Nuclear Power & Its Potential Impacts on Economy
Climate change. The energy crisis. Global warming. Despite being some of the most relevant problems that our world faces, they are consistently pushed into the shadows. Our supplies of fossil fuels are diminishing rapidly and deteriorating our atmosphere. Billions of tons of carbon dioxide are released into the atmosphere every year as a result of coal, oil, and gas production. We are producing greenhouse gas emissions at a record high rate of 409.8 ppm. A possible solution exists in the form of renewable energy.
We’ve heard the term renewable energy thousands of times: It is carbon-free? Is it better for our environment? If so, why do we not implement it as much? The problem is that the supply is simply unable to meet the demand. The supply is often quite dependent on the weather (think of wind turbines and solar panels, for example). Many environmentalists have pointed out these problems, including James Hansen, a former NASA scientist and advocate for renewable power. In his words, renewable energy sources “cannot scale up fast enough” to deliver the amount of cheap and reliable power the world needs, and "with the planet warming and carbon dioxide emissions rising faster than ever, we cannot afford to turn away from any technology" that has the potential to reduce greenhouse gases. The proposed solution is nuclear energy.
The term ‘nuclear energy’ does raise a few eyebrows. Think of the disaster of Chernobyl in 1986 that sprayed radioactive matter across Europe, and the Fukushima Daiichi disaster in 2011, which affected South Asia. However, as time and technology progress, so does the safety of these reactors, with no major design-related explosions or problems in recent decades, which does it make it safer. Not only that, but it does not produce any CO2 emissions; only radioactive waste that needs to be stored. They are also the most reliable sources of energy, operating 93% of the time and work with small amounts of plutonium and uranium, which means they will be usable for hundreds of years. So, what does nuclear energy mean for the economy?
Worldwide, over 150 new nuclear plant projects are in the licensing and advanced planning stage, with 65 plants currently under construction. As a result, the Department of Commerce estimates the global market for nuclear products, services, and fuel to be at $500-$740 billion over the next 10 years. One of the best countries to analyze the economic impact of nuclear energy is the USA, due to it having a large number of nuclear plants already (23). The USA is also a major world superpower and could be the key to influencing other countries to adopt nuclear energy. The demand for electricity in the world, especially in the US is thought to increase rapidly, with an increase of over 20% by 2035, and nuclear power seems to be the best way to supply those needs in a sustainable way.
Looking at America, the first hurdle to overcome is the high initial cost of building a nuclear reactor. It takes around an estimated investment of $6-8 billion. Nevertheless, such a large project does provide a significant number of jobs for skilled laborers, construction workers, engineers, project managers, etc. It has created over 15,000 new jobs requiring over 3,500 construction workers at peak construction. Not only does this mean that the unemployment rate decreases, but as more and more people become employed and work at nuclear reactors, jobs are created, their standard of living increases and more tax is collected to fund future developments and advancements in renewable energy.
Even after construction, there are huge societal impacts. First of all, people get a reliable source of energy, while also significantly lowering their carbon footprint, and working towards lowering CO2 emissions. After its completion, due to the sheer size and skill needed to operate a facility this technologically advanced, it employs over 500-700 employees full-time, paying more than 36% more than average salaries. According to one analysis, nuclear plants create the largest workforce annual income based on both large capacity and being a labor-intensive technology. Furthermore, these provide even more jobs due to the equipment needed to construct and continue to run it, having a further impact on society and even the wider nation. All of the equipment and supplies come from US suppliers, which only helps economic growth. The 104 nuclear plants generate over $40-50 billion each year, from electricity sales alone. From this revenue, nuclear companies acquire over $14 billion each year in materials, fuel, and services from domestic suppliers. Materials, fuel, and services are received from over 22,500 different suppliers from across the USA. There are huge positives for all of society through investment in a nuclear plant, especially while it also helps shift the burden on finite resources such as fossil fuels.
Looking at the IMPLAN input/output model table, we can see that for each dollar of output from the nuclear facility, the local economy produces $1.04, and during one year of operation is 1.18 for the state and 1.87 for the United States, which can then be seen for labor income. If we then look at employment itself, the local direct and indirect is 1.66 (528 direct and secondary jobs divided by 319 direct jobs). This shows that for every 100 direct jobs from the nuclear facility, the local economy produces an additional 66 indirect and induced jobs. This then means that for every 100 direct jobs at a nuclear plant, another 726 indirect and induced jobs are created throughout America, which we can see at the bottom of the table.
Overall, by looking at the US, we can see that there is a considerable increase in the number of jobs, both direct and indirect, and even though it has a very high initial cost, these are often recovered in around 5 years, and there are significant benefits for society and the nation that does turn to nuclear power, and it also plays its part in reducing the dependency on fossil fuels and the impact of global warming.
Furthermore, if we look at other countries, we can compare the LCOE and system costs in 4 countries. The LCOE is the Levelized Cost of Electricity (LCOE). It is the total cost to build and operate a power plant over its lifetime divided by the total electricity output from the plant over that period, which is more commonly known as the cost per megawatt-hour. As we can see in numerous countries, nuclear has very low system costs, which is due to its low maintenance costs, which are significantly lower than fossil fuels, as once the nuclear fission starts in the reactor, there is very low maintenance needed. Nuclear energy also has the lowest LCOE in many countries, which shows that despite the very high initial spending, it is one of the cheapest sources of electricity, beating even coal and gas with its low costs in some countries, which shows that after construction, it becomes more profitable over a longer period of time.
Nuclear power might just be the savior to the world’s energy crises if the world is willing to accept it. Many people have turned away from the benefits of nuclear energy due to the disaster of Chernobyl, but that was one catastrophe that forced nuclear reactors to become much safer and better, and now they could potentially alter our dependence on fossil fuels. Their major concern is the storage of radioactive waste and its potential long-term impacts, but these are often mitigated as they are stored within the facility to lower potential impact on the environment. If we look at the positives, it produces no CO2 emissions, inherently ending the threat of climate change, while also being one of the most reliable sources of electricity. Despite a high initial cost, it remains one of the cheapest and one of the only sources of energy that can feed out only increasing demand for electricity with some of the lowest LCOE and very low maintenance costs. If we also look at its further impact, it benefits all of society through its creation of direct and induced jobs, bringing in revenue through electricity sales, and progressing the national and even global economy through job creation and new markets as the trade for nuclear fuel, materials and energy becomes more and more commercialized. Nuclear energy may be the most effective solution for a society unwilling to change its habits to fight climate change, while also creating jobs and economic growth, which could be seen as a win-win situation for both environmentalists and economists.
If you found this article, please share it: