|Fig. 1: Prices of installed power generating capacity by year. (* Includes price of ancillary equipment necessary for baseload generation. Source: A. Riscoe, following Lovering and Fu et al. [4,8])|
Climate change has recently been recognized as a significant issue worldwide. The UN climate Paris agreement signed in 2016 ratified by 184 nations has put in place a limit of a global average temperature increase of only 2°C by a reduction of emissions of CO2. Given that both in industrialized nations as well as industrializing nations, energy use is only projected to increase over the next century, carbon free sources must supply the increasing demand as well as supplant some of the current carbon energy used in the world today. Renewable sources such as hydroelectric, wind and solar energy are an emergent source supplying around 3% of the world electric generating capacity in 2012.  In the same year, nuclear energy powered 10.6 of the worlds electrical grid. Recent reports suggest that for the first time ever, nuclear power was more expensive than solar on an installed cost basis per unit of power generating capacity.  This report investigates the recent economic history of these two power generation methods to provide context for the recent price changes and inform the claims of renewables supplanting nuclear power generation to meet the 2°C rise in global temperature target.
Nuclear energy is produced from fission of Uranium or plutonium, a process that releases a tremendous amount of both energy in the form of heat and radiation. Nuclear reactors produce a steady high rate of electrical power without producing carbon dioxide. Generation plants are built for a lifetime of roughly 50 years and will be operating at high capacity for a significant portion of this time due to the difficulty in startup and shutdown. Plants are however expensive to produce due to the necessity of control processes and physical containment of the nuclear fission core. Fissile waste is also potently radioactive, and there are no current methods available for remediation of the waste of radioactivity within roughly 1000 years when the most potent sources of radiation have decayed.  This creates a public image problem as well as a potential threat from hostile groups. Solar power is produced from excitation of electrons in a semiconducting material from the valence band to the conduction band where they are collected with an electric potential (voltage) from absorption of sunlight. Solar panels can be deployed in small- or large-scale facilities depending on the power market. Low intensities of incoming light combined with low efficiencies of commercial Silicon solar cells (meaning about only 20% of incoming solar light is converted into electric power) means that the footprint for solar facilities is large compared to other fuel sources. The greatest challenge in deploying solar power, however, is intermittency. As cells can only harvest power when the sun is shining, to supply power in off peak times energy storage is a required compliment to any solar generation plant.
Nuclear power is expensive to generate safely. Despite 70+ years researching reactor designs, engineering costs designing plants to be specific to deployment sites and construction costs drive capital costs of producing plants high enough such that they have a quoted cost of about ~$4000/ kW at a ~1.1 GW facility globally. Increased regulation in the US as well as additional construction costs incurred in building a plant of this size have recently pushed the actual costs of recent nuclear reactors to up to $8500/kW.  These factors, as well as the lack of some sort of market force incentivizing carbon free power have led to the decreasing use of nuclear power for electricity generation. Conversely the price of installed solar power has dramatically fallen over recent years. The cost of electricity supplied by solar power decreased by a staggering 75%-90% from 2007 to 2017.  This decrease in cost can mostly be traced to the development of the Chinese solar panel manufacturing sector. This industry was in its infancy in 2008 mostly supplying the needs of outlying settlements unable to reach the Chinese grid.  In 2008, an overwhelmingly popular German subsidy program for residential solar panels created a huge demand without supply. Some German incentives were matched with a tremendous (~$50 billion) capital subsidy from the Chinese government for solar module manufacturing facilities which prompted rapid construction and implementation at scale.  Once the German market was unable to produce enough demand, the Chinese government doubled-down on subsidizing the industry and offered incentives for utility scale solar power facilities to operate in China, creating a large domestic market. This fueled rapid growth of the industry allowing the use of economies of scale to reduce the cost of production of solar modules. The subsidy on power facilities was ended in June of 2018 due to the financial impact on the state leading to a current (February 2019) glut of solar modules on the market further decreasing the global price.  While this glut is likely temporary, the Chinese solar panel industry has made real cost deductions that have helped enable the ~26-fold increase in solar power deployment from 15 GW in 2008 to the 390 GW of 2017 global solar electricity capacity with an approximate price to install a commercial facility at ~$1300/kW. [7,8]
If it were as simple as comparing the ~$6500/kW cost of installed nuclear power with the ~$1300/kW of installed solar, it would be obvious that solar would completely supplant nuclear power. For solar energy to completely compete with baseload generators like nuclear, energy storage needs to be deployed as well. As of 2016, the United States had ~1200 GW of power generating capacity and ~700 MW of battery storage capacity that at capacity can hold ~850 MWh of power.  Essentially, the US grid could store ~0.5% of the capacity for an hour. Clearly if all of the US power market were solar, there would be little electricity for use at night. The EIA estimates the cost of installed energy storage in batteries around $1500 kW for batteries that last 2 hours. This price depends largely on total energy capacity and duration. In a hypothetical solar power station we can create an analogous baseload generator by simply averaging our power over 24 hours and account for storage to power the facility throughout each night. For argument sake, lets say storage is $1500/kW and can provide 2 hours of power. This hypothetical facility will need storage to provide power for 16 hours while the sun doesnt shine, at a total cost of $12000/kW. Also, as we need to charge storage for 2/3 of the day, well have to increase our capacity for the same deliver power, bringing the generation cost to ~$4900/kW. So now our solar baseload facility costs a whopping ~$16900/kW, far less attractive than the original estimate of ~$1300/kW or the $8500/kW price tag of a nuclear facility. Looking at Fig. 1, a plot with these costs, it is easy to see how it is unlikely how this "baseload generator equivalent cost" makes solar unable to compete with nuclear with current technology.
At the current state of development, even with cheaper solar modules, solar power cant compete with nuclear power for baseload generation based on intermittency. Other less storage intense applications are far more attractive for solar power. Projections indicate a slightly more favorable increase in cost for deploying solar at 25% of the grid (only a 4x price increase including storage) than the hypothetical scenario presented here though the cap is likely near 60% of the power market. [10,11] While it may be possible for a renaissance in energy storage given that the solar manufacturing industry in China grew in only 5 years, it is unlikely. Some governmental forces are helping this along, for instance California has a mandate for 1300 MW in storage capacity by 2025 and could become a solar power market at scale.  Price alone has not yet positioned solar power to dominate the energy landscape, and governments have shaped its development as an industry and will continue to shape its deployment through such means as subsidies and mandated development of the complimentary industry of energy storage.
© Andrew Riscoe. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
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