VLS Study: Widely Misunderstood in U.S., the French 'Nuclear Miracle' is Plagued by Fast-Rising Reactor Costs and 'Crowding Out' of Renewables

Cooper Analysis Shows French Approach Touted by Some For U.S. Reactor Build-Up Is a Failed Model; U.S. Wind & Solar Industries Would Suffer Under Embrace of "French Nuclear Socialism."

SOUTH ROYALTON, Vt., Sept. 9 /PRNewswire-USNewswire/ -- The so-called "French nuclear miracle" embraced by some U.S. policymakers as a model for this nation is a misconception masking a pattern of fast-rising nuclear reactor construction costs and a "crowding out" of investments in renewable energy, such as wind, solar and hydro-electric power, according to a new study by Vermont Law School's Institute for Energy and the Environment.

Study author Mark Cooper, the VLS Institute's senior research fellow for economic analysis, said:  "The problems in the French nuclear industry are similar to the problems that have long afflicted the U.S. industry, so there it no reason to believe that things will change if the U.S. follows the French path.  If the U.S. nuclear industry is relaunched with massive subsidies, this analysis shows the greatest danger is not that the U.S. will import French technology, but that it will replicate the French model of nuclear socialism.  Nuclear power will remain a ward of the state, as has been true throughout its history in France; a great burden on ratepayers, as has been the case throughout its history in both France and the U.S.; and it will retard the development of lower-cost renewables alternatives, as it has done in France and portions of the U.S."

Cooper's study, which VLS is publishing today at http://www.vermontlaw.edu/energy/news, is titled "Policy Challenges of Nuclear Reactor Construction: Cost Escalation and Crowding Out Alternatives. Lessons from the U.S. and France for the Effort to Revive the U.S. Industry with Loan Guarantees and Tax Subsidies."  

Key study findings include the following:

• Nuclear reactors are not cheaper in France.  Both the U.S. and French nuclear industries have experienced severe cost escalation in recent years.  Measured in 2008 dollars, U.S. and French overnight costs were similar in the early 1970s, about $1,000 per kilowatt (kW).  In the U.S. they escalated to the range of $3,000 to $4,000 per kW by the mid-1980s.  The final reactors were generally in the $5,000 to $6,000 range.   French costs increased to the range of $2,000-$3,000 in the mid-1980s and $3,000 to $5,000 in the 1990s. The report finds that the claim that standardization, learning, or large increases in the number (and size) of reactors under construction will lower costs is not supported in the data.    
• In France and the U.S. building nuclear reactors and central station facilities crowd out energy efficiency and renewable energy.     The French track record on energy efficiency and renewables is poor compared to similar European nations. In the U.S., past nuclear construction future nuclear plans appear to crowd out alternatives – a trend that would worsen significantly under large-scale subsidization of nuclear reactors, which mirrors the French model.  States in which utilities have not expressed an interest in getting licenses for new nuclear reactors have a better track record on efficiency and renewable and more aggressive plans for future development of efficiency and renewables.  With respect to efficiency and renewable energy the "no nuclear plans" U.S. states have (in comparison to U.S. "nuclear states"): had three times as much renewable energy and ten times as much non-hydro renewable energy in their 1990 generation mix; set Renewable Portfolio Standards (RPS) goals for the next decade that are 50 percent higher; spent three times as much on efficiency in 2006; saved over three times as much energy in the 1992-2006 period; and have much stronger utility efficiency programs in place.
• The U.S. would have even more to lose in terms of renewables than France if it followed France's model of more nuclear power.  According to the new report, the U.S. has a much greater opportunity to develop alternatives not only because the cost disadvantage of nuclear in the U.S. is greater, but also because the portfolio of alternative resources is much greater in the U.S.  The U.S. consumes about 50 percent more electricity per dollar of gross domestic product per capita than France, which has the highest electricity consumption among comparable Western European nations.  The U.S. has renewable opportunities that are four times as great as Europe.

Commenting on the study, Stephen Thomas, professor of energy studies, University of Greenwich, London, and a member of the editorial boards of Energy Policy, Utility Policy, Energy & Environment, and International Journal of Regulation and Governance, said:  "The French nuclear power industry is in crisis on three counts: its new reactor technology, the Evolutionary Power Reactor (EPR), is proving expensive and difficult to build and gaining safety approval is proving slow and problematic; the existing 58 reactors are far less reliable than its European and US peers; and its flagship nuclear companies, the utility Electricite de France (EDF) and the reactor vendor, Areva are struggling to control their levels of debt … This experience suggests that, far from being a model to emulate, the French experience is a cautionary tale of overdependence on nuclear power and on the state becoming too embroiled in commercial decisions."

Missing from most U.S. discussions of the "French model" is information about the history and recent experience of French nuclear costs, detailed analyses of past U.S. costs and current cost projections and a careful examination of the impact of the decision to promote nuclear reactor and other central station construction on the development of alternative energy sources. Cooper's paper uses historical qualitative and statistical analysis to fill those gaps.

Cooper explained:   "The policy implications of this paper are both narrow and broad.  Narrowly, the paper shows that following the French model would be a mistake since the French nuclear reactor program is far less of a success than is assumed, takes an organizational approach that is alien to the U.S. and reflects a very different endowment of energy resources."

He added:  "Broadly, the paper shows that it is highly unlikely that the problems of the nuclear industry will be solved by an infusion of federal loan guarantees and other subsidies to get the first plants in a new building cycle completed. U.S. policymakers should resist efforts to force the government into making large loans on terms that put taxpayers at risk in order to 'save' a project or an industry that may not be salvageable."

ABOUT VERMONT  LAW SCHOOL

Vermont Law School, a private, independent institution, has the top-ranked environmental law program and one of the top-ranked clinical training programs in the nation, according to U.S. News & World Report. VLS offers a Juris Doctor curriculum that emphasizes public service, a Master of Environmental Law and Policy degree and two post-JD degrees, the Master of Laws in Environmental Law and the LLM in American Legal Studies (for international students). The school features innovative experiential programs and is home to the Environmental Law Center and the South Royalton Legal Clinic. For more information, visit www.vermontlaw.edu.

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SOURCE Institute for Energy and the Environment, Vermont Law School

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