Power Shift: The Deployment of a 21st Century Electricity Sector and the Nuclear War to Stop it

Abstract

This paper presents a comprehensive analysis of the ongoing battle between two very different visions for the future of the electricity sector:• the 20th century model of central station, baseload/peak-load generation that passively follows demand, • the emerging 21st century, decentralized model based on coordinating and actively integrating distributed supply with managed demand using advanced information, communications, and control technologies.The paper demonstrates that the current conflict between the dominant incumbents, led by nuclear power on the one side, and the new entrants, on the other, has reached a crucial turning point that will deeply affect the speed of the transformation and the ultimate structure of the 21st century electricity system. The analysis reviews the cost estimates for almost two dozen resources, estimates that continually change significantly because of rapid technological developments. The analysis includes demand-side efficiency as a resource of equal importance with supply-side resources. The most recent estimates indicate that low costs for decentralized alternatives, efficiency, wind, solar, and storage technologies, combined with the rising costs of nuclear power, have rendered power from new nuclear reactors two to three times more costly than the alternatives. Indeed, it shows that nuclear economics have deteriorated so badly that even aging nuclear reactors are no longer competitive with new distributed alternatives. The economic characteristics of the alternatives – size, construction period and cost – combine to make them much more attractive from the point of view of risk. With smaller, quicker to market assets with much smaller sunk costs available, a portfolio approach to acquiring low carbon resources that minimizes risk or price leaves nuclear power and “clean” coal out of the mix. The renewable resource base is huge, orders of magnitude larger than the projection of need. Converting technical potential into a resource portfolio and a stable, working system is the challenge for policy. There is a strong consensus in the financial, academic and trade literatures that the tools to operate the 21st century electricity system are in hand.Not surprisingly, utilities that are deeply invested in large central station generation see the distributed alternatives as a severe threat to their interest. They have responded by launching an all-out attack on the alternatives on several fronts. These points are demonstrated by a detailed examination of the key issues in the current debate in two specific examples, nuclear power efforts to obtain subsidies and extend the licenses of existing reactors.