Delta Force
Banned
Prior to 1973, energy consumption had historically and consistently increased by 7% per year. With the 1973 and 1979 Energy Crises, consumption patterns began to adopt a new curve as higher energy prices led to a greater emphasis on energy conservation, leading to reduced consumption. This led to the cancellation of hundreds of power plants in the United States, and many utilities had surplus capacity factors of 20% to 30% into the late 1980s and early 1990s. Nuclear power was hit particularly hard by the economic climate of the time, as nuclear power plants take years to plan and build, and inflation was very high. The overnight cost (cost of plants without the time value of money and financing charges) kept rising too due to tightened safety and environmental regulations, which were constantly shifting. This led to a feedback loop of spiking costs, as firms were forced to take out financing at high interest rates, while being subject to slipping time schedules and escalating costs from regulations. The economic climate was so bad that nuclear plants started being cancelled well before Three Mile Island, with the last American nuclear reactor order from the first era of nuclear energy being placed in 1978.
Assuming there are no 1970s energy crises and more nuclear reactors are built, there are some interesting implications. Historically, nuclear energy has had the second lowest variable cost of power generation, behind only hydropower. They would thus be a favored source of energy in a utility's portfolio in the event that there is more electricity capacity than demand. In fact, the capital costs of building the reactor make up such a large amount of total costs relative to fuel and maintenance that a utility could lose less money during an energy glut by selling nuclear energy at a cost higher than the low variable costs. Since reactors are licensed for 40 years (extendable to 60 years, with many expecting 80 years will eventually be allowed) this could lead to an energy gut for decades, depending on how extensive nuclearization is and how high energy consumption is when an energy crisis finally occurs.
For this scenario to occur, it would seem that avoiding the energy crises would be most critical, as well as avoiding the record high inflation levels seen during the 1970s. Also, the nuclear industry having someone in a position of power to push for a more predictable approach to regulation would probably help as well. I'm wondering how plausible it would be for these events to occur, and if there are any others that would be required.
What would it mean for the nuclear industry, energy industry, business, society, etc. for this to occur? It seems that electricity prices would likely be more stable (possibly even lower if a glut occurs after a crisis), and the energy sector would be less carbon intensive. Would there be as much of an emphasis on conservation, or would lower electricity prices reduce it? Also, if there is a large surplus of nuclear energy, could electric, hydrogen, or ammonia become popular as alternative sources of energy for transportation?
Assuming there are no 1970s energy crises and more nuclear reactors are built, there are some interesting implications. Historically, nuclear energy has had the second lowest variable cost of power generation, behind only hydropower. They would thus be a favored source of energy in a utility's portfolio in the event that there is more electricity capacity than demand. In fact, the capital costs of building the reactor make up such a large amount of total costs relative to fuel and maintenance that a utility could lose less money during an energy glut by selling nuclear energy at a cost higher than the low variable costs. Since reactors are licensed for 40 years (extendable to 60 years, with many expecting 80 years will eventually be allowed) this could lead to an energy gut for decades, depending on how extensive nuclearization is and how high energy consumption is when an energy crisis finally occurs.
For this scenario to occur, it would seem that avoiding the energy crises would be most critical, as well as avoiding the record high inflation levels seen during the 1970s. Also, the nuclear industry having someone in a position of power to push for a more predictable approach to regulation would probably help as well. I'm wondering how plausible it would be for these events to occur, and if there are any others that would be required.
What would it mean for the nuclear industry, energy industry, business, society, etc. for this to occur? It seems that electricity prices would likely be more stable (possibly even lower if a glut occurs after a crisis), and the energy sector would be less carbon intensive. Would there be as much of an emphasis on conservation, or would lower electricity prices reduce it? Also, if there is a large surplus of nuclear energy, could electric, hydrogen, or ammonia become popular as alternative sources of energy for transportation?