TheMarketForIdeas

More than before, people have become aware in an in-depth manner regarding global issues which not only define the present, but have also impacted recent decades, such as political instability, wars, pandemics, climate change, and, on top of these, a growing energy crisis, which is fueled by the rising demand of consumers and producers (with large corporations serving as both). The world has seemingly accepted the need for a less polluting, low-carbon intensive source of energy, as the fossil fuel usage declined by 2-3%, a modest percentage considering that the global energy demand has surged by 15% in the same period. Roughly 40% of this growth consisted of the so-called “clean” or “green” energy, which included sources like hydropower, wind, solar and also nuclear energy, which will be our main topic for this article.

Nuclear energy is a subject of intense debate in the context of the global energy transition. Although it is a rather controversial energy source, given the notable nuclear accidents that have occurred (having in mind, for instance, the 2011 Fukushima disaster, the worst nuclear incident since the Chernobyl catastrophe in 1986), the main reason why it has recently made a comeback is due to the fact that it is a source capable of producing the largest amount of energy, reliable in the long term, with very low carbon emissions and also extremely safe if the reactors are operated under optimal conditions. Although many are followers of this promising energy source, the perils associated with it are also recognized, risks to be addressed towards the end of the article, making a comparison with the economic advantages and drawing conclusions.

This article deals sequentially with the technical aspects, with reference to certain theoretical notions, then the energy mix on a global level, followed by an analysis of the cost differential between nuclear energy and other types of energy, and finally a case study on the risks and measures for their prevention will be presented, using as benchmarks examples of the most disastrous and well-known nuclear accidents in human history. The methodology used in carrying out the research behind this article involves several types of analysis: quantitative analysis (studying statistical databases by the National Institute of Statistics (NIS), Eurostat, World Bank Databank etc.), comparative analysis (initial costs, maintenance costs vs. environmental impact), and case studies (by observing the largest nuclear accidents), and documentary analysis.

The fundamentals of nuclear energy

To understand the role of nuclear, it is important to first understand how energy manifests in nature. Then we will move onto fission and fusion, the main processes implied in the nuclear energy generation. We are also going to take a brief look into fissile materials and the nuclear cycle of uranium.

Firstly, energy exists in two forms: a) potential – energy waiting to be used and b) kinetic – energy in motion (Bradley & Fulmer, 2004). In general terms, energy refers to the capacity of doing mechanical work. In nature, energy is always transformed. Consider, for example, a bricklayer moving a brick. The bricklayer’s body must convert energy from chemical to kinetic for the brick to move. In this process, energy was not created, nor destroyed, only transformed (Ferguson, 2011).

Then what is nuclear energy? Nuclear comes from the transformation of atomic nuclei, in similar words, the conversion of matter into energy. The processes which make it possible are called fission and fusion. In the simplest terms, fission is when a large nucleus splits into two smaller nuclei and fusion is exactly the opposite, two small nuclei combining into one large nucleus. In our history, we only had fission-based reactors, but currently there is an experimental fusion project in work called DEMO (formerly ITER), predicted for release in 2040-2050 and which could revolutionize the nuclear energy industry.

For a reactor to work, it has to be fueled with uranium, a “fissile material”, which goes through a nuclear cycle: 1 – mining and milling; 2 – conversion and enrichment; 3 – fuel fabrication; 4 – reactor operation; 5 – spent fuel management (permanently stored or recycled). Although it is a labor-intensive process, this cycle yields significant results.

The contribution of nuclear in the global energy mix

Figure 1 displays electricity generation (TWh) from major energy sources (coal, gas, oil, nuclear, hydro, solar, wind, bioenergy), recorded during the period 1985-2023. Figure 2 shows the share of the global energy mix in the year 2023. The largest portion of this share belongs to coal, followed by natural gas – which saw a rapid growth; additionally, hydropower holds a large portion, but remains weather-dependent.

Finally, we get to the energy which piques our interest, nuclear energy. We observe in Figure 2 that is has a percentage of just 9% globally. Also, Figure 1 tells us that electricity generated from 1985 to 2000 rose by approximately 1100 TWh, while in the period 2000-2023 it advanced by just 162 TWh, a very small growth, considering that we use more electricity these days. Why did this happen? There are a lot of answers to this question, one being that governments have replaced nuclear with “more viable” alternatives, and the other being that historical accidents have affected the public opinion. A large part of the market was taken by natural gases, due to price drops and technology advancements. Prognoses in 2001 predicted that “gas market share would double in two decades” (Bradley & Fulmer, 2004). Despite its pollution, coal remains dominant, a share that could have been taken by less polluting alternatives like nuclear. However, some countries have decided to change their energy distribution with nuclear for the next years. A notable example is China, with 28 reactors in construction, as we will see in Figure 3.

In this representation, we also see that US leads the course (with 94 operational reactors), followed by China and France (each with 57), then Russia (36) and South Korea (26). It is important to know that countries like Japan, United Kingdom or Germany have most of their nuclear reactors shut down (Germany has all of them shut down), and could have surpassed South Korea. Germany is a noteworthy example of “anti-nuclear feeling” derived from the historical nuclear disasters (though notably none on German soil). Their “Atomausstieg” policy ordered all 33 nuclear reactors to be shut down by April 2023 and was largely the political result of the Fukushima disaster in 2011 (World Nuclear Association, 2024). Thus, the majority of electricity still comes from carbon-rich polluting sources. Governments maintain this “anti-nuclear” stance, despite statistics showing most deaths are caused by the fossil fuel air pollution rather than “peaceful nuclear energy, which – when operated safely – releases extremely small amounts of radiation into the environment” (Ferguson, 2011). It is also noteworthy that some countries, such as Italy and Greece, have had referenda which curtailed the possibility of the use of nuclear energy, with Italy even having fully constructed reactors ready to begin operation at the moment when the public referendum took place and prevented startup. These countries, including Germany, nevertheless have imported electricity from other EU Member States when needed, including from highly pollutant sources like coal or from nuclear.

Comparative analysis between wind and nuclear energy

We have conducted an analysis on nuclear and wind energy costs, identified how much electricity they produce during their lifetime, and calculated the levelized cost of energy (LCOE) to see which one has lower costs short-term vs. how the other source reacts in the long-term. To harmonize the measurements, we are going to use the capacity of 1000 MW for each electricity generator. According to Lumify Energy (2023), the approximate construction cost of a 1 MW wind turbine was evaluated at 1,155,736$. If we multiply this by 1000, we would get a result of 1,155,746,000$ per 1000 MW wind farm. The same principle applies for the operation and maintenance (O&M). For 1000 wind turbines we get a cost of 58,138,000$. We also took into consideration the license, which was estimated at 0,32% from the initial construction, electricity network connection (9% from the initial construction) and their life expectancy of 20 years. Now, if we sum up all the cost and multiply them by the life expectancy, we get a lifetime cost of 2,426,221,000$, as seen in Table 1. The energy produced was calculated in a similar way and can be seen in Table 2 (RETGEN, 2024). If we divide the final total costs by total energy, we get a LCOE value of 48,52$/MW. It should be noted that already most onshore wind turbines are in the 2-3 MW range and will likely get bigger to improve efficiency up to a point.

For the nuclear energy, we have chosen to break down the costs of Olkiluoto-3 Finland EPR nuclear reactor, one of the cheapest nuclear reactors. While nuclear reactors have a life expectancy of 40-50 years and some refurbished ones last even 80 years, we’ll adjust their lifetime to 20 years, so that we can harmonize the values with the wind energy, for the sake of the calculation. There are also the subsidies, which we did not take into account, but can significantly reduce the costs, and also the interest rates, which may have the opposite effect. As shown in Table 3, the initial costs were estimated between 2-3 billion dollars (Dalton, 2023), but finally revised, due to significant delays and cost overruns, to 11 billion dollars with annual O&M of 200,000,000$ (nuclear-power.com, 2023), license (270,000,000$) and integration to the network (216,000,000$). We got a total cost of 15,486,000,000$ and the energy produced estimated at approximatively 240,000,000 MWh (set prudently below the industrial standard 97%). By dividing these two we get a levelized cost of energy of 64.52$/MWh.

The above calculated value resonates with the estimates by the International Energy Agency (IEA) and the OECD Nuclear Energy Agency (NEA) of LCOE for new nuclear power plants at approximately $69 per MWh, assuming a 7% discount rate. Also, the calculations reflect a more than double than the “best”/”ideal” estimates for the OL3 nuclear reactor, which are in tone with the observed costs for existing nuclear plants ~32$/MWh).

For matters of national comparability, we found the calculations are consistent with the LCOE estimates for Finland (wind energy) – ~$32–$65 (based on the U.S. National Renewable Energy Laboratory (NREL) general estimates and subject to variability due to weather conditions) –, yet significantly under the estimated cost for nuclear energy – ~$75–$115 (as new projects might face severe economic challenges under current market prices).

Interpretation

In our basic calculations, we obtained a lower LCOE for the windmill farm, so from an economic point of view this makes the wind farms seem more profitable, at least in the short-term. However, the EPR reactor is more profitable in the long-term, given that it has a life expectancy of 60-80 years (Bass, 2023) and given that construction delays, financing challenges, and regulatory hurdles are (expected to be) absent from the landscape. The nuclear reactor is also more compact, occupying only a small fraction of the land, compared to the wind farm which requires thousands of hectares to work, has a massive impact on the habitat, especially with the birds getting injured in the blades and there is also the cost of the infrastructure (mining, rare earths, cement etc.). The windmills can also be very volatile, working only 30% of the year in the best-case scenario, the industry standard being 20%, when a nuclear reactor can operate on average 97% of the time. Another point for nuclear reactors comes from the developing technology, with the 4^th generation of fission-based reactors on the way, and also the ones based on fusion processes. With the help of governments and private corporations, nuclear energy could surely become a durable and more economical source of energy in the future.

Three nuclear accidents, consequences and measures

The Kyshtym disaster occurred at the Maiak nuclear power plant in the USSR in 1957. The power plant was built in a hurry, without a deep base of knowledge of the technology used. Due to a malfunction in the cooling system of a buried tank, the reactor exploded, releasing a radioactive cloud, which had 40% more radioactivity than Chernobyl. Over 23,000 km² were contaminated and 10,000 people were evacuated (Lewis, 2025). The toll of people affected by radiation and the economic impact are not completely known because the Soviet Union decided to hide the information from the public.

The Chernobyl plant consisted of 4 reactors, put into operation between 1977 and 1983. The disaster occurred on the night of 25-26 April 1986, following a poorly planned experiment at unit 4. The reactor was forced to operate at 7% of its capacity, while simultaneously disabling the safety and control mechanisms. This made the reactor very unstable and the fission chain reaction got out of control which made the reactor explode. Following the explosion, a significant amount of radioactive material was released in the air. The number of victims from the explosion is not exactly known. The Chernobyl incident caused direct economic losses, which were manifested in the costs of sealing the reactor, resettling local residents, social and health protection for the affected population, monitoring and reducing environmental radiation, and the disposal of radioactive waste, borne by today’s Ukraine (IAEA, 2006). In total, the damage caused by the Chernobyl catastrophe was estimated at approximately 235 billion dollars (Ministry of Foreign Affairs of Belarus, 2009).

A more recent accident was Fukushima, in Japan (March, 2011). It happened on the Honshu Island, where the nuclear power plant was located. Following a 9.1 magnitude earthquake, a huge tsunami flooded the entire Fukushima facility, shutting down the emergency systems and destroying the backup generators. Fearing the danger of a disaster, the Japan Association for Nuclear and Industrial Safety began the appropriate procedures, contacting all the nuclear power plants from Japan to assess the situation at Fukushima. An explosion occurred at reactor 1, leaving the core intact, followed by an explosion at reactor 3. Eventually, the entire Fukushima area was quarantined (The Infographics Show, 2019). Fukushima was one of the most expensive natural disasters, causing direct economic losses of 211 billion dollars, including housing, infrastructure destruction and other asset losses. In the Tohoku region, 656 companies went bankrupt, but the economic disaster was not limited to this region, also affecting the economy as a whole. The tertiary effects were also quite notable, if we take into account Japan’s rejection of nuclear power in the next 13 years and Germany’s nuclear shutdown. These entailed significant financial, environmental and competitive costs. We learned from Fukushima that we should continuously improve safety measures, especially against natural disasters, and that controls should be made much more rigorous.

Conclusions

Nuclear energy is one of the most complex energy sources of this era. Its benefits are undeniable: it is a dense, reliable and extremely low-carbon energy source, essential in the fight against climate change. However, the associated risks, namely nuclear accidents, high initial costs, waste management remain aspects that can be improved.

A starting point could be massive financial investment in the nuclear sector, both from the state and private companies, in terms of technology and safety, for greater efficiency, with reduced costs and minimized risks. Although we have not given it enough importance in our research, small modular reactors could be the solution to the energy problem, especially in underpowered outskirts. Romania itself is one of the two SMR sites in Europe.

The case studies highlight an important aspect, namely the human factor, which has played an important role in all historical disasters: in Kyshtym, design negligence and lack of transparency, in Chernobyl, design errors and irresponsible decisions, and in Fukushima, the lack of anticipation of natural disasters.

In conclusion, the future of this energy source is determined by its ability to overcome economic challenges and regain people’s trust. Even if it will not become the only solution, nuclear energy remains an essential solution for a balance between environmental protection and sustainability.

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