Nuclear Energy

Foundations of Business




Nuclear energy – both at home and in foreign countries – arouses considerable political disagreement, on various grounds.

In this case, we are going to look at the question of the viability of nuclear energy. There are at least four key aspects of viability, each of which is strongly disputed.
on the one hand …
on the other hand …
Environmental viability Nuclear energy is dangerous to the environment. There is a constant risk of radiation leaks, and the waste products must be kept in secure storage for hundreds of years. Nuclear energy is in fact kinder to the environment than the use of fossil fuels, and will be sustainable long after we have used up all the fossil fuels.
Economic viability Nuclear energy is far more expensive than other ways of generating electricity, and is not economically viable. It only makes economic sense when combined with a nuclear weapons programme. Although nuclear energy has a very long investment cycle, it will eventually become profitable and cost-effective.
Social viability Nuclear energy calls for a very large and tightly managed operation, and requires strong protection. This encourages the formation of socially repressive structures. Terrorism threatens many aspects of modern society. The structures we put into place to protect nuclear power and other social assets from terrorism should not be blamed on nuclear power alone.
System viability Because of the scale and timescale of nuclear energy programmes, nuclear energy systems are very slow to respond to changes in demand and competition. This is true of all electricity generation to some extent.

Issues / Leads

British Energy

The UK nuclear power company British Energy (formerly British Nuclear Fuels Ltd, BNFL) was denationalized by the Conservative government in 1997. 

At the time, it was argued that this company was economically viable as an independent entity, although there was some strong dissent to this view. 

By the end of 2002, the company was in serious financial difficulties and required a massive bailout by the Government.

share price chart from

Nuclear Power – No Thanks

Nuclear power has aroused considerable hostility from a significant proportion of the population in many countries, for a range of reasons. The German anti-nuclear movement has been particularly strong, and this has lent support to the German Green party.

International Relations

"Iran’s ambitious and costly pursuit of a complete nuclear fuel cycle only makes sense if it’s in support of a nuclear weapons programme." Richard Boucher, US State Department spokesman.

Technological development

One argument for the future profitability of nuclear energy is that since the technology is less mature than for traditional methods of power generation (such as coal-fired and gas-fired) there is huge scope for technical innovation, which would improve efficiency and reduce any risk to the environment. (However, proponents of renewable energy sources (such as wind turbines) can also use this argument to their advantage, since the technologies of renewable energy are even newer and therefore the scope for technical innovation is even greater.)

Underlying this argument is the hypothesis that the efficiency of a technology can be graphed as an S-curve. New technologies may be relatively inefficient initially, because we don’t know how to exploit them properly. As these technologies mature, we learn to exploit them more effectively. However when these technologies reach maturity, the marginal gains from technical innovation are reduced.


Nuclear power may appear ridiculously cheap if you only include the direct costs and omit the indirect costs. Nuclear power may appear prohibitively expensive if you include loads of indirect costs. But different people disagree strongly about which costs it is fair to attribute to nuclear power, and which costs rightly belong somewhere else.

Questions of viability depend crucially on how you scope the system of interest, what links (e.g. to weapons programmes) you regard as valid or meaningful, and what your time horizons are.

Questions of viability often lead to heated political debate – involving international relations and environmental policies as well as social issues. At the centre of such political arguments you will often find arguments about the viability or non-viability of some system. Conversely, arguments about system viability are often coloured by the political agenda of their advocates.

Tasks / Questions

Search the Internet for opinions, comments and analysis about the recent difficulties at British Energy, and about nuclear power in general. What notions of viability are explicit/implicit in the material you have found? Were the economic difficulties experienced by British Energy specific to this company, or did they indicate general difficulties with the viability of nuclear energy? How would you investigate this question further?

What are the factors involved in determining the viability of nuclear energy? Can you identify the differences in scope and perspective that result in different people arriving at very different conclusions? Your task here is not to determine the issue for yourself – although you may have strong views. Your task is to use this issue to get a better understanding of the multidimensional nature of viability.

A proper evaluation would require the collection and analysis of a large amount of detailed information. What kinds of information would be relevant? Where would you expect to get this information, and how reliable would you expect different information sources to be?

Further Reading

Nuclear Power websites British Energy
Environment Pressure Group websites Friends of the Earth




Case prepared by Richard Veryard. February 2003.
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This page last updated on March 25th, 2003
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