By Michael Mariotte

The IEA/NEA’s new report doesn’t say what the NEA wishes it did.

It must be rough to be a nuclear power advocate these days: clean renewable energy is cleaning nuclear’s clock in the marketplace; energy efficiency programs are working and causing electricity demand to remain stable and even fall in some regions; despite decades of industry effort radioactive waste remains an intractable problem; and Fukushima’s fallout–both literal and metaphoric–continues to cast a pall over the industry’s future.

Where new reactors are being built, they are–predictably–behind schedule and over-budget; while even many existing reactors, although their capital costs were paid off years ago, can’t compete and face potential shutdown because of the very aspect of nuclear power that was supposed to be its economic advantage: low operating and maintenance costs that are proving instead to be too high to manage.

Not surprisingly, the nuclear industry is fighting back. After all, what other choice does it have? But two major new reports released this week by established nuclear advocates indicate that the only ammunition left in their arsenal is wishful thinking.

The first is a new study jointly produced by the International Energy Agency (IEA) and its sister organization in the OECD, the Nuclear Energy Agency (NEA): Projected Costs of Generating Electricity. It’s an update of a study last produced in 2010 and despite the headlines being pushed by the industry, which claim nuclear power is economically competitive with other generating technologies, it doesn’t actually say that at all. But perhaps that’s to be expected by an organization now headed by former NRC Commissioner William Magwood and devoted to the promotion of nuclear power.

As Jan Haverkamp of Greenpeace International explains,

You can see the NEA’s bias very clearly in slide 11 (part of the public presentation on the report’s release), where the title is: “Nuclear: an attractive low-carbon technology in the absence of cost overruns and with low financing costs”… which shows clearly where the problem is. To call this “attractive” but then sidelining two of the inherent financial issues with the resource is tendentious to say the least. Apart from not including costs like those for clean-up after severe accidents, an insecure cost idea of waste management, and a preferential liability capping scheme with government back-up.

Exactly. If you assume there are no economic problems with nuclear power, then it looks just great. The problem is that in real life, nuclear power’s financing costs are not low–they are extremely high because nuclear reactors are considered, for good reason, by investors to be very risky undertakings. One reason they are risky, and thus incur high financing costs, is that they are notorious for their cost overruns.

As if to slap its Paris-based companion the NEA in its face with cold reality, yesterday Electricite de France underscored new nuclear power’s fundamental economic problems, announcing that the EPR reactor it is building in Flamanville, France, is another year behind schedule and its cost is now projected at triple its original 2007 estimate.

The study …read more

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