March 22, 2007
Coal Cheaper Without Tougher Emissions Restrictions

Eric McErlain of the Nuclear Energy Institute notes that tougher emissions restrictions on coal burning plants work to make nuclear power more competitive.

But as we've noted here at NEI Nuclear Notes before, nuclear plants in Asia have been built in 42-48 months -- about the same amount of time it will take to build advanced coal-fired plants like ultra-super critical or IGCC plants.

Further, NEI estimates say that the capital cost of nuclear power plants is expected to be competitive with advanced coal-fired power plants. If you factor in capital costs from new nuclear power plants, productions costs and most importantly, the cost of carbon controls on fossil-fueled power plants -- something that Gore vigorously endorsed in his oral testimony -- the cost of electricity from nuclear energy is very competitive when compared to coal and more affordable than electricity from renewables. For more, see our recent Wall Street Presentation.

In a nutshell: Coal loses its position as the cheapest electric power source if coal burners are forced to emit no pollutants at all. The costs of halting all conventional pollution and CO2 emissions add up to make coal more expensive than nuclear. Whether nuclear displaces coal for baseload demand therefore depends on how rapidly publics in various countries come to support a zero emissions policy toward fossil fuels pollution.

As living standards rise I expect governments to move toward zero tolerance policies toward pollutants. The more affluent people become the more they will embrace policies aimed at making their environments as perfect as possible. Rising affluence translates into greater demand for goods and measures that increase both health and esthetic enjoyment.

For now though, coal is on a worldwide tear. Mark Clayton of the Christian Science Monitor reports on the huge worldwide coal binge.

So what does the future hold? An acceleration of the buildup, according to a Monitor analysis of power-industry data. Despite Kyoto limits on greenhouse gases, the analysis shows that nations will add enough coal-fired capacity in the next five years to create an extra 1.2 billion tons of CO2 per year.

China is the biggest builder of new coal plants and looks likely to remain so. But the data on future rates of coal plant building in China is shaky and the Chinese government is not open on this subject (and its rapid economic growth as a non-open society is troubling). Many countries, even in green Europe, are rushing to use more coal because it is cheaper.

For example, the United States is accelerating its buildup dramatically. In the past five years it built 2.7 gigawatts of new coal-fired generating capacity. But in the next five years, it is slated to add 37.7 gigawatts of capacity, enough to produce 247.8 million tons of CO2 per year, according to Platts. That would vault the US to second place –just ahead of India – in adding new capacity.

Even nations that have pledged to reduce global warming under the Kyoto treat are slated to accelerate their buildup of coal-fired plants. For example, eight EU nations – Germany, Italy, Poland, Spain, Bulgaria, Hungary, Slovakia, and the Czech Republic – plan to add nearly 13 gigawatts of new coal-fired capacity by 2012. That's up from about 2.5 gigawatts over the past five years.

Leave aside CO2 for the moment. The huge increase in coal usage is also increasing the emissions of lots of conventional pollutants including particulates and mercury. But people will put up with it because it is cheap or because they have little say in the decision making processes that allow these plants to get built..

Share |      Randall Parker, 2007 March 22 10:45 PM  Energy Policy

Jake said at March 23, 2007 8:11 AM:

Coal fired plants in third-world countries including China do not bother me. Coal is replacing wood, charcoal, and animal waste as their power source. Thus coal is a vast improvement air quality wise in those countries.

Cost is not the issue with nuclear power. It is virtually politically impossible to build a nuclear power plant in the US as the left will do everything possible to stop their construction. Ironically, coal plants do not bother them. With the Democrats winning control of Congress, nuclear power will be set back by ten years.

Coal will be king for many years to come unless Republican are victorious once again.

Brian Wang said at March 23, 2007 11:25 AM:

Coal is being added in China to power the production of more goods for internal usage and for export.
Powering the production of more steel and concrete for making the buildings for the 20 million that move to the cities every year.
It is increased energy usage. That stuff from Walmart, mostly produced using power from coal plants in China.
The Xinhua News Agency has quoted an environmental official, Wang Jinnan, as saying that more than 410,000 Chinese die as a result of pollution each year

indoor air quality and deaths from charcoal burning is bad but it is mostly killing in Africa, India. Coal pollution 80% of china's energy is more of the problem for pollution deaths in China.

Both indoor and outdoor air problems should be fixed.

First new US nuclear site approved March 9

Energy Policy Act 2005 has already cleared the way for the new nuclear plants in the USA

After much preliminary debate the Energy Policy Act 2005 comfortably passed both houses - 74-26 in the Senate and 275-156 in the House. It includes incentives for the nuclear power industry including:

production tax credit of 1.8 c/kWh from the first 6000 MWe of new nuclear plants in their first 8 years of operation (same as for wind power on unlimited basis),
federal risk insurance of $2 billion to cover regulatory delays in full-power operation of the first six advanced new plants,
rationalised tax on decommissioning funds (some reduced),
federal loan guarantees for advanced nuclear reactors or other emission-free technologies up to 80% of the project cost,
the Price Anderson Act for nuclear liability protection extended for 20 years.
support for advanced nuclear technology.
Also $1.25 billion was authorised for an advanced high-temperature reactor (Next Generation Nuclear Plant) at the Idaho National Laboratory, capable of cogenerating hydrogen. Overall more than $2 billion was provided for hydrogen demonstration projects.

In 2006 it was spelled out that the 6000 MWe eligible for production tax credits would be divided pro-rata among those applicants which filed COL applications by the end of 2008, which commence construction of advanced plants by 2014, and which enter service by 2021.

The Act also addressed climate change, requiring action on a national strategy to address the issue by 2007. In 2005 the USA emitted 5.9 billion tonnes of CO2 from energy use.

28 Applications in the works from now to 2009

There are now 104 fully licensed nuclear power reactors in the USA, though only 103 are operational*. Four more are partly built and have valid construction licenses.
Browns Ferry 1 has been shut since 1985. The 1200 MWe reactor is on schedule for May,2007 restart after rebuilding.

rsilvetz said at March 23, 2007 1:25 PM:

Quote:Coal Cheaper Without Tougher Emissions Restrictions

[insert technology] cheaper without .gov interference

How much cheaper you might ask?

If libertarians are to be believed, anywhere from 8-100x if all tech was free and the bulk of regs repealed. The effect of reverse compounding (imagine the interest on a loan decreasing the principal instead of ballooooning it!) can't be easily calculated, but rogue historical data suggests it would be on the order of 25% rate.

No hard numbers, except price performance in free-market computation follows Moore's Law. Hmmm?

What does this mean for China? They behave as defacto capitalists and have defacto markets without significant price controls. A 10-fold increase in poor air quality deaths will mean the rapid importation/stealing of Western clean air tech on their coal plants. Watch it happen in real-time in the next decade. I even expect to see the nuclear reactor push happen.

bigelow said at March 24, 2007 8:29 AM:

“If libertarians are to be believed…”

Then don't believe. Libertarianism is a wonderful theory, in practice though as many production costs as possible are socialized and profit goes private.


undergroundman said at March 24, 2007 5:56 PM:

It's likely that fish is already dangerous, but eventually it could become downright poisonous.

Also, check out how much pollution the 50 dirtiest plants emit:

Do you believe in taxing these industries because of their externalities?

Nuclear power is nice, but demand for uranium is far outstripped by the supply right now.

Randall Parker said at March 25, 2007 8:25 AM:


I'd rather the coal burners weren't allowed to emit the pollutants at all. I do not want to get paid for the damage they cause me. I'd rather not get damaged in the first place. Paying for it is an involuntary exchange.

Uranium demand: But uranium production could get scaled up rather quickly. So I do not see the problem. I realize a guy from MIT just commented that uranium supply could be a problem if nuclear power usage got scaled up in a big way. But I read the MIT press release on his comments and it is not clear to me he's saying that actual reserves in the ground are a problem. He appears to be saying infrastructure is a problem.

In the extreme we could distill uranium from sea water and still produce affordable electricity from nuclear power.

Randall Parker said at March 25, 2007 2:39 PM:


BTW, great link on the 50 dirtiest coal plants. North Dakota's looking pretty bad on this score.

The differences between the best and the worst coal plants are so huge that I do not see why the higher levels of emissions should somehow be seen as necessary. We should not let plants generate so much pollution per amount of electricity provided:

The 50 dirtiest plants in terms of total tons emitted are responsible for nearly half of all SO2 emissions, but generate only 26 percent of electricity. The report notes that power plant companies are finally starting to reduce their sulfur dioxide pollution, thanks to a combination of factors including enforcement actions and new federal rules. Half of the top fifty highest SO2 emitters in terms of total tons are expected to have scrubbers in operation by 2010.

The top 50 plants averaged 22.44 pounds of sulfur dioxide per megawatt-hour, compared to only one pound per hour for plants equipped with state of the art scrubbers.

Paul Dietz said at March 26, 2007 12:29 PM:

we could distill uranium from sea water

The correct verb is 'adsorb'. Distillation would be prohibitively expensive.

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