Last Energy

The Price of Power

How nuclear can reduce both carbon and costs in our most energy-intensive sectors

Jenna Wood

Every action requires power. Flipping on the lights in the morning, a quick trip to the grocery store; even the ability to eat an avocado in November. Sure, it’s probably not the ripest avocado you’ve ever eaten, nor the tastiest. Nevertheless, these are privileges afforded by our current energy sources, which power a culture of consumption – at a cost.  

When we look at the costs incurred by the most energy-intensive sectors, nuclear energy could be one of the cleanest, least expensive, and most sustainable options; and when it comes from proven reactor technology, it promises the most abundance.  

When Energy is Abundant, Cost Doesn’t Matter

Today, every system with a positive carbon footprint can, at most, replace a worse energy source. But without abundant, affordable, and carbon-free energy, we can’t fuel the technology “to subtract from the carbon damage we've already done,” argued Bret Kugelmass at the 2019 American Climate Leadership Summit.  

In his case for more energy, journalist Matthew Yglesias makes a complementary claim. What does carbon-free and truly abundant energy look like? It’s nuclear, Yglesias says – and with more nuclear, we can fuel our global energy demands and even invoke an era of “energy abundance.”  

In this era, we don’t need to worry about energy, whether it’s powering a two-minute car ride or an aircraft carrier. Alternatively, we’d generate vastly more energy than we currently use – and make it zero-carbon. In this “fanciful” future, both heavy industry and daily activities are energized by small modular nuclear reactors (SMRs) and microreactors. These technologies are fueled by naturally abundant uranium, which further incentivizes nuclear from an energy security perspective.  

How is this scenario possible? First, it requires an awareness of our global “energy diet,” as coined by Yglesias. Instead of raising our ambitions for clean energy production, we’ve restricted ourselves to the current model, in which the energy requirements for new inventions – ones that might improve human living standards – are generally too high. Historically, we invent new ways to do things by burning coal and oil, enabling the combustion of more coal and oil; but environmentally and geopolitically, we can’t sustain this trend.  

The goal is not necessarily to replace 100% of all “dirty” energy, Yglesias writes, but instead generate vastly more energy than we are currently using and make it zero carbon.

Where Is All That Energy Going, Anyway?  

Given our current energy diet, the idea of abundant energy is compelling – but why do we need so much energy?

In short: both the world population and economy are expanding, and energy needs are rising. Even at an individual level, the energetic demands of everyday life are significant – and pricey.  

While it’s difficult to quantify the exact price of power in various contexts, the following categories represent some of the most energy-intensive sectors in the global economy, as well as the biggest spenders.  

Within these sectors, some opponents of nuclear argue for a “renewables only” approach to the clean energy transition – but without adding nuclear to the mix, we’re concocting a recipe for climate disaster.

1. Transportation

To commute to work or get that avocado to the kitchen, energy users must fund the costs of transportation. Major fuel sources for transportation include biofuels, natural gas, and electricity, and petroleum products, which dominate the global transport sector: among U.S. vehicles alone, petroleum accounted for 90% of energy usage in 2021. Beyond the daily commute to work or school, global transportation demands labor, equipment, fuel, and shipping infrastructure – and therefore, substantial funding.

According to the U.S. Department of Transportation, U.S. households spent an average of $10,961 on transportation in 2021: a major expenditure, second only to housing costs. This number coincided with a 36% increase in the cost of all forms of gasoline for private transportation in the U.S., again based on 2021 data.  

Whether public or private, transportation leaves a noticeable footprint, both economically and socially. Road congestion, air pollution, urban sprawl and the use of motor vehicles contribute to carbon emissions, as well as traffic accidents and the dissolution of communities. Globally, these costs can add up to more than 10% of a country’s gross domestic product.  

While electric vehicles are often positioned as the key to sustainable transport, their manufacturing costs alone are enough to give pause. These vehicles are more expensive to manufacture than their gas-powered predecessors, especially after costs increases in lithium batteries.  

The battery manufacture is potentially the most expensive and polluting part of an electric vehicle’s lifespan. Yet even in operation, the hidden environmental costs of electric vehicles limit their viability. For electric cars to be truly “green” as well as cost-effective, the electric grid itself must be clean. If the grid still relies on fossil fuels, so do EVs – which means they still produce carbon emissions.  

2. Residential Energy

Home is where the heart is; but for many of us, it’s also where we use the most energy and spend the most money.

In the U.S., more than half of residential energy powers heating and air conditioning. The U.S. Energy Information Administration (EIA) reported that water heating, lighting, and refrigeration accounted for 27% of total annual home energy use in 2015. Another 21% of energy powered residential devices, including televisions, cooking appliances, clothes washers, and clothes dryers, and recreational electronics, like tablets and smartphones.

Electricity and natural gases are the most-used residential energy sources in the U.S., according to the EIA. Costs for these sources as well as other common fuels, like liquid fuel and solid-biomass, are difficult to compare unless related to a common measurement. That said, the International Energy Agency (IEA) notes that residential electricity prices are generally higher and also vary more across countries than the electric prices for industrial purposes.

3. Commercial Buildings

Commercial buildings are commonly powered by electric, natural gas, liquid fuel, and/or solid-biomass. These buildings may include your workplace, doctor’s office, church, hotel, and local gas station, to name just a few.  

According to the 2018 Commercial Buildings Energy Consumption Survey (CBECS), U.S. commercial buildings spent $141 billion on energy in 2018. While more research is needed to understand commercial energy usage in other countries, these buildings universally demand large amounts of energy for both heating and cooling systems. In most countries, reducing the carbon footprint of buildings is crucial to any policy aiming to reduce carbon emissions.  

4. Heavy Industry

Heavy industry poses one of the greatest threats to net-zero carbon emissions. According to the Center on Global Energy Policy, heavy industry produces about 22% of global CO₂ emissions; yet it’s a critical supplier of cement, steel, petrochemicals, glass, surgical supplies, and other essential materials for human life. Roughly 40% of global emissions from heavy industry come from the combustion of fossil fuels, which are often cheap and readily available.

Nuclear offers a low-carbon alternative to meet the energy demands of heavy industry – and at a lower cost. Compared to the volatility of fossil fuels, nuclear energy could become more economically competitive due to the low and stable cost of uranium: an observation that applies to heavy industry as well as the previously mentioned sectors.

Everyday Energy: Food, Water, and Air  

Heavy industry, commercial and residential buildings, and transportation take a collective toll on global energy reserves -- but at the most basic level, we can simplify our energy needs in terms of food, water, and air. As individuals, it’s hard to measure the energetic value of these everyday needs: yet from a global vantage point, they’re some of the most energy-intensive human activities.

Vertical farming, for instance, promises to reduce the amount of land and water required to produce fresh, chemical-free produce -- but of course, the lamps used by vertical farmers to expedite plant growth require lots of energy. Vertical farming consumes more energy than traditional farming, and even new LED lamp technologies are not as efficient as old-fashioned sunlight.

Vertical or horizontal, all farming relies heavily on water. As more regions face water insecurity, desalination is an increasingly hot topic: it’s a critical development for farms as well as human consumption. As you might expect, it’s also energy-intensive: in the Middle East, for example, desalinated water accounted for just 3% of the region’s water supply but 5% of its total energy consumption in 2016, according to the IEA.  

And without air, we certainly can’t drink or eat. Climate advocates highlight the potential of direct air capture (DAC) to remove carbon from the air. Although government support for DAC research and development is growing, the technology for DAC is incredibly energy intensive. In its current state of development, a growing number of researchers argue that it’s illogical to use DAC as an energy-saving strategy, as it could accelerate the depletion of limited fossil fuels.

The “Real” Price of Power: Running the Numbers on Nuclear  

Within any of these sectors, most consumers only see the numerical price of production. Yet these numbers don’t always account for the health, environmental, or national security costs of fossil fuels and other dirty energy sources. When we consider these elements alongside the numbers, we’re left with the real price of power – and while this price permits our current standard of living, it’s not sustainable. To fuel a life worth living, we need clean, affordable energy that scales to meet global demand.  

Nuclear energy rises to the challenge. According to a 2020 report on global electricity costs by the IEA, nuclear is the most “dispatchable” low-carbon technology with the lowest expected costs in 2025. Compared to other primary sources of energy – including geothermal, natural gas, hydropower, coal, and wind – nuclear also has the highest capacity factor of 92.5%, meaning that plants produce maximum power more than 92% of the year.  

Once they’re up and running, plants are relatively cheap to operate, and their applications are flexible: in addition to electricity, heat from nuclear can also warm households, fuel heavy industry, and purify water. Moreover, the price of uranium is less variable than the cost of fossil fuels, providing better insurance against price exposure in the global market.

Less Space, Bigger Savings, and More Energy

To estimate the average cost of different types of energy, analysts often use Levelized Cost of Energy (LCOE). Applied to nuclear plants, the LCOE quantifies the cost to build and operate a plant over its lifetime, divided by its total electricity output during that period. LCOE also accounts for the capital costs, which include site preparation, construction, manufacture, commissioning, and financing a nuclear plant.  

Using LCOE, Lazard, a global financial advisory and asset management firm, calculated that utility-scale solar and wind costs around $40 per megawatt-hour, while nuclear plants average around $175 megawatt-hour.  

However, these numbers don’t account for the reliability and efficiency of various energy sources. Compared to the intermittency of renewables, which produce energy only 20% of the time, nuclear generates far more power with less land: 31 times less than solar facilities and 173 times less than wind farms, according to the Nuclear Energy Institute.  

Energy That Keeps On Giving

With these numbers in mind, companies like Last Energy innovate the distribution of already-proven nuclear reactor designs, rather than the plants themselves. More complicated plants, after all, tend to cost more time, money, and human resources.  

Leaner” alternatives, like the PWR-20 by Last Energy, are smaller in design and production costs: in fact, Last Energy sells power-purchase agreements (PPAs) as opposed to power plants, ensuring that customers only pay for the power they actually receive. The PWR-20 by Last Energy maintains an uptime of 95%: meaning that every six years, there are only three months when the reactor doesn’t produce energy.  

With standardized, fully modular, and factory-made reactors like the PWR-20, proven nuclear technology rolls off the assembly lines and deploys energy on-time and on budget – and customers know what they’re paying for, both numerically and conceptually. It’s a set dollar amount, but it’s also an investment in an energy source that keeps giving, rather than limiting themselves to a restrictive energy regime.  

The World Needs Energy – Which Means It Needs Nuclear

In the lifetime of a nuclear plant, energy users receive more reliable, affordable, and sustainable energy.– i.e., very low greenhouse gas emissions – to fuel the productions of daily life, on both a personal and global stage.

And while we need lots of energy now, we’ll require even more in the future. The World Nuclear Association (WNA) notes that global demand for electricity is increasing about twice as fast as overall energy use, and will likely rise by more than half to 2040. Currently, nuclear provides about 10% of the world’s electricity, but it’s poised to play a larger role in the production of clean, reliable electricity on a global scale.  

The price of nuclear technology is, of course, monetary – but it’s also a matter of time. In a 2019 report by the IEA, energy experts conclude that failing to invest in nuclear now will increase the costs – and sheer difficulty – of transitioning to clean energy in the future.  

Motivated by the swell of global energy demands, Last Energy uses its “off-the-shelf” approach to simplify the deployment of nuclear energy. This process is simpler, sensible, and cost-effective; and most importantly, it can happen sooner.