Friday Interview: Nuclear vs. Solar Power Costs Debated

A recent study by the anti-nuclear power group NC WARN argued that solar power is less expensive than nuclear power. Many media organizations ran the study’s conclusions without even looking into the data. Daren Bakst, director of legal and regulatory studies for the John Locke Foundation, examined the data and reached drastically different conclusions. Bakst compared the costs of nuclear and solar power during an interview with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)

Martinez: This study received a whole lot of attention, including an article in The New York Times, and that article sort of got the paper in a bit of a pickle. What happened?

Bakst: Well, they didn’t do their job when they reported the story. The story was so biased, the article, that the editors had to come back and put a little note at the end of the article days later saying how biased the article was. They had to clarify — they never mentioned that the study was done by an advocacy group, an anti-nuclear power advocacy group — so they had to clarify that, and they did. So unfortunately a lot of other newspapers across the world picked up the story, The New York Times story, but then they didn’t necessarily clarify the bias. So that’s really why we did this study. The NC WARN study got all this attention, and it’s time for people to actually get the facts now.

Martinez: We’re going to talk specifically about the areas of concern that you write about in your report reacting to this NC WARN study. But in general, Daren, give us the headline. You say the study is deeply flawed. Why?

Bakst: NC WARN argues that solar power is actually more cost competitive than nuclear power. Unfortunately, people might actually buy that. But it’s the opposite. And when we analyze their study, and simply [the] facts, and actually just use common sense, we understand that nuclear power is far more cost-competitive than solar power. In doing their analysis — or at least to get the result they wanted — NC WARN looked at the cost of solar power. They said, OK, it’s 35 cents per kilowatt hour to generate solar power — power from solar power sources. And then what they did was, they reduced that cost by subsidies. They picked two subsidies — the federal and state tax credits — and they said, when we take into account the subsidies for solar power, now it’s only 15.9 cents per kilowatt hour. Well, by that logic, that means that if we had a 100 percent tax credit, we could make solar power free. Or we could make nuclear free, or we could make health care free. Anything you want, it can be free.

Martinez: I take it they did not do that, then, with nuclear.

Bakst: And the problem was, they didn’t do it for nuclear power. They don’t adjust. They just take the cost of nuclear power, and then they don’t take any subsidies the nuclear power has. They talk about nuclear power having all kinds of subsidies, but then they don’t apply those subsidies to nuclear power to kind of reduce the cost for nuclear power.

Martinez: So then, it’s not an apples-to-apples comparison they’re doing.

Bakst: No, it’s not an apples-to-apples comparison. But even worse is the concept of taking into account subsidies to reduce the cost. Well, costs don’t magically disappear in the air. That doesn’t happen. Ultimately it may cost 15.9 cents to a customer through the tax subsidies that they’re talking about — may or may not — but somebody’s paying for that other 20 cents. It doesn’t just disappear, as I said. Who is paying for it? We are. We’re paying for it in our role as taxpayers. So the cost is still 35 cents per kilowatt hour, based on their calculations. You don’t take subsidies and reduce the cost. In fact, if anything, you would look at a cost, and you would build in the subsidies to figure out the true cost.

Martinez: Now you also write, Daren, that the estimates NC WARN used are inconsistent with reliable sources.

Bakst: Yes. I mean if we look at Energy Information Administration, which is the federal government, solar power is three times more expensive than nuclear power. It’s not even close. And EIA is considered to be a relatively fair government agency with their data. … What’s ironic is that NC WARN relies very heavily on a study done by a professor, I believe at the University of Vermont, regarding nuclear power. And this study that they heavily rely on and live by, in this study, what they don’t say is that their own source admits that solar power is two to five times more expensive than nuclear power — that it’s not even cost-competitive. So that didn’t work in their favor.

Martinez: Very interesting. You also get into the issue of the utilities, and you say that the study assumes that utilities don’t care about money. Why is that something important that you looked at in their study and said, wait a second, that’s not right?

Bakst: In their study, they kept talking about how the utility companies are ignoring solar power and they just want to keep building nuclear power. Well, if the costs are better for solar power, then that doesn’t make any sense. That assumes somehow that utility companies don’t care about making money, and I doubt they think that. I’m sure they don’t. And on top of that, we have legal requirements in the state for the utility companies to generate solar power and renewable energy in general, so if they can meet these legal requirements imposed on them, they’re going to do so if solar power is cost-competitive. They’re not going to try to shoot themselves in the foot just because they love the idea of building nuclear power plants.

Martinez: Are solar power and nuclear power interchangeable? Because that is part of the NC WARN report as well.

Bakst: I think in some ways to me that’s maybe the most important point — that it’s not interchangeable. You can’t simply — we have to have conventional sources of electricity like nuclear power. Solar power is an intermittent source. It’s not going to be sunny all the time, so solar power may occasionally generate electricity. I do stress occasionally.

Martinez: Because it requires sunshine.

Bakst: Yes. And we don’t have a way to store that power. You have to use the power instantaneously. So nuclear power is actually one of the most reliable sources of electricity. It is actually the most reliable source of electricity we have. To me, base load generation — which is the electricity that we have to have all the time — you need conventional sources like nuclear power to meet peak load demand, which is the demand when it’s at its highest. Nuclear power can meet that demand. But again, solar power, we can’t dictate, tell the sun to generate power for us at any time, so you can’t rely on it for peak demand. So solar power has got very limited value to us.

Martinez: Daren, I’ve often found it interesting that many environmental groups will say that they don’t like nuclear power. Yet it doesn’t release any greenhouse gas emissions, which tends to be one of their big concerns. And I’ve always wondered about that.

Bakst: That tends to be one of their big concerns? It is their big concern. I think that says everything about this global warming scare and the scare tactics they use. If they’re so concerned about it, one of the biggest things we could do to actually reduce greenhouse gas emissions would be to move to nuclear power. I’m not saying we should do it for that reason, because we’re still not going to make a difference when it comes to temperature. But when it comes down to it, they just don’t really like conventional sources of electricity that actually produce reliable, low-cost electricity for us.