Japanese nuclear power: not so cheap when you run the numbers properly

Japan's Mainichi Daily News has a very interesting article looking at the price of Japanese nuclear power.  Like in the US and many other countries, government sources and reactor owners have long touted nuclear as the least expensive source of power in Japan.

However, Kenichi Oshima, a professor of environmental economics and policy at Ritsumeikan University, has done some calculations and has reached a completely difference conclusion. Oshima says that the cost for a kilowatt-hour of electrical power between fiscal 1970 and fiscal 2007 was 10.68 yen for nuclear, 3.98 yen for hydroelectric, and 9.9 yen for thermal generation, with nuclear-generated power coming out as the most expensive. These calculations were even presented at a meeting of the government's Atomic Energy Commission last September.

What did Oshima include that the others did not?  Large government subsidies, for one.  Oshima estimates that 70 percent of the subsidies given out by the national government have gone to nuclear.  He also used actual data on operating levels (closer to 70% than the 80% assumed in government costing), and on plant construction and operating costs (which were also higher in actuality than in the pro-forma examples often cited).  Costs of nuclear waste management were also left out of the government's estimates; and they overestimated the costs of power competitors such as hydro by assuming a shorter asset life than reality (40 rather than 60 years or more).

A counter-position is presented by Takeo Kikkawa, a professor of business history at Hitotsubashi University.  He points out that the lowest power costs in Europe are in France, which embraced nuclear energy; and the highest are in Italy, which abandoned nuclear energy.  I'd suggest some prudence in taking this ancedotal comparison too seriously.  Many things in Italy cost more; it has among the most expensive petrol in the world, for example.  But the efficiency and intervention of government plays a big role here; it is not simply which mix of power sources they have chosen.  Further, the costs of French nuclear power are hardly an open book either.  Kikkawa is worried that rising power prices on the Japanese mainland will make domestic industrial firms uncompetitive.  An important concern, to be sure; but not one that has any bearing on the real price of Japanese nuclear power.

(Thanks to Henry Sokolski at NPEC for forwarding the Mainichi article).