Race to the future : Nuclear Insurance

[mrlloyd]

Here's a more detailed write up on the German study re Insurance costs

www.nuc.berkeley.edu/node/3459

As the Japanese are finding out, there's nothing theoretical about this.

Comments

[condign]

How far are you willing to go with this? Do you support forcing all forms of electricity to take out insurance in order to pay for third-party tort costs? Or is it just nuclear?

[mrlloyd]

Just to be clear. You don't think nuclear power plants should have insurance?

[condign]

Not necessarily, no. Insurance isn't magic: it's just a way of dealing with risk.

If you tell me that a given reactor has $X billion in potential liability from failure, but that it's owned by a conglomerate with $(Y*X) billion in assets, where Y is very much greater than 1 and sufficient to cover any damages with later asset sales, then they should insure only if their cost of insurance is less than the opportunity cost of capital investment.

I think what you might want to be asking is if nuclear power plants should be operated by entities that are unable to cover potential liabilities, through insurance or otherwise.

[mrlloyd]

All well and good. But the world's largest energy company is facing nationalisation due to the failure of a nuclear power station, and that's *with* the government protecting them from damages.

No company's assets are up to covering the losses a nuclear power plant could incur. That's why they are all supported by legislation that caps the risk to investors - and shifts it all onto citizens - often in other countries.

Incidentally, suppose I buy the house next to yours and fill it full of gasoline and matches. One day the house burns down. Is the subsequent destruction of your home a third party cost for which I bear no responsibility?