Some of the things said about the financial aspects of nuclear power show a considerable lack of understanding (perhaps wilful) of the proper way of calculating costs.

(Now, there are other issues with nuclear power, but this thread is about honesty in representing the financial costs).

A couple of common claims are

a) That the decomissioning costs are so high that if they are included in the cost of the power stations then nuclear power becomes uneconomic.

b) Since the nuclear waste has to be stored pretty much forever, this means that the cost of doing so is infinite.

Neither of these claims are true, because of the way discounted cash flow (DCF) works. See http://forum.onlineopinion.com.au/thread.asp?discussion=96 for a discussion of DCF.

A consequence of that is that if a power station lasts 50 years, then the cost of decommissioning it at the end of its life with a discount rate of 4%, the cost of decommissioning has to be divided by 7 before being added to the cost of construction. Since the decomissioning costs are in any case not large compared with the cost of construction, this means that decomissioning has a minimal effect on the cost of the electricity.

I've chosen 4% for the discount rate because it is approximately equal to the difference between the current interest and inflation rates.

Even if the waste has to be stored forever, then the present value of doing so is simply the amount of capital required to produce a real annual interest equal to the annual cost. With a rate of 4%, this means that for every $1 annual cost of storage, we need a present day investment of $25. This is really the cost of storing the waste as from today. If the waste only has to be stored after the station is decomissioned, then that figure is divided by 7. In practice, the waste will be produced during the life of the station, so the true figure lies between the two.

Sylvia.

Syliva, are you in the middle of an accounting degree or similar?
You seem obsessed with DCF.
I work for a major Investment Bank, and even we don't look at everything in such purely financial terms.
We are often willing to lose some money on our first few dealings with a new client in order to build a RELATIONSHIP that lasts, which is far more profitable in the long term.

DCF is not the be all, and end all of life on earth, reagrdless of what your Uni lecturer may have told you (I find most financial lecturers way out of touch with the real world.

There are too many other factors like goodwill, and evironmental benefits, or the defence of freedom & human rights etc etc etc. Do you think Churchill did a DCF analysis before he sent men into battle?

Think about it, or something else would be a good idea :)

Tao,

Please confine your responses to the topic. I am not the subject of this thread.

Sylvia.

Clearly, the request that responses be confined to the topic should have been addressed to Stomont, not tao.

Sylvia.

Sylvia,

People don’t have to see things according to your rules and parameters. If you want to restrict debate to only what you want to discuss, then talk to yourself in the mirror.

One of the major concerns I have with nuclear energy and the long term storage of waste is that we have to trust the people in power to do the right thing with it. Yet there is no way that we can possibly trust them to give us the right information, or to ensure that there is no long term damage, particularly in our political and economical system.

There is no amount of money that will compensate for an unlivable planet.

Tao,

This is a thread about truth about the financial aspects of nuclear power. I have started the thread for the purpose of discussing that. If you want to discuss other aspects of nuclear power then start your own thread for the purpose - don't hijack the one I've started.

It is a forum rule that replies must be on topic.

Sylvia.