Uninsured nuclear power plants – the hidden cost

As the costs mount from the Fukushima nuclear accident, more observers are wondering if we can afford the potential for economic fallout from the production of nuclear power.

Our globe is now home to over 400 nuclear power plants – many of which have little or no insurance coverage against accidental damage.

Why is nuclear energy attractive?  It is clean  with low greenhouse gas emissions; it’s reliable and sustainable with uranium deposits existing in politically stable regions like Canada and Australia; and it is relatively cheap – but only after the heavy up-front capital costs are absorbed.

But the threat for massive financial damage – not to mention significant injury to life and the environment – always lurks in the case of a mishap.  Governments have typically walked an economic tightrope: the reduced costs of energy production have to be balanced with the financial – and human – risk of nuclear catastrophe.

To keep costs down, most governments have self-insured their nuclear facilities.  Simply put, the global insurance market charges premiums commensurate with the measurement of potential risk.  Governments, unwilling to pay those premiums (which would render nuclear power less cost-effective), choose to shoulder the risk (in whole or in part) themselves – or more accurately, have their taxpaying citizens do so.

But it could be argued that the true cost of nuclear power is known only after the total cost of an accident is factored in.

Consider:

• 1979 Three Mile Island, Pennsylvania –  US$2.4 billion*
• 1986 Cherynobyl, Ukraine – US$6.7 billion*
• 1985 Athens, Alabama – US$1.8 billion*

*Property damage cost estimates include property damage, emergency response,                                                        environmental remediation, evacuation, product loss, fines, and court claims.

(sourced – Wikipedia)

In addition to the costs resulting from the March 11^th earthquake and tsunami, the nuclear damage is expected to far exceed the amounts noted above; and because of Japanese population density, the potential human toll is unimaginable.

But clearly, the economic price-tag of the Fukushima nuclear incident is years from being quantified…and paid for.

~ other source – ILSTV.com

Tags: coverage, damage, energy, environment, insurance, Liability, meltdown, nuclear, premium, risk, safety, uninsured