The West’s nuclear industry has embarked on its biggest public relations push ever in a bid to stay relevant to policymakers increasingly focused on renewables. 

Recent weeks have seen a coordinated campaign by two of the sector’s top agencies to claw back support for a technology that is struggling to remain economically viable and is in danger of being sidelined in discussions over future energy pathways in Europe and North America. 

In the U.S., the Nuclear Energy Institute (NEI) kicked off proceedings in an apparently low-key fashion. With little fanfare, the institute’s website had a facelift in early March, dispensing with its former staid design and adopting a more modern look with bold type and plenty of video. 

In the place of headlines about developments in nuclear technology, the NEI’s site now plays inspirational messages over images of children, cityscapes and electric cars. “Carbon-free. Available 24/7. Powering communities,” it says. “Vital to our clean energy future.”

Soon after, the NEI began talking up its annual briefing for the financial community, which, for the first time, was being streamed live on Facebook. 

Ominously for an industry where new developments always seem plagued with delays, the livestreaming event started late due to technical problems. 

Once underway, NEI president and CEO Maria Korsnick lost no time in stating the case for ongoing nuclear energy support. “Nuclear energy produces no air emissions,” she said.

“We operate with months or years of fuel already on site, so we are invulnerable to problems with pipelines, barges or railroads," said Korsnick. "We run well in cold weather and hot weather, and we either ride through hurricanes, or we’re ready as soon as the grid gets restarted.”

She then unveiled a national nuclear energy strategy that involves preserving today’s 99-strong U.S. fleet, improving plant efficiency, developing new technologies and, crucially, fighting for what she called “a level playing field to thrive internationally.”

The consequences of not preserving nuclear power in the U.S. would include thousands of job losses, as well as the loss of 120 million megawatt-hours of carbon-free generation a year, she said, along with greater risks to grid stability. 

OECD's nuclear group weighs in

Less than 24 hours after the NEI event, the Nuclear Energy Agency of the Organization for Economic Co-Operation and Development (OECD) took the helm of the industry’s communications machine with the launch of a major report. 

The Full Costs of Electricity Provision was unveiled by the NEA’s director-general, William D. Magwood IV, and senior economist, Jan Horst Keppler, along with NEI’s senior director of policy development, Matthew Crozat, and nuclear advocate Kirsty Gogan.

“This is a very comprehensive study that covers not just nuclear energy but renewables, fossil fuel sources, the broad range of energy technologies, so we can have a full comparison and calculation of the cost of running electricity,” said Magwood. 

A glance through the 214-page document shows it to be a serious attempt by the NEA to reframe the parameters of current energy policy discussions and head off one of two major threats facing the sector. 

While nobody disputes nuclear power’s ability to deliver significant quantities of baseload, carbon-free energy, the industry has long wrestled with safety concerns and more recently found itself outflanked by the economics of Western electricity markets. 

It is likely that the nuclear sector has learned to take safety accusations in its stride. For years, advocates have been claiming that nuclear power is safer than any other form of electricity generation (although Greenpeace disputes this). 

Those arguments didn’t stop nations such as Germany or Italy from turning against nuclear in the wake of the Fukushima Daiichi disaster, however. 

And more recently, nuclear plant operators in Europe and, particularly, the U.S. have been worrying over an even bigger concern: cost. In markets such as the U.K., new nuclear is looking increasingly pricey next to renewables. 

Last September, for instance, offshore wind — theoretically one of the most expensive forms of mainstream renewable energy generation — undercut the strike price for the U.K.’s Hinkley Point C project by almost 38 percent.

Given that offshore wind is expected to continue falling in price and is being built at the moment, unlike nuclear, the economic case for new reactors in the U.K. appears to diminish by the day, even though the government has restated its commitment to a diverse energy mix.  

Similar challenges face nuclear elsewhere in Western Europe. Only two commercial nuclear reactors, Flamanville 3 and Olkiluoto 3, are under construction in the European Union. Both are massively delayed and over budget. But the situation in the U.S. is even worse. 

In America it is now no longer economically viable to keep existing plants running, let alone build new ones. 

Valuing externalities

The dire situation facing reactors in U.S. markets flooded with cheap gas and renewables is prompting desperate measures from plant owners in states such as Minnesota and New Jersey. And the NEA report is designed to force a rethink in how these markets are set up.

It sets the scene for including numerous externalities, such as grid system integration, climate change and air pollution costs, into the calculation of energy pricing. 

“The production and consumption of electricity is not only a major economic issue but also a large contributor to adverse impacts on human health, longevity and the natural environment,” it notes.

Its main finding is that the external costs of the normal operations of electricity generation exceed the costs of other phases of the life cycle of electricity generation, as well as the costs of major accidents, “by at least one order of magnitude.”

Although it stops short of blatantly offering up nuclear as the silver bullet for reducing these problems, the report highlights air pollution, climate change and system integration as the largest un-internalized costs present in electricity generation. 

This finding is fortuitous for the nuclear industry, since under normal operating conditions reactors are non-polluting, carbon-free and helpful in ensuring grid stability. 

The problem is that the NEA’s clear interest in promoting nuclear energy somewhat taints the impartiality of the report, opening it up to criticism from observers.

David Timmons, associate professor of economics at the University of Massachusetts-Boston, noted that the NEA report uses different vertical scales to show plant-level and grid-level costs, seemingly exacerbating the latter.  

“My own work suggests that these grid costs can only be estimated at a system level, and not for individual energy sources,” he said. 

“For example, the cost of accommodating wind and the cost of accommodating solar is not the same as the cost of accommodating wind and solar, because the sources may be complementary and because the same infrastructure may be used to accommodate both.”

A one-sided interpretation?

Amory Lovins, the notoriously anti-nuclear Rocky Mountain Institute (RMI) chief scientist and co-founder, pulled no punches over the NEA’s attempt to calculate all-in energy costs. A large body of literature, with widely varying quality and independence, has already done this, he said. 

“NEA endorses a one-sided interpretation of that literature,” he said. “The workshop that framed and steered this report was co-chaired by two well-known nuclear advocates, making NEA an extension and official endorser of the nuclear industry's main advocacy group.”

He offered up a long list of potential flaws in the report, including selective citations, assumed rather than observed technology costs, no analysis of financing cost, no mention of risk premiums or construction times, the use of old pricing data, and factually incorrect claims. 

Some points of the analysis are largely or wholly correct, but most sections and the broad conclusions are not, he told GTM. “They will be credible only to the credulous or already-committed,” he said. 

“The report does not usefully advance prior understanding of power-system externalities. It is marred by thinly veiled appeals for policymakers to protect nuclear from technology-neutral market competition. It does not merit, and I do not expect it to have, significant influence.”

If so, then the report could be a missed opportunity by the OECD. Few would doubt that society could benefit from a full and honest appraisal of the real costs of electricity generation. 

And aside from organizations such as Greenpeace and RMI, there is a rising awareness among certain environmentalists that nuclear power may be a necessary tool in the struggle to decarbonize the grid. 

Renewables may need nukes

The noted U.K. environmental campaigner George Monbiot, for example, came out in favor of nuclear energy after the Fukushima accident. 

“The energy source to which most economies will revert if they shut down their nuclear plants is not wood, water, wind or sun, but fossil fuel,” he wrote in The Guardian

“On every measure (climate change, mining impact, local pollution, industrial injury and death, even radioactive discharges), coal is 100 times worse than nuclear power," he said.

Recent research seems to confirm that those who see emissions reduction as the most pressing challenge facing the energy system might want to keep nukes running, for a bit longer at least. 

This month, for example, The Brattle Group claimed that the closure of three FirstEnergy nuclear plants, in Pennsylvania and Ohio, would wipe out more zero-carbon generation than that achieved by all the mid-Atlantic region’s wind and solar power put together. 

Management consultancy ScottMadden reached a similar conclusion in a separate study. 

In the U.S., it said, “most of the progress made to date through renewables is at significant risk due to the loss or potential loss of more than 228,000 gigawatt-hours of nuclear carbon-free generation.”

The problem with losing nuclear plants is that once they shut down, they are unlikely ever to open again, said ScottMadden. 

“While one might argue that in the long run this nuclear hole may be filled with renewables and other evolving clean technologies, in the near term it is certain that a rapid and deep carbon reduction will require these nuclear assets,” the report said.