Energy Minister-designate, Mathew Opoku Prempeh, has said its about time Ghana tried using nuclear energy to generate electricity for use in the country.
Touting nuclear energy as the ‘safest and cleanest’ form of energy, the Energy Minister-designate told the Parliamentary Vetting Committee on Friday, that plans are advanced to introduce nuclear energy into the country’s energy mix.
According to him, government now stands at the juncture of selecting a vendor to build nuclear power plants in the country.
“Successive governments since the year 2000, have all promoted and pushed for the agenda of nuclear power in the country, I have been informed that we have gone past certain initial stages in our quest to have nuclear power and that currently we now at the point where we have to select a vendor,” he noted.
“The selection of the vendor means a lot of things, it will decide the technology to be used and the training that has to be given to Ghanaians to manage the system. And the training is the last stage and that takes time and so if you don’t select a vendor on time it delays the progress made,” he stated.
“But I think we are at a time where probably we should try nuclear power, it is the safest and cleanest form of energy,” he further stated.
But a similar view is not shared by some local energy think tanks like the Institute of Energy Studies (IES) who believe the push for nuclear power by government is backward, given that times have changed to favour solar and wind energies, instead of nuclear power, based on economics, safety and security risks and investment hurdles.
The IES have argued severally that generating electricity from wind and solar energies is more economical than nuclear energy.
Read below 2 articles written by the IES challenging the use of nuclear energy by government:
Push for nuclear power in Ghana is wasteful and ill-advised – IES
The Institute for Energy Security (IES) has noted with concern government’s plan to switch its energy base-load— the permanent minimum load that a power supply system is required to deliver— from the Akosombo and Kpong hydropower systems to nuclear.
The government is seeking to introduce nuclear into the country’s energy mix, at a time when many countries around the world including Germany, Spain, Portugal, Belgium, Greece, and Italy; have either shutdown, or are in the process of pulling the plugs off nuclear plants because of complicated relationships with nuclear power.
The institute sees the push for nuclear power as backward, given that times have changed to favor solar and wind energies, instead of nuclear power, based on economics, safety and security risks, and investment hurdles.
Government argues that the establishment of a nuclear plant will guarantee the provision of regular and cheap power to push the nation’s industrialization agenda. However, the IES finds government’s claim as flawed, and does not reflect recent changes in the global power space.
IES’ analysis based on time to build, costs per kilowatt-hour, investment uptake and risk in relation to renewable sources of energy, finds that nuclear energy— once thought of as the primary answer to the world’s renewable energy drive, is today presenting itself as unfavorable in comparison to solar and wind alternatives.
Data from the U.S. Energy Information Administration (EIA) and financial advisory and asset management firm Lazard, have revealed that generating electricity from wind and solar is more economical than nuclear. Trend analysis based on Lazard’s Levelized Cost of Energy (LCOE) between 2010 and 2019 has shown that new unsubsidized wind and solar power are cheaper than some already running resources like coal, nuclear, and some gas.
For instance, Lazard’s data shows an unsubsidized utility scale solar power plant generating electricity at a cost between 3.6 and 4.4 cents per kilowatt-hour (¢/kWh), with mean value of 4.0 ¢/kWh. Meanwhile, nuclear can generate unsubsidized power at rates between 11.8 and 19.2 cents per kilowatt-hour (¢/kWh), with mean value of 15.5 ¢/kWh, according to Lazard. Between 2010 and 2019, the cost per megawatt-hour of nuclear has risen by 61 percent, while utility scale solar power has fallen by approximately 84 between same periods.
The dramatic historical LCOE decline of utility-scale solar PV and wind is in light of material declines in the pricing of system components (turbines, panels, inverters, etc.) and improvements in efficiency, among other factors.
The U.S. Energy Information Administration (EIA) defines LCOE as the average revenue per unit of electricity generated that would be required to recover the costs of building and operating a generating plant over its assumed lifetime. LCOE is often cited as a convenient summary measure of the overall competiveness of different generating technologies. Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs.
One other concern about renewables had been the variable nature of these energy resources, particular wind and solar. However, research have proven that it is feasible today, to have an all-renewable electric grid. The bit about renewable energy’s intermittency and dispatchability have long been solved, with the introduction of diverse forms of energy storage such as batteries, pump storages, and chemical technologies like hydrogen. As a result, wind and solar have become highly dispatchable with storage, making it a baseload source of energy.
In terms of time taken to build the two different facilities, Lazard finds that utility-scale solar takes nearly 9 months to complete, while nuclear may take nearly 69 months to construct. This means, when deciding to build solar versus nuclear power facility, a developer can bring online solar power in substantially less time and at much lower cost than a single nuclear project.
The construction delays are a big factor behind the rising cost of nuclear. The 2017 World Nuclear Industry Status Report had it that of the 53 reactors under construction in mid-2017, 37 were behind schedule. That 8 of those projects had been in progress for a decade or more, and 3 of those have been under construction for more than 30 years.
The other key factor boil down to safety and security of nuclear facilities. The nuclear industry has been shaped in many ways by its plants accidents, in terms of both cost and casualties. Serious nuclear power plants accidents including the 1986 catastrophic Chernobyl power station explosion in Ukraine, the 2011 Fukushima Daiichi plant disaster in Japan, and the SL-1 accident in 1961, have cast a shadow over the sector. Apart from these major incidents, there have been several life-threatening incidents recorded from numerous nuclear plants and facilities across the globe.
Additionally, the hurdles to investment in new nuclear projects in even advanced economies are daunting. Securing investment in new nuclear plants now require more intrusive policy intervention given the very high cost of projects and unfavourable recent experiences in some countries.
In summary, nuclear is expensive, takes too long a time to build, risky, and faces investment hurdles; compared to solar and wind power. Therefore, if the idea is about looking for power sources that offers a good opportunity to lower the cost of power for purpose of industrialization, then the choice of nuclear is wasteful and wrongly adviced.
More to the point, a comprehensive modelling of Ghana’s energy sources would reveal that it can satisfy Ghana’s electricity demands throughout the year with just a combination of renewables, hydropower, and battery storages.
Electricity from wind and solar more economical than nuclear – IES
Institute for Energy Security’s (IES’) review of data from the U.S. Energy Information Administration (EIA) and financial advisory and asset management firm Lazard, have revealed that generating electricity from wind and solar is more economical than nuclear. The potential savings attained by generating a set quantity of electricity from renewables as a substitute for nuclear power is revealed as close to 288 percent for wind and utility-scale solar photovoltaic (PV).
IES’ trend analysis based on Lazard’s Levelized Cost of Energy (LCOE) between 2010 and 2019 reveal that new unsubsidized wind and solar power were cheaper than some already running resources like coal, nuclear, and some gas. The cost decline is rendering solar PV and wind increasingly attractive resource relative to conventional generation technologies with similar generation profiles. The modelling shows that solar power on its own can beat Gas Peaker plants on their own, without storage, in most any market.
The U.S. Energy Information Administration (EIA) defines LCOE as the average revenue per unit of electricity generated that would be required to recover the costs of building and operating a generating plant over its assumed lifetime. It is often cited as a convenient summary measure of the overall competiveness of different generating technologies. Key inputs to calculating LCOE include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs.
Lazard’s LCOE comparison for various generation technologies on a Dollar per megawatt-hour ($/MWh) basis, is sensitive to factors such as U.S. federal tax subsidies, fuel prices and costs of capital. It must be noted that a key consideration for utility-scale generation technologies is the impact of the availability and cost of capital on LCOE values; reflecting essentially the return on, and of, the capital investment required to build them.
While capital costs for a number of “Alternative Energy” generation technologies are currently in excess of some conventional generation technologies, declining costs for many Alternative Energy generation technologies, coupled with uncertain long-term fuel costs for conventional generation technologies, are working to close formerly wide gaps in LCOE values. Lazard’s unsubsidized LCOE analysis has shown significant historical cost declines for utility-scale “Alternative Energy” generation technologies driven by, among other factors, decreasing supply chain costs, improving technologies and increased competition.
The 2019 report showed that at a high level, both solar and wind power have shown continued price declines, to outpace coal, nuclear, and some gas-fired power plants. The dramatic historical LCOE decline of wind and utility-scale solar PV is in light of material declines in the pricing of system components (turbines, panels, inverters, etc.) and improvements in efficiency, among other factors.
The IES analysis employs selected historical mean unsubsidized LCOE values from Lazard Annual reports. The mean LCOE reflects the average of the high and low LCOE for each respective technology in each respective year.
Lazard’s data suggests an unsubsidized utility scale solar power plant is going to generate electricity at a cost between 3.6 and 4.4 cents per kilowatt-hour (¢/kWh), with mean value of 4.0 ¢/kWh. This price has fallen by approximately 84 percent between 2010 and 2019. Over the period, utility scale solar power has experienced an average of 25 percent decline in cost per year. That decline fell to 13 percent over the last 5 years, and 7 percent between 2018 and 2019.
With wind, Lazard’s report indicates that it can generate power at a cost between 2.8 and 5.4 cents per Kwh, as it has fallen by roughly 67 percent between 2010 and 2019. Over the decade, unsubsidized wind power has seen an average of 11 percent decline in cost per year, a 7 percent fall per year over the last 5 years.
On the part of nuclear, Lazard’s report suggests it can generate unsubsidized power at rate between 11.8 and 19.2 cents per kilowatt-hour (¢/kWh), with mean value of 15.5 ¢/kWh. That between 2010 and 2019, the cost per megawatt-hour of nuclear has risen by 61 percent. Over the period, the cost of nuclear power has experienced an average increase of 5.7 percent per year. That increase, rose to 7.12 percent over the last 5 years, with the largest cost rise recorded as 27 percent between 2016 and 2017.
From the data analyzed, it is evident that the expected market value of electricity generated by nuclear power is greater than that of renewables, and this difference according to the National Renewable Energy Laboratory (NREL), will continue to increase through to 2050. The body on the other hand, projects utility solar PV and onshore wind cost to decline 60 percent and 30 percent respectively by 2050, from 2018 levels, assuming continued industry growth, and technological breakthroughs could cut costs up to 80 percent by 2050.
Among the three options reviewed, nuclear power is right at the top, with total costs in 2019 of US$155 per megawatt-hour ($/MWh), most of which involves capital construction costs. On the low ends are solar and wind power at US$40 and US$41 per MWh respectively.
The potential savings attained by generating a set quantity of electricity from renewables as a substitute for nuclear power is revealed as close to 288 percent for wind and utility-scale solar PV. Even without accounting for current subsidies, the cost of renewable energy have shown to be considerably lower than the marginal cost of conventional energy technologies such as coal and nuclear.
The IES analysis also does not take into account potential social and environmental externalities or reliability-related considerations. These includes but not limited to air-borne pollutants, nuclear waste disposal, and climate change. It is also does not take into consideration issues such as dispatch elements (e.g. baseload/intermediate load/peak), and location (e.g. centralized/distributed).
While utility-scale solar and wind power generation technologies are already cost-competitive with conventional generation technologies such as coal and nuclear, a key factor regarding the long-term competitiveness of these alternative energy generation technologies is the ability of technological development and increased production volumes to materially lower their operating expenses and capital costs, in the years ahead.