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IS IT ALL OVER FOR NUCLEAR POWER?

Michael Brooks

New Scientist

22 April 2006

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Nuclear power's relative decline

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Energy breakdown

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Who's gone nuclear

ADAM TWINE doesn't look like the kind of person the nuclear industry should be scared of. An organic farmer, Twine is skinny, with big round glasses and unruly hair that makes his head look like it's fraying at the edges. How could he possibly be a threat to a multibillion-dollar industry?

Maybe he wouldn't be if he were operating alone, but Twine is far from alone and has serious money behind him. He has just managed to persuade 2127 people to send him a total of more than £4 million that he will use to set up a co-operative wind farm on land he owns in the south of England. In fact, the idea of owning a share in the Westmill wind farm in Oxfordshire has proved so popular that the project is having to return some of the cash: it only needed £3.7 million. The plan now is to give priority in ownership to people living within 80 kilometres of the site, and asking others to accept a smaller stake in the co-op.

Though the wind farm is small - five turbines in a vast, bleak field, amounting to 6.5 megawatts of electricity - it represents another nail in the coffin of nuclear power, one of many being hammered in all over the world. If the nuclear industry wanted to convince governments to start building another generation of nuclear reactors as soon as possible, it needed to bury the likes of Twine before their schemes took off. Now it may be too late.

According to projections by the International Energy Agency and a handful of energy industry experts, 2005 was the first year nuclear power's electricity output dropped behind that of small-scale plants producing low or no carbon dioxide emissions (see Graph) - and that's not counting large hydroelectric projects on the low-carbon side of the balance sheet.

Though small, such projects are already flourishing. Much of the world's small-scale generation involves combined heat and power "co-generation" projects, whose carbon dioxide emissions are 30 to 80 per cent less than that of large-scale gas-fired plants. On average they are at least 50 per cent less. The worldwide uptake of this technology is being accompanied by fast growth in the use of renewables such as solar and wind. The Danish company Bonus, from which the Westmill co-operative wants to buy its wind turbines, now has a backlog of orders from wind farms in Texas, Florida, Sweden, Denmark, Germany and Greece. In 2005 the company, bought by Siemens, almost doubled its wind turbine sales, and its fabrication capacity for 2006 is fully booked.

This burgeoning "micropower" movement is a significant step towards reducing carbon emissions (New Scientist, 21 January, p 36). It is also a knock for a nuclear industry that has been struggling to get back on its feet in the western world. Until last year, near-zero emissions of greenhouse gases were nuclear power's trump card, its big advantage over other sources of electricity and the one thing that might make western governments invest in a nuclear renaissance: nuclear is clean and produces a lot of power, so we need it. That argument now has a hole punched through it, and it boils down to economics.

Until recently, it seemed the wide-scale construction of a new generation of nuclear power plants was inevitable. China is investing in nuclear, after all, as are Japan, Russia and India, so why not the west? Though Germany, Sweden, Spain and Switzerland have forsworn investment in new nuclear plants, other western nations, notably the UK, France and the US, are taking the idea seriously. In August 2005, the US government handed out a range of nuclear subsidies and incentives worth nearly $20 billion. In the UK, Prime Minister Tony Blair has commissioned an energy review with what is widely believed to have a pro-nuclear agenda, marking a move away from the position three years ago when his government said there was no case for nuclear new build. France, which already gets 78 per cent of its electricity from nuclear power, has its eye on starting construction of at least one more plant within the next decade.

In the UK and the US, the case for a nuclear renaissance is on the table mainly because the reactors now generating electricity are coming to the end of their lives. The cry is going up that this will lead to an energy gap: in a few years there won't be enough electricity to go round, and the lights will go out. That's a simplistic analysis, of course. "The idea of a 'gap' is artificial and fails to acknowledge the dynamics of the market system," says Jim Watson, an energy analyst in the Science Policy Research Unit at the University of Sussex, UK. The energy markets in these countries will tend to ensure that there will always be electricity to buy and sell, Watson points out. The cost may go up and the sources may change, but the market will quickly adjust by using more electricity derived from coal and gas, for instance.

Without nuclear, though, won't we be producing ever more carbon emissions? Not necessarily. Nuclear never was part of the short-term solution to climate change, and the rapid growth in small-scale energy production means nuclear may not be needed as part of the long-term solution either.

Of the electricity added to the worldwide supply in 2004, micropower technologies generated almost three times as much as nuclear. Spain and Germany's ventures into wind power alone added as much power capacity in 2004 as the world's nuclear industry will add from 2000 to 2010. Industry projections indicate that by 2010, renewable and low-carbon sources will offer 177 times as much added capacity as nuclear.

This is not going to be enough to power the world; large-scale fossil-fuel generators will still be needed in this timescale. But the overarching global trend is clear. Few new nuclear stations will be operating before 2020, and by the time these plants are even half-built, there will be enough low or no-carbon electricity available from non-nuclear sources to give investors in nuclear plants second thoughts.

The 'negawatt' effect

If they ever invest at all, that is. In January, the financial analyst Standard & Poors issued a report saying that even the new incentives for the US nuclear industry will not be enough to persuade investors to climb aboard; from a business perspective, nuclear remains the highest-risk form of power generation. That's because the subsidies don't deal with the capital, operating and decommissioning risks that most concern the capital markets, says Amory Lovins, CEO of the Rocky Mountain Institute, a Colorado-based energy analysis firm. "The effect of even such huge subsidies will be the same as defibrillating a corpse," he says. "It will jump, but it will not revive."

" Nuclear subsidies have the same effect as defibrillating a corpse "

What's more, a report issued in February by the California-based Electric Power Research Institute (EPRI), whose members include private and public organisations concerned with power generation and distribution, says that implementing energy efficiency measures together with technologies that can respond to changes in demand offers a cost-effective alternative to adding new generating capacity. Contrary to what is often said, we are getting better at controlling our hunger for electricity. If you want proof, just ask the US firms who built gas-fuelled power plants capable of generating 200 gigawatts of electricity, and then found that the anticipated demand they were catering for never materialised. The investors lost $100 billion. According to Lovins, worldwide electrical savings, or "negawatts", now match or exceed global additions of low or no-carbon micropower. So far, the EPRI says, we have only scratched the surface of possible efficiency increases; it is estimated that the US could save three-quarters of the electricity it now uses.

Some states are making progress towards this goal. In California, energy use per capita has been flat for 30 years, and the state has issued plans to halve its rate of growth of electricity consumption by 2013. Vermont has done even better, with efficiency measures that have already cut per capita energy use.

It is economics that is driving these changes. Producing and delivering electricity costs money, so not wasting it makes good sense. Businesses, of course, respond well to market forces and are implementing changes well ahead of domestic users. DuPont's 600-hectare Chambers Works in New Jersey has reduced by one-third its energy use per kilogram of chemical produced. Western Digital's disc drive factory in Malaysia cut energy use by 44 per cent and recouped the cost of implementing the efficiency measures in just one year. By last year, Toyota US had reduced its energy consumption per unit of production by 15 per cent from 2000 levels. All these measures add up to less need for new electricity generating plants.

Nuclear power is also being squeezed on the cost of the electricity it produces. According to a report last year by the New Economics Foundation, a London-based think tank, a kilowatt-hour of electricity from a nuclear generator will cost as much as 8.3 pence once realistic construction and running costs are factored in, compared with about 3 pence claimed by the nuclear industry - and that's without including the cost of managing pollution, insuring the power stations or protecting them from terrorists. This compares with about 3.4 pence for gas, 5 pence for coal and up to 7.2 pence for wind power, according to a report in 2004 by the UK's Royal Academy of Engineering.

The same report told the government that it has to ensure the "long-term stability of electricity prices" if it wants people to invest in nuclear power. Around the same time, Oxera, a firm of energy consultants based in Oxford, UK, reported that a new-build nuclear programme in the UK would require an injection of £1.6 billion in government grants to make the idea appeal to private investors.

The action needed to meet either of these requirements is unlikely to be allowed within the European Union. Andris Piebalgs, the EU's commissioner for energy, wants different forms of energy production to compete with each other on a level playing field, and has declared that state funds must not be used to subsidise the building of new nuclear plants. British Nuclear Fuels and the UK's Nuclear Decommissioning Authority have already been subject to an 18-month inquiry over potential infractions of fair competition - though even Gordon MacKerron, head of the UK's Committee on Radioactive Waste Management and no fan of the nuclear lobby, has called the alleged infractions "marginal".

Finnish line

More serious are allegations against the European Pressurised Reactor (EPR) at Olkiluoto, Finland, the only nuclear power station presently under construction in Europe. A relatively new design of pressurised water reactor, the EPR is being built jointly by the French nuclear company Areva and the German company Siemens, and is being financed at extremely low rates of interest by French and German state-owned organisations. The scheme is being investigated by the European Commission, following a complaint by the European Renewable Energies Federation that the financing breaches the commission's rules.

If the complaint is upheld, it will be a serious blow to the nuclear industry, which likes to point to Olkiluoto as evidence of the viability of new nuclear stations. That argument, however, is questionable whatever the outcome of the complaint. The company the plant is being built for, called TVO, is not a conventional electricity utility, but a company owned by large Finnish industrial concerns that supplies electricity to its owners on a not-for-profit basis.

"The plant will have a guaranteed market and will not therefore have to compete in the Nordic electricity market," says Steve Thomas, an expert in nuclear economics at the University of Greenwich in London. What's more, he says, suspicions have been raised that the Areva-Siemens consortium is so anxious to showcase its technology that it has "offered a price that might not be sustainable" just to get the plant built.

If that is their aim, they may succeed. When the Olkiluoto project is completed - it is scheduled for 2009 - it will become apparent whether the EPR design works and how long it takes to build. The US Nuclear Regulatory Commission is already investigating whether the EPR is a good model for replacing US nuclear plants.

There are a couple of problems looming, though. First, the US is experiencing some new public health and safety concerns: in March, the state of Illinois filed a lawsuit against Exelon, which operates the Braidwood nuclear power station, seeking damages over tritium leaks from the plant. The regulatory commission has formed a task force to investigate radioactive spills that have occurred at plants across the US in the past decade. Any new technology will need to be proved safe and reliable.

The second problem was highlighted at a seminar at the Massachusetts Institute of Technology last month, when Peter Lyons, head of the US Nuclear Regulatory Commission, pointed out that few science and engineering students are coming through to replace reactor workers who are now retiring. As a result there will soon not be enough people to build and operate new reactors. The next decade will be crucial, Lyons said. If the US does not start investing in nuclear energy over that period, it will have neither the skilled workers nor the industrial infrastructure for nuclear power to be a viable option.

" The UK and US no longer have the skills to build and operate nuclear power stations "

It is not just for the US that this is a problem. Last October, UK-based energy consultant Ian Fells told an energy conference in Rimini, Italy, that there are only six engineering consortia in the world capable of building a nuclear power station. None of them is British. "We do not have the skills to build nuclear power stations in the UK anymore," Fells told the conference. "The teams of engineers that built Sizewell B in 1995 are all retired or dead." Even the limited construction now taking place across the world is stretching the industry's capacity, and a construction queue is developing that could kill nuclear plans for the UK, Fells says.

Bridging the gap

Despite these obstacles, Fells remains a supporter of nuclear new-build as the best way to secure energy supplies and protect the environment. "My feeling is that it is inevitable that we add a new, nuclear electricity supply component to our energy mix," he says. He envisages a future in which 30 per cent of the UK's energy comes from new nuclear plants. Just maintaining the nuclear status quo in the UK, however, would require eight to 10 new plants, which he says might not be up and running for 25 years.

That time lag could prove fatal for the nuclear industry. As existing plants go into decline and are shut down, something else has to replace their generating capacity. Adam Twine and his ilk, with their reduced or no-carbon technologies, are already taking up this slack and pulling themselves into an ever stronger position.

Renewables alone won't bridge the gap, even with increased energy efficiency. Fossil-fuel generators will also be needed, in both small-scale projects and large plants, perhaps with carbon sequestration (New Scientist, 3 September 2005, p 30). And here is the problem for nuclear: any investment in new nuclear power could damage the chances of making other climate-friendly technologies work. After all, finances are not unlimited, and you can only spend the money once.

How can anyone justify spending it on something that is not proven to be economical, not going to deliver for two decades - and then will only provide a limited solution? In the UK, nuclear power supplies only 8 per cent of energy used, Watson points out. "Why prejudice programmes and policies to tackle 92 per cent of emissions by spending lots of political and financial capital on 8 per cent?" he says.

In the end, contrary to everything touted by the industry, nuclear investment may not help reduce carbon emissions at all - it might even increase them over the next two decades. If nuclear supporters are truly concerned about climate change and an energy gap, they ought to be encouraging the take-up of renewable and low-carbon technologies - the very technologies that threaten to drive their industry to extinction.

Nuclear power continues to prompt concerns based on safety issues, regulatory problems and the danger that it encourages proliferation of nuclear materials and weapons. Now it also faces a bigger hurdle: there are better economic options that are no less climate-friendly. The slow, steady success of idealists like Twine is showing the world that it no longer needs nuclear power.

Energy security

How many countries want their energy sources to rest in the hands of foreign governments? Such concerns were at their height during the cold war, but they have not gone away completely. Are they a valid reason for shifting towards new nuclear power plants for generating electricity?

It's certainly true that much of the fuel for Europe's gas-fired plants comes from politically unreliable states such as Russia. That can lead to problems. In January, the supply to many European countries was interrupted by a dispute between Russia and Ukraine.

In the US, gas sources are more diverse and less vulnerable, according to a 2004 report from the University of Chicago on the economics of nuclear power. The researchers studied the prices of natural gas in 34 countries from 1994 to 2002 to see how closely they were linked. They found that the US buys from at least three major world markets in natural gas, and that the groups' prices are not strongly linked. That means, the report concluded, that no one will be able to hold the US to ransom over gas supplies. So for the US, at least, security of fuel supply is not a good argument for increasing the nuclear share of its electricity market.

The point is reinforced when uranium sources are taken into account. The expected expansion of China's nuclear programme could absorb all the uranium supplied by Australia, which alone accounts for some 40 per cent of the world's uranium reserves.

From issue 2548 of New Scientist magazine, 22 April 2006, page 33