Shouldn't we be comparing that social cost of nuclear with the social cost of dumping all that co2 into the atmosphere. Serious question here,what would the likely insurance premium be against the climate going a bit nuts?
Definitely: that's why I included a carbon cost of £150/tCO
2e. Estimating marginal social damage cost of carbon is difficult, but a range of £100-£200 is in line with the upper numbers in the literature. If we were talking about long-term increases in emissions, that would be a serious problem. But we're not. We're talking about a very small number of gigawatts of emissions for a couple of years.
As for
Philip R's "nationwide grid system failure", no, not at all. Plenty of countries manage perfectly well without any nuclear and don't have this nationwide grid system failure. Higher prices? Well, that's a question of how the costs are allocated. As I tried to show with the calculations above, there is a net gain in economic efficiency from a phase-out of nuclear and a corresponding ramp-up in renewables. That means a net economic gain for the country. Does it mean increased gas consumption? Well, with the renewables getting built at about the same rate as the nuclear is decommissioned, then no, it doesn't. However, even if it did mean burning a bit more gas for a couple of years, the cost calculations are still favourable.
Yes, that certainly should set some alarm bells ringing: can it really be true that the marginal liability costs of nuclear are so large that they become larger than the marginal damage costs of carbon from burning a bit more gas? It does depend on a whole bunch of things that we have very limited information on, which means there is very high uncertainty on it. Crucially, what is the probability of a UK nuclear accident of the scale of Fukushima or Chernobyl? NB this is not asking what are the chances of identical accidents of either (negligible); but rather, what are the chances of a release of radioactive material through any cause on that scale (non-negligible)? And if it were to happen, what are the odds that the material would end up on economically productive parts of the country, rather than (as happened after Fukushima) there being incredible good luck (after the terrible luck of the earthquake & tsunami) that resulted in almost all of the airborne material being blown out into a gigantic ocean where it was very quickly diluted and carried away from detectable harm. Because had those winds blown in another direction, towards Tokyo say, then the Fukushima nuclear disaster wouldn't have cost a mere £100-200 billion or so, it could have been ten or fifty times higher. And that's how the liability costs risk become inordinate. That's why no sane insurer would dream of taking on that risk. And if they wouldn't, why should the taxpayer do so?
Regarding
phoooby's point: I think the lagoon is still the wrong answer, because it's more expensive than onshore wind or PV, and is unlikely to produce as much power as our remaining nukes. Tidal barrages across all our major estuaries
could produce mean power of that order (I reckon around
5.6 GW for England plus some for Scotland), but that would be a 10 to 20-year project to build them. Now, I think we probably should build them (we'll need the barrages for flood protection from rising seas anyway, so may as well make them generate power too), and we should start now, but that's a little too slow to help with the economic inefficiencies of keeping our old nukes running.
For
djs63's question: yes, we do need additional support for things like frequency reserve and storage: and what we've learnt from the recent capacity & frequency auctions is that building that stuff is much cheaper than most of us had dared to hope for. So right now, the marginal costs of wind and pv intermittency on the British grid are very low.
One way to balance out all these trade-offs is to structure the market so that it can discover an efficient allocation. That means taxing fossil fuels at the upper end (because of the asymmetric risk) of their marginal social damage cost; and taxing nuclear at its marginal social risk cost. I'd expect that we'd see is both fossil fuels and nuclear vanishing off the grid fairly promptly, and renewables getting built far faster than we've seen to date. Yes, that would definitely make the cost of energy shoot up for a while, until the substitutes were built. It would also bring in huge amounts to the exchequer which could be distributed back to citizens and non-energy businesses, thus leaving them no worse off on average. And it would mean that many energy-efficiency measures suddenly become a lot more viable economically.
A
