Friday, April 29, 2011
Strip the subsidies from nuclear power
The Financial Times on April 25 in an editorial headed “Time to revive, not kill, the nuclear age” advocated reviving nuclear power, whilst bemoaning that this is going to be another bad week for the nuclear industry. On top of the continuing radioactive releases from the Fukushima plant, the 25th anniversary of the Chernobyl disaster is providing anti-nuclear campaigners with a rallying call, the editorial regretted.
In a reader’s letter, Dr Yousaf Mahmood Butt of the Harvard-Smithsonian Center for Astrophysics retorted thus:-
I would, perhaps, support your viewpoint if the nuclear industry could revive itself without massive government subsidies.
In the US – the biggest user of nuclear power – the industry receives huge ongoing insurance bail-outs under the 1957 Price-Anderson Act. This outdated legislation limits the liability of the nuclear industry in the event of a major nuclear accident and artificially cheapens the price it pays for insurance. As a result, nuclear-derived power itself is artificially cheap, one reason that it continues to displace renewable in the not-so-free-market.
The Nuclear Regulatory Commission (NRC) reports that many nuclear suppliers have said that “without Price-Anderson coverage, they would not participate in the nuclear industry”. If an industry that has benefited from massive government research and development and other subsidies for more than five decades, and which creates staggering unresolved waste disposal problems, raises proliferation issues, and poses serious risks to human health, cannot survive without government support then, perhaps, it ought not to survive.
Applause. But also uneasiness. And my uneasiness is that by expressing the argument in this way you pander to an underlying assumption that energy ought to be provided by a free market. The complaint raised is that governments by subsidising nuclear are interfering with this free market. I actually make no complaint about governments subsiding cleaner energy. Let them distort the market I say. The point is that the subsidies ought to be redirected to renewables, and to energy efficiency, and to reducing energy use.