Abstract
Quantification of nuclear liability insurance is difficult without arbitrary liability caps; however, post-mortem calculations can be used to calculate insurance costs. This study analyzes the Fukushima (Daiichi) nuclear power plant disaster to quantify the cost per unit electricity ($/kWh) of nuclear energy from the lifetime of the plant after accounting for the true cost of the liability needed to cover the damages from the nuclear disaster determined from news reports. These costs are then compared to the cost of electricity currently paid by Japanese consumers, and then are aggregated to determine the indirect subsidy for nuclear power providers in both Japan and the USA. The results show that the reported costs of the Fukushima nuclear disaster are $20–525 billion, which results in a real insurance cost from the lifetime of electricity produced at the plants between $0.22–5.78/kWh. These values are far higher than the current insurance costs by Japanese law of $0.01/kWh and even the total costs consumers pay for electricity. Although the spread in the input costs is large and the reported metrics are incomplete, the nuclear insurance subsidy is clearly substantial in Japan and in the USA. Ideally, energy sources should be economically sustainable without the need for a government insurance subsidy. For the electricity market to function effectively and efficiently in all other countries using nuclear power, the insurance costs should be reported accurately and included in nuclear electricity costs without arbitrary government liability caps.
Highlights
In the event of a nuclear accident, liability insurance protections on nuclear reactors must be able to provide adequate monetary funds to fulfill public claims of personal injury and property damage
As there is no payment unless a catastrophe occurs there is no direct subsidy, but this public cost burden is an indirect subsidy because the costs of operating a nuclear power plant would be far higher than currently accounted for if full accident liability were to be taken into account
This paper provided a review of the potential cost implications for nuclear power that result from a substantial nuclear disaster
Summary
In the event of a nuclear accident, liability insurance protections on nuclear reactors must be able to provide adequate monetary funds to fulfill public claims of personal injury and property damage. The PAA requires all private non-military nuclear facilities in the USA to supply a maximum allotted primary liability of $375 million [3]. This arbitrary upper limit allows nuclear energy facilities to acquire liability insurance. While low-probability risks are familiar in many disciplines such as structural and safety engineering, insurance, financial and electricity markets, and climatology [5], this kind of statistical analysis has, seldom been applied to economics of nuclear liability This represents a significant impediment to enabling the free market to appropriately choose an electricity source based on full costs.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
