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No Nukes, Mo Problems.

A new paper reveals the financial and environmental costs of Germany’s nuclear power phaseout.

I spent the first fifteen years of my life in Northern Bavaria, right next to the wall facing East Germany and Czechoslovakia. The air quality was reminiscent of what you encounter in some of the worst polluted places on earth these days. Snow would fall, two days later it was brown and black from the particulate pollution spewing from coal fired power plants on the other side of the wall, and the cars zooming by at 120 mph powered by leaded high octane gasoline in the West.

Part of Germany’s strategy to fight air pollution, while providing a reliable supply of electricity was to invest heavily in nuclear power plants. While I was growing up, there was a lively debate around the safety of these reactors and how to deal with the spent fuel storage issue. Much of this debate reached mainstage when the Chernobyl reactor exploded in 1986 and most of us schoolkids were not allowed to go outside and play in the rain (we usually did that because sunshine is rare in Northern Bavaria). Until 2011, Germany generated about one quarter of its electricity from nuclear power. Then Fukushima happened. And Germany decided to retire its nuclear fleet.

Today the number of reactors is down from its peak of 17 to 7 reactors, which are all slated to be shut down in the next three years. Today Germany generates 12% of its power from nuclear and north of 40% using coal. My fellow Germans are at the same time heavily investing in the renewable future,  rolling out solar, wind, and biofuels. Under the new European mandate to be carbon free by 2050, this is going to be interesting as nuclear power is, well, carbon free. So the question many of us had was what the current consequences of the nuclear shut down have been on the indicators we care about – air pollution and carbon emissions.

Enter stage left – a new paper by our fabulous graduate student Stephen Jarvis (who will be on the market next year), Olivier Deschenes (UCSB) and recent Energy Institute visitor Akshaya Jha. They do something really clever to estimate the effect of the nuclear shutdowns.

What we need to know is what the remaining power plant fleet would have done if the nuclear power plants had not been phased out. We call this a counterfactual. Sort of like a parallel universe (which we never see in reality. Beam me up Scotty!). They employ a machine learning algorithm to study changing patterns of production in response to individual plant shutdowns, using hourly electricity load data, and then use those patterns to simulate a system with the nukes shut down. (Yes, for you critical super nerds, that is an oversimplification, but this is a blog and you can read the paper here.)

This is one of these beautiful papers that asks a hugely policy-relevant question, uses cutting-edge methods and teaches us 5 important things:

  • The shutdown worked. Production from nuclear power plants went down drastically. Duh. But it’s always good to check that your algorithm works and your data are properly read into your ‘puter.
  • The decrease in nuclear production was offset by production from coal- and gas-powered plants in Germany as well imports from its European neighbors.
  • The cost of electricity generation went up due to the phaseout, resulting in higher prices. This is not surprising, given that the marginal cost of generation for nukes is very low (they cost a pretty penny to build though).
  • The most important finding is that emissions of (often not very salient) local (think NOx, SOx and other crud) and global (think CO2) pollutants went up quite a bit. If you translate the increased emissions into damages in dollars, that number is $12 billion a year (about $150 per German).
  • The benefits in terms of lower accident risk (which is very salient, since the idea of a nuclear accident is very scary) and reductions in spent fuel storage costs come nowhere near the $12 billion dollars in damages.

So where is the rub? A lot of people are going to read this paper and interpret this as economists throwing shade on the nuclear phaseout. I think this is only part of the story and maybe not the most important takeaway message.

The paper, like any econometric paper, has to rely on data from the past. In this case, this means the paper assumes the historical grid as its counterfactual. Not some shiny new solar, wind, biofuel and alicorn powered 0% emissions grid. If we had that grid, these numbers  would change. In that world, if you turned off a nuke, a shiny clean renewable plant would “ramp” up (or storage would kick in). Marginal costs for renewable energy (at least the ones generating electricity) are very low, but we have discussed the economics of grid-scale renewables at length on this blog.

So, what I am saying is that the costs of this phaseout in a future grid do not necessarily have to be as high as the ones cited in the paper. It all depends on the economics of the renewable grid. But for now, Germans are paying the price from the phaseout in terms of higher rates, worse air quality and increase GHG emissions.

Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.

Suggested citation: Auffhammer, Maximilian. “No Nukes, Mo Problems.” Energy Institute Blog, UC Berkeley, January 27, 2020, https://energyathaas.wordpress.com/2020/01/27/no-nukes-mo-problems/

 

Maximilian Auffhammer View All

Maximilian Auffhammer is the George Pardee Professor of International Sustainable Development at the University of California Berkeley. His fields of expertise are environmental and energy economics, with a specific focus on the impacts and regulation of climate change and air pollution.

14 thoughts on “No Nukes, Mo Problems. Leave a comment

  1. Great post, Max. As usual, I learned a lot. In this case: a bit more about how all y’all use counterfactuals, how 17 went to 7 goes to 0 in Germany, which helps neither Germans nor global climate change, and what an alicorn is, although I’m still puzzled about how they get connected to the grid.

  2. Thanks for the summary of an important paper, Maximilian. You are also describing the situation in California in the event that reasoned arguments against the closure of Diablo Canyon Power Plant (DCPP) in 2025 are ignored. California adds a few twists to the narrative. Climate change is killing millions of trees in the western Sierra Nevada foothills. These are the same tinder-dry forests where PG&E’s transmission lines from their 167 hydroelectric dams are passing through. Since PG&E/s transmission lines have ignited at least two major wildfires – and the outlook is for below-average California rainfall this spring, the likelihood of major PG&E Public Safety Power Shutoffs (PSPS) including transmission lines looms large for summer and fall 2020. That means big curtailments of PG&E’s hydroelectricity and power imports from the north. On the other hand, DCPP’s 500 kV feeds to California’s AC “backbone” have NOT been subject to PSPS curtailments. Thus, without DCPP, California would likely be facing rolling blackouts later this year.

    Nonprofit intervenor Californians for Green Nuclear Power, Inc. (CGNP) has provided considerable additional details in their CPUC testimony in R.16-02-007 regarding the important role DCPP plays in providing reliable power to Californians. Another climate change issue is drinking water. DCPP’s desalination system could easily be increased from 1.5 million gallons per day (GPD) to 100 million GPD. California’s use of desalination is long overdue. The nation of Algeria with a comparable population to California desalinates about ten times as much water as the state.

    Longer term, California must also defend their dominant energy supply and water supply against inevitable large-scale earthquakes. The big problem is that California imports 95% of their natural gas used for electricity generation and other vital uses from out -of-state via an aging and vulnerable network of large-diameter natural gas pipelines. Those natural gas pipelines will be broken in many places by big earthquakes. Repairs will take months to years. A secondary problem is that much of California is dependent on a network of brittle aqueducts for their drinking water. Those aqueducts will be reduced to rubble where they cross fault ruptures.

    Adding more solar and wind will not increase the resilience of California’s energy and water supplies. Instead, the state needs to keep emission-free DCPP running beyond 2025 since DCPP does not require any natural gas to function. DCPP can supply vital power and drinking water, two vital commodities required to recover from large-scale natural disasters. The state should pay attention to the eminent scientists and engineers of the California Council on Science and Technology (CCST) who advised the state in 2011 to build about 30 new nuclear reactors to cost-effectively meet California’s aggressive legislated emissions reductions. See https://ccst.us/reports/californias-energy-future-the-view-to-2050/ and https://ccst.us/reports/californias-energy-future-powering-california-with-nuclear-energy/ So-called renewables (or unicorn flatulence) just represent wishful thinking – and merely serve to prolong the dominance of California fossil-fired generation.

    • As I’ve pointed out before, CGNP’s arguments were soundly rejected PG&E, its settlement partners, every other intervenor group and the CPUC in the Diablo retirement case. There is no groundswell to continue operation of Diablo beyond 2025 and I’ve noted numerous times that the projected costs of relicensing drive Diablo’s costs above $100/MWH which is not cost effective compared to alternatives. No one has yet presented credible evidence of a conspiracy or outright fraud and deception in this proceeding.

      And Dr. Nelson continues to rely on an obsolete 2011 study that fails to reflect the dramatic cost declines in renewables and storage (nor does it reflect the dramatic cost increases in expected nuclear construction costs evidenced by other global projects). That study should be simply set aside. There are much better and more recent studies done for the CEC and other organizations that Dr. Nelson should reference instead.

  3. Note that German power plants are covered by the EU-ETS (cap and trade) so that the increase of CO2 emissions is offset somewhere in the EU and maybe so are the local pollutants at least in part.
    I don’t think it is taken into account in the paper, but I am not 100% sure (the EU-ETS is not mentionned in the intro).

  4. Oh, you poor, poor General Public… you really don’t know the first thing about nuclear power generating stations. You don’t know, except sketchily, what E=MC(squared) means, you don’t know beans about IONIZING radiation… that there are different kinds, their penetrating abilities, how they interact with matter, and how radiation exposure units, Sieverts (once rem), are developed from Radiation Quality Factors. You certainly don’t have any feel for the HAZARD associated with exposure to ionizing radiation, other than Eeeeeek! (Cue the creepy music.) You don’t even know the difference between a Pressurized Water Reactor abd a Boiling Water Reactor. Nor should you be expected to know. It’s not so terrible that you weren’t industrious enough to learn on your own. I mean, Yuk! The Nuclear Power Industry didn’t lift one finger in any attempt to educate you, nor really to open any dialog at all, except to adversaries… who decided that, since they too didn’t know beans, the Industrialists were all lying. Serves them (the Industrialists) right.
    And, so you huddled together, frightened, and you pulled out the big guns (democracy). And, you shot yourself in the collective feet.

  5. Quickly reading the paper, I don’t see how the risk of a nuclear accident is computed, but it looks like the value per MWH was taken from a different paper. So I did a quick back of the envelope calculation for the benefit of the avoided consequences of an accident. This paper estimates a risk of an accident once every 3,704 reactor-operating years (which is very close to a calculation I made a few years ago). https://www.tandfonline.com/doi/full/10.1080/00963402.2016.1145910 (There are other estimates showing significant risk as well, e.g.,: https://hal.archives-ouvertes.fr/hal-01018478/document, https://scitechdaily.com/likelihood-of-nuclear-accident-200-times-greater-than-previously-thought/). For 10 German reactors, this translates to 0.27% per year.

    However, this is not a one-off risk, but rather a cumulative risk over time, as noted in the referenced study. This is akin to the seismic risk on the Hayward Fault that threatens the Delta levees, and is estimated at 62% over the next 30 years. https://www.researchgate.net/publication/262223331_Quantifying_the_earthquake_threat_in_the_Sacramento-San_Joaquin_Delta_California_how_bad_can_it_get. For the the German plants, this cumulative probability over 30 years is 8.4%. Using the Fukushima damages noted in the paper, this represents $25 to $63 billion. Assuming an average annual output of 7,884 GWH, the benefit from risk reduction ranges from $11 to $27 per MWH.

    • “This paper estimates a risk of an accident once every 3,704 reactor-operating years (which is very close to a calculation I made a few years ago).”

      Both your calculation and reference are laughable.

      You may be surprised to learn the Governing Board of “The Bulletin of the Atomic Scientists”, authors of your non-peer-reviewed paper, is not only devoid of scientists of the atomic persuasion – but any scientists at all. TBAS, which admits “at our core, we are a media organization”, is a non-profit fear factory, staffed by anti-nuclear activists, who keep their doors open by scaring the hell out of the public at the expense of the environment.

      Contrast with the U.S. Nuclear Regulatory Commission (NRC), an organization with nothing to win or lose in the game. After several comprehensive Probabilistic Risk Assessments (PRAs), NRC concludes the likelihood of “core damage presenting a risk to public health” at Diablo Canyon Power Plant of once every 28,500 reactor years – five times lower.

      It’s tough to quantify fear, but there’s no doubt efforts by you, Greenpeace, the Bulletin of the Atomic Scientists, and other fear-porn outlets has already done incalculable damage to global climate, and threatens more. Given the threat of climate change, there will likely be no extant specimens of Homo Sapiens to worry about core damage or nuclear waste, should they ever become a threat.

      • You are looking at only one paper. I found several that come to similar conclusions. The risk calculation is across the population of reactors, not Diablo Canyon, and this reference is to the analysis of the German fleet, not PG&E’s.

        The NRC is not “unbiased”. It’s at least as captured by whom it is regulating as the CPUC or FERC.

  6. Hi, I enjoyed the article and learning of your modelling technique. Could the latter be used to estimate the costs/benefits of introducing a new resource into the mix. My company, UniGen Resources, used a CEC grant to develop a concept called, well, UniGen. The purpose of the research was to develop a tool whereby Variable Energy Resources could scheduled in the DA Market with minimal schedule deviations. This is done by pairing a VER and a firming resources such as storage and controlling the output of both to maintain the DA Schedule. It works well and one of the side benefits is that the presence of 10-20% of these UniGen paired resources on the CAISO system adds significantly to frequency regulation and mitigates the afternoon ramps following an over-generation incident. The final report for the CEC contains this information and can be found on our website. I’d be willing to fund some research if you are 1) interested and 2) think your modelling technique is applicable. Please contact me and I can explain. Cheers, John Redding, CEO, UniGen Resources.

  7. I hope to get around to reading the paper, but I have one particular question related to this statement:

    “The cost of electricity generation went up due to the phaseout, resulting in higher prices. This is not surprising, given that the marginal cost of generation for nukes is very low (they cost a pretty penny to build though).”

    When computing the “marginal” cost of nukes, did they include the avoided capital additions required for the refueling assemblies? In the U.S., these costs are usually overlooked when computing the going forward cost for these plants (for Diablo Canyon, these amount to almost $20/MWH), but I don’t know if in Germany or Europe in general that they include these.

    • In my quick review, the paper appears to use the short term operating cost of a $10 per MWH. This does not include the foregone cap adds or the greatly reduced labor costs. Both of those are important avoided cost components.

      Also, I couldn’t tell of the study used forecasted energy prices for 2011 when the decision was made, or if it was using historical actual prices. If the latter, that doesn’t review the decision within an appropriate framework, because those actual prices could not be known in 2011. And unfortunately, policy makers who review and rely on this study likely will not understand that very important distinction.

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