The International Renewable Energy Agency (IRENA) reported in April that renewable energy now forms one-third of the world’s total energy capacity – and that is an amazing statistic.
Yet at the same time, the International Energy Agency’s 2018 report (IEA) shows that energy demand is growing at the fastest pace this decade, rising 2.3 percent in 2018, alone. Sadly, much of this increase has been met by burning more fossil fuels.
As Digital Journal reported on April 29, while coal and natural gas — two of the major fossil fuels used for energy — fought for control of the market, natural gas has come out on top as the preferred fossil fuel used to generate electricity.
To put this in the context of what this does to climate change, natural gas accounts for 45 percent of the rise in overall energy consumption in 2018. If we add coal to the mix, the two fossil fuels accounted for a rise in CO2 emissions of 1.7 percent, which reached 33 Gigatons in 2018.
The transition to renewables leaves out nuclear power
The science community, environmentalists and most governments are hopeful the global economy can transition to carbon-free sources of energy before catastrophe strikes.
All this leads us up to the question of using more nuclear power — a fuel technology that already exists, and one that is carbon-free. It is cheap, in the long-term and works extremely well. But for a variety of reasons, nuclear power has been put on the shelf.
This means that nuclear energy is contributing a fraction of the energy generation it is capable of producing. As extreme weather events continue to occur more frequently, many advocates of using nuclear power are asking the world to give this source of clean power another chance.
There are currently about 454 nuclear reactors supplying power in 31 countries around the world. In 2017, these nuclear power plants supplied 2506 TWh of electricity (2506 billion kilowatt-hours) or about 11 percent of the world’s electrical consumption, according to the World Nuclear Association.
Bill Gates is an advocate for the use of nuclear power, investing in nuclear startups and even lobbying Congress to fund experiments in new nuclear energy. This was followed soon after by an editorial in the New York Times titled: “Nuclear Power Can Save The World,” authored by three notable academics.
The editorial contends that renewable sources of energy are expensive and cannot be relied on to deliver 24/7 electricity generation. We have all heard this before, as someone points out that without sunshine, there is no solar power and without the wind, there is no wind power.
The trio also notes that while hydroelectricity and geothermal energy generation have their place in the scheme of things, they have to rely on geographical locations. The editorial’s bottom line is simple – If we are to save the world, we need to build a massive fleet of nuclear power plants.
How is the cost of electricity calculated?
The cost of generating electricity includes everything from the capital cost, the financing charges and the production or operating costs (including fuel and maintenance of the technology) at the point of connection to an electrical load or the electricity grid.
The cost is typically given per kilowatt-hour or megawatt-hour. This includes the initial capital, discount rate, as well as the costs of continuous operation, fuel and maintenance. This calculation is important, especially to utility companies and policymakers when determining what type of power generation facility to build.
So with solar power, the cost of a solar panel is easy to calculate, whereas a different set of calculations is needed to come up with a cost for electricity based on a kilowatt-hour or megawatt-hour. This is called a levelized cost — the net present value of all costs (capital and operating) of a generating unit over its life cycle, divided by the number of megawatt-hours of electricity it is expected to supply.
Keep that in mind when looking at the graph below. New power plants start their life cycle with a full burden of construction debt and equity investment that they have to pay off in their first ten years or so while existing plants have already paid most of those debts.
However, once power plants pay off their original debts, they have far lower fixed operating costs and are capable of supplying electricity at lower costs, often at significantly lower costs.
Maybe, just maybe, advocates of nuclear power should not be dismissed out of hand. In a forthcoming story, Digital Journal will look a lot more closely into nuclear power and examine the pros and cons of this clean form of energy.
