"This can be tolerable to the banks only if they know the borrower can push off his additional costs on to the rate payer. But in a deregulated market this is a show-stopper." and "You cannot have an omnipotent regulator, a deregulated market, and private financing of nuclear power" Question - What am I missing here? Where in the world (and I mean that literally) is there an deregulated market for nuclear power? I can't figure out what you're talking about.
The US has some deregulated markets where nuclear plants sell into the market and cannot get guaranteed rates from the rate base, so they could not ensure that insurance costs could be covered
In fact they sometimes have to produce at a loss when wind and solar are producing and bid negative to gather subsidies, if it's costly to stop and restart the plant they will pay to stay connected to the grid during negative prices
I guess you're referring to a wholesale power market - I was thinking about the strict regulation of nuclear power and also of the price that utilities can charge the consumer - that's why the term "deregulated market" confused me. As a typical retail consumer, I'm just not familiar with how power is priced by BPA, for example, when they sell power to PGE.
Yes, we are talking about the wholesale electricity market. And yes "deregualtion" is a bit of a misnomer. Attempts to simulate a competitive market in electricity
combined with market distorting subsidies and mandates have resulted in a regulatory mess. The rules that attempt to govern these markets are far lengthier than the rules for a vertically integrated regualted monopoly. A good place to start learning about this mess in Angwin's book Shorting the Grid. It's New England oriented so it wont answer yr question. Nor can I.
The Gordian Knot Group has its own ideas about how the grid should be managed. Should have a piece out soon.
Fantastic analysis. The pushback will be that these fits may be considered essential by regulators to enforce the existing rules on 'acceptable exposure to radioactivity'. Here is where it would help to point out that, based on widely accepted and uncontroversial data, existing regulations value a life lost to radioactivity at least 100 times more than a life lost to air pollution. I explain the calculation below.
Real world evidence shows that existing Generation I-III nuclear power plants are around 1000 times safer than coal and 100 times safer than gas or biofuels.
Regulators would need to prove that without these fits any newly built reactor would be at least 100 more likely to cause a nuclear accidents than EXISTING reactors.
The consensus view of the International Committee for Radiation Protection (IRCP) is that increased risk of mortality from radioactivity is 5.5% per 1000 milliSievert (mSv). The ‘safe’ level set by all international regulators for public exposure to radioactivity from nuclear reactors is 1 mSv/year. For nuclear waste it is 0.04 mSv/year above background. This exposure would increase mortality by 0.00022-0.0055% (at 0.04-1 mSv/year).
The level of PM2.5 particles recommended by the latest (2021) WHO air quality guidelines is 5-15 ug/m^3.
So the recommended level of PM2.5 air pollution would increase mortality over 120-3000 times more than the recommended level of radioactivity exposure (0.68% versus 0.0055%-0.00022%).
It follows that our regulations value a life lost to radioactivity AT LEAST 100 times more than a life lost to air pollution.
Jack, well done! You pinned down the contradiction in asking for private capital while at the same time exposing that capital to unlimited political risk. Since a bank is a fiduciary institution their officers could be arrested for making that decision.
"This can be tolerable to the banks only if they know the borrower can push off his additional costs on to the rate payer. But in a deregulated market this is a show-stopper." and "You cannot have an omnipotent regulator, a deregulated market, and private financing of nuclear power" Question - What am I missing here? Where in the world (and I mean that literally) is there an deregulated market for nuclear power? I can't figure out what you're talking about.
The US has some deregulated markets where nuclear plants sell into the market and cannot get guaranteed rates from the rate base, so they could not ensure that insurance costs could be covered
In fact they sometimes have to produce at a loss when wind and solar are producing and bid negative to gather subsidies, if it's costly to stop and restart the plant they will pay to stay connected to the grid during negative prices
I guess you're referring to a wholesale power market - I was thinking about the strict regulation of nuclear power and also of the price that utilities can charge the consumer - that's why the term "deregulated market" confused me. As a typical retail consumer, I'm just not familiar with how power is priced by BPA, for example, when they sell power to PGE.
Yes, we are talking about the wholesale electricity market. And yes "deregualtion" is a bit of a misnomer. Attempts to simulate a competitive market in electricity
combined with market distorting subsidies and mandates have resulted in a regulatory mess. The rules that attempt to govern these markets are far lengthier than the rules for a vertically integrated regualted monopoly. A good place to start learning about this mess in Angwin's book Shorting the Grid. It's New England oriented so it wont answer yr question. Nor can I.
The Gordian Knot Group has its own ideas about how the grid should be managed. Should have a piece out soon.
Fantastic analysis. The pushback will be that these fits may be considered essential by regulators to enforce the existing rules on 'acceptable exposure to radioactivity'. Here is where it would help to point out that, based on widely accepted and uncontroversial data, existing regulations value a life lost to radioactivity at least 100 times more than a life lost to air pollution. I explain the calculation below.
Real world evidence shows that existing Generation I-III nuclear power plants are around 1000 times safer than coal and 100 times safer than gas or biofuels.
Regulators would need to prove that without these fits any newly built reactor would be at least 100 more likely to cause a nuclear accidents than EXISTING reactors.
CALCULATION
[Also described in FT letter and comments here https://www.ft.com/content/e76cd8f6-f4bb-498f-bb22-8e692d1a6133]
The consensus view of the International Committee for Radiation Protection (IRCP) is that increased risk of mortality from radioactivity is 5.5% per 1000 milliSievert (mSv). The ‘safe’ level set by all international regulators for public exposure to radioactivity from nuclear reactors is 1 mSv/year. For nuclear waste it is 0.04 mSv/year above background. This exposure would increase mortality by 0.00022-0.0055% (at 0.04-1 mSv/year).
For comparison, the increased risk of mortality from exposure to the most dangerous air pollution (PM2.5 particles) is 0.68% per 10 ug/m^3. (see https://www.nejm.org/doi/full/10.1056/NEJMoa1817364).
The level of PM2.5 particles recommended by the latest (2021) WHO air quality guidelines is 5-15 ug/m^3.
So the recommended level of PM2.5 air pollution would increase mortality over 120-3000 times more than the recommended level of radioactivity exposure (0.68% versus 0.0055%-0.00022%).
It follows that our regulations value a life lost to radioactivity AT LEAST 100 times more than a life lost to air pollution.
This is a great point. Could you provide some pictures or comparison graphs that illustrate the size of the difference?
Jack, well done! You pinned down the contradiction in asking for private capital while at the same time exposing that capital to unlimited political risk. Since a bank is a fiduciary institution their officers could be arrested for making that decision.
Good point. Will add.