The Brattle Group (BG) "answers complex economic, regulatory, and financial questions for corporations, law firms, and governments around the world." Recently, the BG prepared an economic analysis of the economic impact of nuclear power in the United States for a group called Nuclear Matters (NM). The mission of NM is " to inform the public about the clear benefits that nuclear energy provides to our nation, raise awareness of the economic challenges to nuclear energy that threaten those benefits, and to work with stakeholders to explore possible policy solutions that properly value nuclear energy as a reliable, affordable and carbon-free electricity resource that is essential to America’s energy future."
The report claims that nuclear power in the U.S. supplies ten billion in tax revenues to the federal government, reduces carbon dioxide emissions and provides jobs. The most contentious claim in the report is that nuclear power reduces wholesale electricity prices by ten percent and retail electricity prices by six percent. Critics of the report point out that nuclear power accounts for about nineteen percent of the electricity in the U.S. If nuclear power is reducing the price of electricity by ten percent, that would mean that it would have to be about half the combined average price of coal, gas, hydroelectric and renewables which is around twelve and a half cents per kilowatt hour. That would make nuclear generated electricity around six cents per kilowatt hour. Skeptics of this claimed price advantage say that nuclear plants are notorious for consuming a lot more time and money than original estimates.
The price for nuclear power cited in the BGreport is not based on the cost of producing a kilowatt hour. Instead, it is based on the price of electricity at a given moment in time. A serious shortcoming of the report is that fact that it does not take into account the capital costs of building a nuclear power plant or operating costs such as recurring maintenance costs and long-term employment of staff. It bases its cost estimate for generating electricity on short-term costs such as fuel and immediate operating costs. When comparing levelized costs for electricity which take into account multiple factors, nuclear power is exactly average in price.
One of the authors of the Brattle Group reports explains their approach by saying, “We’re not trying to evaluate the economics of nuclear or any other supply source in this study; we’re trying to see how it affects market prices, so that we can estimate the effect on customer costs and thus the economic impact. A nuclear producer might be losing money overall, but that considering just short-term costs, it is cheaper to operate than a peaker. Of course, this is how the power market works and how plants are actually operated."
Peakers are power plants that are only run when there is high demand. It makes sense that they would be more expensive to operate than a plant that produces a steady level of electricity. On the other hand, steady producers like nuclear power plants are inflexible and it is difficult to moderate their output to match changing demand.
The BG reports seems to be tailored to say something nice about nuclear power. It achieves a favorable comparison with other power sources by cherry picking the metrics that are being used to the advance of nuclear power. It does not seem to me that this report really adds any important information to the debate over the best major source of electricity.
