteurs play their legalistic delaying games. Interest and other costs amount (in California) to $1 million a day. Even more destructive is the cost of complying with the retroactive and ever changing requirements of the NRC, which are in some cases counterproductive (when they LOWER the safety of the plant, see reference below), and in ALL cases damage health and safety in the sense that even without any of these require- ments nuclear reactors are safer than fossil-fired or hydro plants, so that the delay causes unnecessary health effects by these sources. The absurdity of this situation and the NRC's reckless posturing as guar- dians of safety are of course consequences of the witch hunt. It is interesting that even so, nuclear power is still competi- tive with coal (and far cheaper than oil) in the US. In Germany, it costs half as much, and in virtually coal-free Switzerland, as you know better than I, its cost is an even smaller fraction of all alternatives except hydro. However, a utility's decision on what kind of plant to build (right now they build few or none of any kind) is no longer based on economics alone. It has to consider the uncertainties of government regulation and the prospects of being targets of a witch hunt. If this were not so, and the price of the product were determined only by a free market, I would see no more reason to rescue an uneconomical product than you do. Sincerely, P.B. Reference (not yet out, but well worth waiting for): "Nuclear Power Economics and Prospects," by B.L. Cohen, a chapter in the forthcoming book "Energy in a Free Market Environment," sponsored by the Heritage Foundation. Should be out by the end of 1983. * * * [May 1988: It came out in 1984 -- Universe Books, 381 Park Ave. South, New York, NY 10016.]
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