There’s an atomic price chasm between Beijing and Washington, giving China a green advantage and leaving the US trailing in its efforts to clean up the power grid.
When it comes to the speed and cost of nuclear power, the gap between the US and China is turning into a chasm.
Take a single Monday.
On July 31, after long delays, the US welcomed its first new reactor in seven years when Southern Co.’s Vogtle Unit 3 began feeding power to the grid. Along with Unit 4, which is set to start later this year, building two new reactors is expected to end up costing $30 billion — more than double the starting budget.
That same day, China’s State Council approved six new reactors — for a combined cost of $17 billion.
The stark difference goes a long way toward explaining why China is on pace to eclipse the US as the world’s largest source of atomic energy by as early as the middle of this decade, a significant boost to clean-energy ambitions with potential diplomatic benefits, too.
Once Vogtle Unit 4 is online, the US will have built three new reactors this millennium. China is building anywhere from six to 10 every year.
Why such a gulf? Clearly, not every cost is detailed in China, but there are a few advantages to highlight.
First, lending rates. Support here is crucial, as most of the lifetime cost of running a nuclear plant is the upfront construction. According to the World Nuclear Association, the difference between a 1.4% rate and a 10% rate — the low end in China versus the high end in many developing nations — makes the difference between atomic generation being cheaper than coal and gas to being far more expensive than both.
Then, a steady construction pipeline helps, David Fishman, analyst at The Lantau Group in Shanghai, says. Equipment and component makers can standardize production when they know there will be demand for their specialized goods year after year, and more experienced construction crews can avoid costly delays. Making the plan replicable is everything.
And, of course, China’s one-party system has proven more adept than America’s messy democracy in recent decades at permitting and constructing all kinds of infrastructure projects.
Vogtle’s final bill more than doubled as it accrued seven years of delays.
The experience has encouraged the US to all but give up on new large-scale nuclear plants, with most research and investment going into small-scale and modular reactors. But those technologies, while promising, remain unproven and, in even the best-case scenario, will take years before they can be deployed at scale to finally clean up the grid.
The US can get back on the nuclear path, with the environmental and geopolitical advantages that brings. It’s not too late to copy a few moves from China’s playbook.
Source: Bloomberg