The 137th edition of the Carnival of Nuclear Energy Bloggers is out. This one, hosted by The Hiroshima Syndrome Blog celebrates the 2013 New Year with stories on a variety of topics.
Stop by and check it out!
Happy New Year!
This Week in Nuclear
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My first reaction was “Wow! Did I just read that correctly?!”
It was one of those “ah-ha moments” when a seemingly mundane statement leapt out of the page and whacked me on the forehead. This time the catalyst was a twitter reply from Chris Pragman (@ChrisPragman) who describes himself as an “Avid Podcast listener, Engineer, Nuclear Power, Fire Protection, and beer geek with a long commute!”
You see, I had posted a tweet earlier in the day about the cost to taxpayers of some “green energy” jobs. There’s a new wind farm in Oregon called Shepherds Flat that received federal cash grants totaling $490 million under the guise of job creation. For that grand sum the Shepherds Flat project will create 35 new jobs. The math is easy; $14 million per “green energy” job. Our tax dollars at work!
This tidbit about Shepherds Flat was part of a larger report by the Energy Tribune that among other things compared the relative size of US government subsidies to various energy industries. The report by Robert Bryce calculated subsidy dollars per unit energy produced and concluded the renewable energy industry receives 6.5 times more federal government subsidies than the nuclear industry, and 12 times more than the oil and gas industry. That fact really didn’t surprise me considering the billions of dollars in grants, production tax credits, and favorable depreciation rules the government lavishes upon anything branded with the “renewable” label. Then Chris asked a great question, “What do they consider nuclear subsidies?”
When I dug into that question I learned the Congressional Budget Office is tasked with tracking the amount the government spends subsidizing various industries, and they publish their findings periodically. There it was on page 3: $900 million in “subsidies” for the “favorable tax treatment of nuclear decommissioning funds.” Hmmm. What could that be?
You see, every nuclear plant owner is required by federal law to set aside funds to ensure there’ll be enough money to pay for decommissioning the plant when the time comes. Typically plant operators add to the fund each year and over time the fund grows until it’s used. The NRC monitors each fund and will require plant owners to make additional payments if they think they’re behind. These funds are essentially forced savings accounts that add to each nuclear plants annual operating expenses.
So what’s the “favorable tax treatment?” It turns out Title 26 of the United States Internal Revenue Code requires interest or other investment earnings of nuclear plant decommissioning funds to be taxed at “only” 20%. Maybe I’m alone in this, but being required by law to set up a fund, then being taxed on that fund’s growth hardly fits the definition of a “subsidy!” Other sources of energy are not required to set up such funds – they carry the potential future costs of dismantling equipment as liabilities on their balance sheets. In the case of nuclear plants they’re forced to set aside capitol in government mandated and monitored funds, then the government takes 20% of the fund’s earnings.
Anyway, in 2009 the CBO calculated this “favorable tax treatment” to be worth $900 million, and they called that a “subsidy.” That’s quite a different kind of subsidy from the cash grants, tax credits, and accelerated depreciation enjoyed by the renewable energy industry. Personally, I have a tough time viewing this as a subsidy at all.
Chris, thanks for asking the question! I learned something new today, and maybe some of you out there did too.
Happy Birthday to This Week in Nuclear!
On Dec 27 This Week in Nuclear will turn seven years old. I would like to express my heartfelt “thanks” to all of you who have supported and continue to support the blog and podcast!
With some time off from my “day job,” I finally had an opportunity to perform a bit of long-overdue maintenance on the TWiN web site. I’ve updated many pages and added a new “Most Popular” feature.
The Most Popular button is at the top of the right side bar and it provides a shortcut to the blog posts that have received the most user attention in the last year. Try it out – you might find an interesting post that you missed the first time around!
Along with some behind-the-scenes tweaks, other noteworthy changes include:
Have a great nuclear day!
Spain’s electrical supply industry is caught in a decade long death spiral of failed energy policy, over-reliance on imported fuels, and massive debt. Their new taxes on nuclear energy, an attempt to reduce utility debt, are likely to worsen their economy.
Spain imports fuel for about 51 % of their electricity production in the form of coal and natural gas. Payments for these imported commodities contribute to a debilitating trade imbalance. Nuclear energy makes up the lion’s share (47%) of Spain’s domestic energy production. Their eight nuclear energy facilities add tens of thousands of jobs and billions of euros per year to the national economy while reducing the need for imported coal or gas. At the same time Spain’s nuclear plants provide reliable, predictable energy without greenhouse gas emissions.
The amount of renewable energy generated in Spain has increased considerably over the last several years. In fact, in 2012 wind energy production exceeded nuclear energy production for brief periods when demand was low, some nuclear plants were out of service, and wind conditions were nearly optimal. Unfortunately, Spain’s methods of encouraging investment in renewables have contributed to their current financial crises. The Spanish electricity industry is carrying $32 billion of debt, putting serious strain on an already faltering economy.
Spain began deregulating their electricity supply system in the late 1990′s. Their approach was eerily similar to the failed California experiment; they removed price controls to allow power generators to compete among themselves, but they limited rates paid by customers. As wholesale energy prices rose utilities were unable to recover the higher costs through higher rates to customers. The result was predictable: electric utilities began loosing money on a grand scale. Since 2005 annual “energy deficits” have been in the billions of euros per year. With slight-of-hand economics, the Spanish government allowed utilities to “bank” their annual deficits against future earnings. Unfortunately those future earnings never materialized and deficits ballooned.
A the same time Spain (like California) began a heavily subsidized renewable energy program that included “feed-in tariffs” which guaranteed wind and solar generators above market prices for all of the energy they could produce. Consequently utilities were forced to buy wind and solar energy at inflated rates, but were not allowed to recover the costs because of those same price controls. Solar and wind energy investors raked in billions of euros per year while the utility deficit grew even faster. By some accounts electric utility debt in Spain now stands at $32 billion.
These out-of-whack energy policies cost Spanish workers dearly; for every renewable energy job created more than five existing jobs were lost and unemployment soared to over 20%. According to the Canada Free Press:
For each megawatt of wind energy installed, 4.27 jobs were lost, and for each megawatt of solar energy installed, 12.7 jobs were lost.
Eventually it became clear the Spanish government would have to act to curtail the exploding debt and rescue the utilities from bankruptcy. Earlier this year they stopped granting requests for new feed-in tariffs. Beginning in January 2013 they’re implementing a new 6% flat tax on all electricity production. In addition, they’ve singled out nuclear energy for “special” taxes they are calling a “nuclear waste generation and storage tax.”
Let’s get this straight: Spain’s national energy policies enriched wind and solar energy investors while bankrupting utilities and contributing to massive job losses. Now they’re calling on nuclear energy operators, their largest source of domestic energy to foot the bill! Not only is this course of action irrational and unfair, it punishes the domestic energy production and job creation they desperately need and it perpetuates favoritism for expensive renewables that created the problem in the first place.
The first victim has already fallen to the anti-nuclear tax; the Santa María de Garoña nuclear plant is being forced out of business. Garoña is a 446 MW BWR that began commercial operation in 1971. The plant’s owner says the new 153 million euro tax that will go into effect in January is more than ten times the plant’s annual profit. They have no choice but to shut the plant down for the last time on Sunday, December 23. Hundreds of jobs will be lost at the plant and in surrounding communities. Since Garoña provides about 1.4% of Spain’s electricity, utilities will be forced to import more coal and natural gas to make up for lost base load generation.
With lost jobs, lost revenues, and rising energy imports Spain’s energy death spiral continues.
Mis oraciones por mis amigos de Garoña. Buena suerte en el Año Nuevo, y le deseo todo lo major.
Last week a group of Buddhist monks joined the protest against San Onofre Nuclear Plant. The local press made a big show of the spectacle as if the presence of members of a Seattle monastery somehow added stature to the demonstration and validity to their claims.
The monks said they also want to call attention to what they believe are the global dangers of nuclear power. “We need to shut down the San Onofre,” Gyosen Sawada of Los Angeles, who said he was born in Fukushima, Japan, told the group before beginning a three-hour walk from Dana Point Harbor. “No more Hiroshima. No more Nagasaki. No more Three Mile Island. No more Fukushima. No more San Onofre.”
Activists, medical practitioners and politicians who have demanded moratoriums [on uranium mining] may have various reasons for doing so, but their claims that the public and environment are at risk are fundamentally wrong.
That about sums up the facts on the safety of uranium mining and the validity of motives of those who oppose it. What’s particularly noteworthy about this statement is its source: Michael Binder, the President of the Canadian Nuclear Safety Commission. It’s impressive to see this level of leadership from the Canadian equivalent of the US Nuclear Regulatory Commission.
As is often the case, the passage of time yields clarity about events, and the nuclear power plant accident at Fukushima is no different. It has become clear that the misinformation and hysterics by anti-nuclear groups and individuals were mostly wrong. Their doomsday prophesizing actually worsened human suffering and environmental impacts by contributing to unwise decisions by political leaders in Japan and elsewhere to shut down nuclear plants. In contrast, bloggers and experts from within the nuclear community accurately predicted outcomes and human health impacts. Read the rest of this entry »
Note: this post also appears at the ANS Nuclear Cafe
What better way to celebrate National Nuclear Science Week than to acknowledge amazing career opportunities that exist for people interested in joiningthe nuclear renaissance. If you are a middle or high school student (or are the parent of one) considering college alternatives, you would be hard pressed to find a better investment than earning an associates or bachelors degree in nuclear-related science, engineering, or technology.
Opportunities for entry level positions have not been this rich at any time during the past three decades, and the nuclear industry is partnering with many schools to ensure graduates have the knowledge and skill for success as power plant engineers, operators, and technicians. Because of a combination of national and international trends, there have never been more opportunities for young people to begin careers in the nuclear industry. Read the rest of this entry »
or “Why I’m Still A Climate Change Skeptic”
It must be great to be a climate change believer.You get to boldly declare your alignment with the “A” team, the smartest minds and greatest strategic thinkers of our time, or so we’ve been told.You get praise from big government (at least under the current US administration) and get to hang out with old hippies who sail up and down the Hudson River playing folk music and singing songs about Mother Earth and fighting the good fight.
Unfortunately, I can’t count myself in, but I’m not exactly out either.I’m on the fence and that’s a problem for me.My science and engineering education taught me enough about pv=nrt and the partial pressure law of gasses to know you can’t just keep dumping airborne crud and gasses into a fixed volume of anything without changing it’s composition.I’ve also been around long enough to see changes in the planet, but are those being caused by progressive man-made climate change or a normal natural cycle? Read the rest of this entry »
On September 8, 2011 the electrical grid in and around San Diego, California experienced a blackout that lasted for more than 12 hours. By some accounts more than 5 million people were effected. The initiating event was a human error that caused a large transmission line from Arizona to turn off unexpectedly. I recently discussed why a single failure as occurred that day should not have caused such a widespread grid failure, and how New York City will be much more susceptible to similar events if Indian Point Nuclear Plant is shutdown prematurely.
As it was designed to do, the San Onofre nuclear plant automatically disconnected itself from the grid and shut down then the blackout occurred. This was done as part of the plant’s protective scheme to shield the plant from unintended consequences from the falling grid voltage and frequency. A similar thing happened to nine nuclear plants in the eastern USA during the blackout of 2003.
Why do nuclear plants trip off line when a blackout happens? Read the rest of this entry »