Nuclear Power Poor Economic Choice
In recent months several arguments have been made in support of building
nuclear power plants in Saskatchewan. Many of these arguments are based
on the assumption that nuclear power will act as a driver of economic
development. I would like to argue that nuclear power is actually a
poor choice for stimulating economic development, and that building
such a facility in the province may actually harm the economy in the
First, nuclear power is only cost effective as a source of electricity
when it utilizes large reactors. By taking advantage of the economy
of scale, nuclear plant operators can cut construction and operating
costs significantly. Most of the commercial nuclear plants in Canada
operate with several large reactors on-site that produce around 600
MW of electricity per reactor. Since Saskatchewan’s total electricity
demand is around 3000 MW of electricity, one nuclear plant could provide
a very high percentage of the overall need. As a result, many of the
other modes of producing electricity in the province would become less
necessary, and there function as drivers of local economies depressed.
Second, nuclear power plants are not good drivers of economic development.
Although during the construction phase many skilled workers are employed,
a nuclear plant requires relatively few workers to operate it. The
cost of building these facilities is often very high, and cost over-runs
are common. Although Saskatchewan has ample reserves of uranium ore,
the cost of uranium is a small fraction of the total cost of running
a nuclear plant. In short, building one nuclear power plant in Saskatchewan
would cost billions of dollars and constrain the opportunity to develop
other technologies for decades to come.
Third, the experience of Ontario with nuclear power should teach us
some valuable lessons. Before splitting into several different companies
in the late 1990s, Ontario Hydro posted a debt of close to $40 billion.
Much of this debt came from building expensive nuclear plants. As these
Ontario power plants aged, there reliability declined and operating
costs increased dramatically. When one considers the cost of construction,
operation, and eventually waste disposal and reactor decommissioning,
the economics of nuclear look less attractive.
Fourth, those who argue for building nuclear capacity in Saskatchewan
assume that more electricity is needed. An examination of demand for
electricity shows that growth is flat. Residential, farm, and commercial
users have been consuming the same amount of electricity for several
years. The biggest increase in demand comes from industrial users (e.g.,
the oil and gas industry). Why should the people of Saskatchewan take
on the risks associated with nuclear power to satisfy one segment of
Last, other sources of electricity production function as stronger
drivers of economic development than nuclear. Hydro electric projects
provide opportunities for northern communities in Saskatchewan to benefit
from local construction projects. Wind generation projects provide
partnership opportunities, and have economic advantages (e.g., credits)
associated with producing “green” electricity. Biomass
facilities for producing liquid fuels like bio-ethanol and bio-diesel
have the power to transform rural economies. Coal plants have significant
local benefits to communities that mine coal and operate them. Reserves
of coal are plentiful in Saskatchewan, and new technologies are being
developed to make coal emissions more environmental friendly, and to
store and utilize carbon dioxide. Nuclear power centralizes power production
and destroys the opportunity for all of these other technologies to
provide local economic and social benefits across much of the province.
We develop nuclear at our own peril.
With permission from
Dr. Michael D. Mehta is a Professor of Sociology at the University