Debate is now raging in Japan over whether idled nuclear reactors should be reactivated.
Largely missing from the discourse is the following point of view: The cost of nuclear power generation changes in response to the public's perceptions of the risks involved.
The cost of nuclear power primarily derives from the huge outlays required to ensure that the plants operate safely.
Nuclear power generation is based on a very simple thermodynamic principle. The system, like a steam engine, turns the thermal energy of steam into useful mechanical energy (to turn turbines). The difference is that the source of the thermal energy is nuclear fission.
Nuclear power is actually very cheap if we ignore the costs of trying to prevent accidents and dealing with spent nuclear fuel. The huge costs involved stem mainly from the complicated and sophisticated technologies needed to ensure the facilities run properly and safely.
The overall cost of using atomic energy depends on the level of safety we demand.
If people can accept the design of a nuclear plant that only guarantees a minimum level of safety against earthquakes and other disasters, and not worry about small-scale radiation releases, the cost of atomic power generation would be very low. But nuclear power gets more expensive if we demand greater safety.
In calculating the cost of nuclear power generation, a range of factors comes into play, including the price of uranium, assorted construction costs and capacity utilization rates. But they are variables that change almost constantly.
The more emphasis is put on safety, the more it will cost for building facilities and disposing of radioactive waste. At the same time, capacity utilization rates will fall.
Safety costs are not determined solely by experts. They grow as people become more sensitive to the risks involved and aware of their rights.
The same holds true with the costs of insurance against and compensation for accidents, as well as subsidies and other policy efforts to persuade local governments to host nuclear power plants in their neighborhoods.
And the scope of local governments and communities that need to be covered by such efforts widens as more people become concerned about the risks posed by nuclear power plants.
That being the case, the cost of nuclear power generation will only keep trending up over the long term even though it may fall back temporarily from time to time.
Costs can only fall if the public becomes less concerned about safety issues and less aware of their rights while the authority of experts and the government increases.
In short, the cost of nuclear power generation is not determined by purely economic factors. It is a function of overall social conditions.
The nations planning to build nuclear plants share the recognition that their governments have vast authority, while their people are not sufficiently aware of their safety and human rights and do not have a strong say in their governments.
But these countries, too, will inevitably face long-term rises in the cost of nuclear power generation.
The same theory applies to the international price of uranium, which is used as fuel for nuclear reactors. Current prices reflect human rights situations and the safety awareness of miners in uranium-producing countries as well as people living in areas around the mines. From this standpoint, the price of uranium can only move upward in the long term.
A single serious accident or a terrorist attack involving a vessel or truck carrying uranium would cause the cost of transportation to soar.
Nuclear power generation is also vulnerable to social change. The massive initial investment needed to build a nuclear power plant doesn’t pay off unless the plant operates on a stable basis for at least 30 years.
During that period, demand for electricity needs to keep growing while power rates remain stable. In addition, the reactors must keep operating at high utilization rates without serious mishap.
That can happen in an authoritarian country whose economy and population continue growing and whose government controls electricity rates as part of national policy. Even then, economic slumps or moves toward a free and democratic society would seriously undermine the conditions that make nuclear power generation economically sensible.
Japan’s total nuclear power generation capacity has barely increased since the end of the 1990s. In addition to a series of accidents and declining utilization rates, economic stagnation and progress in energy-saving technology, which have depressed demand for electricity, have undermined the rationale for building new nuclear power plants.
In addition to the liberalization of the electricity supply market, the Fukushima No. 1 nuclear power plant disaster last year has only made the economic and social environment for atomic energy less favorable.
By now, it should be clear to anybody that there is no viable future for nuclear power generation in this country.
It is debatable whether there is sufficient power generation capacity to meet society’s need for electricity without a single reactor in operation.
What is clear is that Japanese utilities will face financial difficulties, at least in the short term, if their reactors stay offline.
Unless the reactors are brought back online, the facilities that were built at huge cost will turn into bad assets that require upkeep expenses and decommissioning costs without generating any revenue.
It is easy to understand why utilities are so desperate to restart their idled reactors, prolong their life and complete the reactors under construction.
The banks that have lent money to utilities to build these plants, the insurance companies that have shares in the utilities, the manufacturers that have invested heavily in facilities to make nuclear reactors, and the ministries and agencies that don’t want to be held accountable for their past efforts to promote the use of atomic energy as a national policy, are all understandably reluctant to support the calls for pulling the plug on nuclear power generation.
Given the new realities of deepened public anxiety about the risk of nuclear power and the increased cost of safety following the Fukushima catastrophe, continuing to invest in nuclear power generation would be an economically nonsensical policy that amounts to good money after bad. Pouring taxpayer money and people’s savings into the businesses without any prospect for a viable future would be simply outrageous.
The only sensible option left is a courageous retreat from nuclear power generation. In order to avoid making things even worse, people responsible for the future of nuclear power generation, especially political leaders, should make the tough but right decision.
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Eiji Oguma is a professor of history sociology at Keio University.
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