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A nuclear update for a Swedish energy summit

"Nuclear's Best Years Are Behind Us"
- Perry Sioshansi (2011)

"More than 70 new nuclear reactors are now under construction, but that's not nearly enough to make a strong dent in CO2 emissions worldwide," So the question is, why aren't we building more?"

- Jacobo Buongiorno (Professor of Nuclear Science, MIT)

You aren't trying to fool us, are you Perry? I mean, claiming that "the global nuclear generation peak has already occurred, most likely in 2005-6". But according to a recent claim by the World Nuclear Association, there were 76 reactors under construction at this time last year, which should be sufficient to raise the number from the 437 you cited four years ago to more than 500 by 2020. "Should" can be emphasized here, because Chinese and Russian nuclear salespersons are scrambling through every country in Africa, Asia and South America in which somebody/anybody sitting in a governmental office publicly states that nuclear energy has something useful to offer.

In the same issue of the IAEE Energy Forum in which Perry talks his talk, there is also an article by Rob Graber and Margaret Harding (2011) in which they remind us of a few things. The incident at Fukushima Daiichi is the third nuclear `disaster' in 32 years, but in Japan the issue was "initiated by a series of external events that border on the improbable." As far as I can tell the improbable in this case was putting the facility in the wrong place, and not by any "design or operational flaws", which they say were relevant in the case of Three Mile Island and Chernobyl. (Note the expression "which they say", because as far as I am concerned, those two incidents are completely different - or perhaps better, non-comparable.)

Most important though is their claim that the Fukushima incident could have been prevented "by very basic measures, such as increasing the elevation of the emergency diesel generators that are designed to maintain power to the reactor pumps in the event of a station blackout". I have heard a lot of things about what should or should not have been done to keep the Fukushima incident from taking place, but as far as I am concerned, one the most important - if not the most important - is the contention by these two experts that with the new reactor designs there are passive safety measures that will eliminate experiences of the type mentioned above. Incidentally, this was pointed out in Sweden decades ago, but completely ignored by self-appointed experts.

Why should you believe this? Perhaps you can accept the reason that I present my colleagues and students and - in the silence of my lonely room - my good self. In terms of GDP, Japan is the 3rd largest country in the world. It also happens to be true that in terms of constructing reactors and guaranteeing the safety of their operations, they can do anything that has been done in the U.S. or Sweden or anywhere else, and for reasons that I mention in the long survey chapter for my next book, they might be able to do it better.

The above introduction should get readers into the rhythm of the present short exposition (which is partially extracted from the aforementioned long survey chapter), but please take my humble advice and do not expect valuable information on this subject from The International Handbook on the Economics of Energy (2011), which is more than 800 pages, and contains many articles. It ignores nuclear energy however, which strikes me and should strike you as odd, but maybe that doesn't matter. On the basis of a brief perusal, I believe that like most publications that ignore nuclear where the real as compared to the fictional energy future is concerned, this so-called `Handbook' has little or no pedagogical value.

Thus I continue with the following important message: the nuclear facility at Fukushima was constructed about 40 years ago from blueprints prepared 5 or 10 years earlier. Suddenly it was a victim of one of the most powerful earthquakes experienced in Japan in the last 200 years, and also in the path of a destructive tsunami that featured waves up to 40 meters high. The tsunami killed more than 18,000 people along Japan's north-east coast and forced the evacuation of 150,000 residents from villages and towns close to the Fukushima Daiichi plant. But - AS NOTED BY THE Canadian nuclear engineer and executive Malcolm Rawlingson - the survival of the Fukushima nuclear facility (with only 1 fatality) could be described as a structural miracle. Similarly, as indicated by the testimony of the Swedish diplomat and nuclear expert Hans Blix, its survival demonstrated what we can expect from future generations of (technologically superior) nuclear equipment.

The bottom line here is that exuberant claims about the utility of nuclear energy should not only be tolerated, but promoted, and where the teaching of nuclear economics is concerned, as much emphasis should be put on history as on economics, because history rather than the fantasies of insufficiently educated anti-nuclear propagandists is where the truth about nuclear is to be found.

Sweden is the perfect country in which to study energy disciplines. Perhaps 45 percent of the electric production capacity in Sweden (in e.g. Megawatts) is accounted for by nuclear, although annually - at various times in the past - nuclear probably provided at least 50 percent of the electric energy (in Megawatt-hours) produced in this country. Initially, nuclear and hydro gave Sweden a cost and price for electricity that was among the most favorable in the world (and also some of the lowest output of carbon dioxide). The pointless deregulation of electricity helped to put an end to that very satisfactory price arrangement.

More significant for me and my work, the Swedish nuclear inventory of 12 reactors was installed in slightly less than 14 years, which was a feat of technological brilliance that in some respects was analogous to the expansion of the United States Navy and Air Force in the years immediately after the attack on Pearl Harbor. (At least eight of these Swedish reactors were produced by ASEA, a Swedish firm that inexplicably was moved from Sweden to Switzerland in 1988, becoming the A in ABB, or Asea Brown-Boveri.)

Something I never fail to stress in my formal lectures or informal harangues is the importance of moderately priced AND RELIABLE electricity for an industrial economy, and on that score Sweden was once in the forefront of world economies. Of course, one of the things at the top of the anti-nuclear booster club's wish list is reducing the demand for electricity, and so together with half-baked energy experts from Sweden and elsewhere they unleashed a torrent of lies and misunderstandings about nuclear energy that eventually resulted in the bad news for consumers of electricity that has sometimes characterized the Swedish electric market. During the last decade the price of electricity to households in Sweden has occasionally been extremely high, although - wisely - electricity may still be sold to Swedish industries at a lower price. At the present time electricity prices in Sweden are reputedly low, and as a result the sound of ignorant voices can be heard calling for the closure of four or five of the Swedish nuclear installations.

Think about the following. It is only a matter of time before OPEC decides to stop playing games with the oil price, and that price will once again be over 100 dollars a barrel again. According to the arguments in my new energy economics textbook - ENERGY AND ECONOMIC THEORY (2015) - this will also increase the price of natural gas, and these things alone will increase the value of nuclear. This is not a theory but a fact associated with what has happened in the past because of oil price escalations.

Thinking about the above in the context of industrial countries like Sweden, I would like to suggest reinforcing hydro (when hydro is present), with an optimal collection of renewables and alternatives, as well as maintaining the presence of nuclear, increasing its efficiency, and eventually adopting the next generation of reactors and its variants in both present and smaller sizes. I also think it `politic' to assume that nuclear will be an indispensable complement to (and not substitute for) any conceivable mix of renewables and alternatives, and also to accept that a fraction of these renewables and alternatives could be regarded as a necessary political but suboptimal economic concession to voters and politicians who find it impossible to comprehend a small amount of the exterior (or historical) logic of science and engineering in or outside their countries, and to a certain extent are offended by what they understand of that logic, which happens to be the situation in Sweden.

As Sigmar Gabriel, Germany's economy and energy minister, made clear, "we have reached the limit of what we can ask of our economy." What he meant - but obviously could not say - was the limit of what could be asked if the proposed liquidation of nuclear energy in his country becomes a reality. Notice the word "if", because a genuine as opposed to a synthetic dumping of nuclear will never take place or be sustained in Germany or Japan.

If you believe otherwise, consider the following: AREVA (of France) has just signed a contract for maintenance and in-service inspections of several German nuclear installations. If you also believe that this is a short-time arrangement, regard and interpret these details. One of these is the Isar 2 facility which has a net output of 1,410 MW and is located in Essenbach, Bavaria. Its annual power generation capacity is about 12 billion kWh, which is approximately 15 percent of the total electricity production for the region. Similarly Brokdorf nuclear power plant in Schleswig-Holstein has a similar annual capacity, and the Grohnde nuclear power plant in Lower Saxony has a net output of 1,360 MW. It provides the region with 15 percent of its electricity generation and is 83.3 percent owned by E.ON and 16.7 percent owned by Stadtwerke Bielefeld. It is operated by GKKG Grohnde.

Returning to Mr Gabriel, he understands as well as I do that wind and solar can NEVER replace nuclear in Germany, nor any other industrial country, nor was that the intention of his government, even if it sounded authentic to persons who consider it sophisticated to believe lies and misunderstandings. The main replacement for abandoned nuclear in Germany will likely turn out to be imported electricity and coal, and so he contacted the Swedish prime minister (Mr Löfven) and humbly requested that the Swedish firm Vattenfall should not abandon its coal mining activities in Germany, which may or may not have been about to happen, even though the lies that the directors of Vattenfall once spread across the world about their CCS (or `carbon capture and sequestration') activities in that country probably set a new record where contempt for the intelligence of Swedish and German politicians is concerned. In addition, some of the employees of their firm actually believe the nonsense associated with CCS.

Another thing that is easily understandable, according to Jochen Eberhard - senior executive at the Fraunhofer Institute - is that "too much attention has been placed on costly renewables, and far too little on energy flexibility and flexibility of energy demand". I'm sure that he is correct, particularly when he continues by saying that "this led to a rather high electricity price (except for firms receiving an exemption from the government where the eco-tax and various other newly conceived charges are concerned)."

Hearing this tells me that other countries should not make the mistake of trying to assist the German Chancellor (Angela Merkel) and her team, because what is taking place in Germany is an irresponsible manipulation of taxes and subsidies of one sort or another. Instead, countries that export electricity to Germany should attempt to reintroduce German voters to reality rather than helping to prolong the fantasies associated with the Energiewende, and one way to do what has to be done is to keep electricity prices from rising in their own countries, which in turn means reducing electricity exports to countries like Germany. And last but not least, according to the IEA: the use of coal, oil and natural gas must decline after 2020, and be replaced by nuclear and renewables if emissions are to be curbed".

Thank you for nothing, Germany, is the proper response to unworkable schemes like the Energiewende, and a gesture or gestures of disrespect should also be tendered politicians in every country or city who deem it correct to increase the price of electricity in their countries in order to make a success of the attack on living standards that will be experienced in Germany and elsewhere if the Energiewende achieves its goals!

Incidentally, there is not enough just above about the U.S., where most of the comments about the comprehensive lack of intelligence of YOUR'S TRULY in energy matters originates. For those ladies and gentlemen who still insist that I am a nuclear shill, check out the latest estimates of the EIA (Energy Information Administration of the U.S. Department of Energy). At the present time about 68 percent (= 68%) of the electricity in the U.S. is provided by fossil fuels: coal, natural gas, and a comparatively small amount of oil. Coal provides 37%, natural gas 30% and nuclear 19% of the electricity. About 12% of the energy production in the U.S. comes from renewables and alternatives, where the largest component is waterpower (i.e. hydro) which provides about 7% of the electricity, wind (about 3.46%) and solar maybe slightly more than 1%.

Please note that renewables mean hydro, wind, biomass wood, biomass waste, geothermal and solar, etc - it does not mean just wind and solar. By 2040 the EIA expectations for electric generation is 35% of the total for natural gas, nuclear 16%, wind generation will not increase but solar will likely double, and the rest will be coal. Here allow me to note that the numbers in this and the above paragraph do not mean anything to me, because by 2040 voters in the U.S. and elsewhere will have the correct message about nuclear and energy, and it will not be the one sold by people like the present U.S. president.

Nothing has been said above about the supply of uranium, but the general belief is that there is no problem with reactor fuel, even if the reactors are not breeders (whose fuel requirements are much less than present equipment). Recently Prime Minister Narendra Modi of India and Canadian Prime Minister Stephen Harper announced a deal that will see Canada's Cameco Corporation supply India with 3,000 metric tonnes of uranium over the next five years. Canada thus joins Kazakhstan and Russia as a supplier of uranium to India.

According to Mr Modi, this arrangement "launches a new era of bilateral cooperation and a new level of mutual trust and confidence." He also had a few things to say about clean energy. For instance, "The supply of uranium is important as India is keen to have clean energy. The world is worried about global warming and climate change. We want to give something to humanity through clean energy.For us, uranium is not just a mineral but an article of faith and an effort to save the world from climate change." Well, that is certainly a beautiful thought, but as for it facilitating the saving of anything, we'll have to wait and see. Anyway, according to the World Nuclear Association, 52% of the world's uranium production comes from 10 mines in 6 countries. Canada, Australia and Kazakhstan are major suppliers just now. In Africa, Niger and Namibia are significant producers, and if uranium should turn out to be in short supply in the near future, thorium should be capable of eventually taking its place. Thorium and fast reactors (breeders) to be exact, in which U-238 can be fully exploited.

Now to end this story. The EIA forecasts that global energy consumption will grow by about 55% by 2040, with at least 75% of that supplied by fossil fuels unless nuclear is allowed to play more than a marginal role. As for Germany and the Energiewende, the OECD (= Organization for Economic Cooperation and Development) and the IEA (International Energy Agency) claim that even with a tax of 30 dollars per metric ton on carbon dioxide originating with coal and natural gas, they are still less costly than wind and solar. Moreover, those organizations now admit that in terms of economics, nuclear is the optimal source for producing electricity.

Michael Shellenberger, who was once labeled a "Hero of the Environment" by Time Magazine, now concludes that the belief that solar and wind power can displace fossil fuels is a "hallucinatory delusion", and mentions that in 2012 solar power generated less than 5% of Germany's electricity despite years of experimenting and over $100 billion spent in subsidies. Finally, when you think nuclear, think China: The China Nuclear Energy Association (CNEA) predicts that 8 new nuclear reactors will begin operation this year, which will mark the largest single-year increase in nuclear power use in China's history. Moreover, ground will be broken for 6-8 more. There are 23 reactors now operating in China, with 26 under construction, and at least 50 planned. The point is to drastically reduce the consumption of coal, and it is very likely that the Chinese recognize that to maximize the utility of using solar energy (which may have found favor with Chinese planners), more nuclear is required, and especially nuclear facilities with the kind of load-following ability that has been practiced in France.

Currently, nuclear energy is only a small fraction of China's total power generation, but they find this unacceptable, and the goal now is 58 gigawatts in nuclear power capacity by 2020. Some of this power will be supplied by Chinese designed equipment such as China's own indigenously-developed third-generation reactor, the Hualong-1 (developed by China National Nuclear Corp and China General Nuclear Power Group). Needless to say, China intends to become a world leader in the nuclear power industry as soon as possible, and the world leader during this century. Plans have also been made to sell the Hualong-l to countries in Asia and South America.

In any event, the following numbers should be examined by all readers, because for many persons who are not impressed by nuclear energy, there is a sincere belief that it is only a matter of a few years or a few decades before nuclear will be out of the picture. The International Nuclear Energy Agency has produced some statistics however that tell another story. 66 nuclear power plants are currently being constructed, and more than one-half of these are being built in China, Russia and India, with Russia constructing 9 and India 6. Thus, on a per-capita basis, Russia is far in the lead. The United States is constructing 5, the United Arab Emirates 3, South Korea 4 and Japan 2. I no longer have the same interest in the Japanese energy future as I once had, but please allow me to predict once more that by mid-century, Japan and Germany could be the most nuclear intensive countries in the world. Japan certainly, because unlike Germany they cannot easily import electricity from surrounding countries, where the emphasis here should be on "easily".

In addition, when the increase in oil and natural gas prices that I predicted above takes place, Japanese voters will change their mind about nuclear.

As for the present reliance on nuclear, France obtains almost 77% of its electricity from nuclear, Slovakia 57%, Hungary 54% , the Ukraine 49%, Belgium 47%, Sweden 42%, Switzerland 38%, Slovenia 37%, Czech Republic 36%, Finland 35%, the U.S. 19%, Russia 19%, the UK 17%, Canada 16%, India 3.5% and with 23 reactors China only obtains 2.4%. Finland has 35%. (These are measures of nuclear capacity.)

According to the International Atomic Energy Agency, Japan has 48 reactors, but has `locked down' all of them as a result of the Fukushima episode. I haven't wasted my time checking this out, or trying to estimate exactly when the `locks' will be removed, because on the basis of my knowledge about Japanese consumption habits, as well as the value of energy to the superb Japanese industrial establishment, most of those reactors will be in operation again in the not too distant future. The situation here is quite simple: it is easy to close facilities providing nuclear energy, but not easy for other resources to replace the energy they provide. As for replacing the pre-Fukushima energy output with energy provided by wind and solar, that is impossible for Japan or any other modern industrial country.

According to a recent article in the international edition of the New York Times by David Jolly and Stanley Reed (2015), the "Fukushima disaster has undoubtedly undermined support for atomic power", which is correct. The authors also point out that "the rise of cheaper renewable energy, like solar and wind power, has hurt the business case for investing in huge nuclear plants." That may also be correct, however everyone reading this should appreciate that the logic of orthodox economic theory and orthodox political theory, supported by the logic of science, will settle this matter in the long run, and it will NOT be settled by business abandoning nuclear.

Whether cheaper renewable energy makes economic sense for the reliable provision of large quantities of electricity for industrial plants and transportation is quite another matter. What those authors call the "business case" is often presented by persons who earn their `daily bread' in the financial districts of New York of London, and the only things that make sense to many of those ladies and gentlemen are their salaries and bonuses, which is why they are prone to recommend the wrong kind of investments for expanding economic growth and welfare. What difference does it make to them if exercises like Germany's Energiewende are preposterous: the important thing is to join in the profitable financing of wind turbines and solar facilities.

By way of closing, let's start by looking at the following statement, which was logged in via Linkedin by Alex Cannara: "Having had dinner with several employees of China's largest nuclear-plant construction company, let me share one sentence they spoke two Octobers ago: `We intend to dominate world nuclear power'." Behind a statement like that is something that I know as well as Mr Cannara's dinner companions: dominating world nuclear power is going to be easy-peasy, and once that is done it is likely that China will have the strongest economy in the world.

In talking and thinking about Germany, and how wonderful things are going or will go for them as a result of the Energiewende, something should never be forgotten: Germany is and has always been a brilliant industrial power, and if there was some way to rank historical industrial achievements, they would be first or second in the world. In hearing about the successes of the Energiewende - most of which is lies or misunderstandings - the outcome for the German industrial sector is mostly overlooked or ignored. One thing though is certain, which is that solar panels on the rooftops of factories will not make the cut. What is needed is something like the world's largest solar generating plant (The Ivanpah Solar Electric Generating System), which happens to be located in California's Mojave Desert fairly close to Las Vegas.

I mentioned that facility in one of my books or articles or lectures, and mistakenly came to the conclusion that it might be a winner, thanks to its location. Poor me, I forgot a few things. I forgot that the facility does not generate electricity when clouds, dust or nightfall interrupt the plant's supply of fuel, which is solar irradiance. My carelessness can be summarized by paraphrasing some lyrics from the song `New York New York': `if a solar plant can't make it in the Mojave Desert, it can't make it anywhere.'

According to one report, "project owners are now taking advantage of cash grants from the (U.S.) Treasury to help repay their initial loan from the Department of Energy." They're also burning a lot of natural gas at or near that Mojave facility to boost the output of electricity early in the morning and when the sun fades at the end of the day. Where the financial side is concerned, plant construction began in 2010 using a $1.6 billion federal loan guarantee, and present output is about one-fourth of expectations. Readers of this discussion should focus on that outcome. It's called bad economic news. Bad news also applies to large scale Spanish solar projects.

Now for a few more odds and ends. It has been about 4 years since the Fukushima Daiichi facility was attacked by a wall of water resulting from a seismic tsunami, but as I noted shortly after that event, when Japan's 54 reactors were either closed or scheduled to close, Japanese voters were in no mood to tolerate the increase in utility bills that would result from a complete closing down of their nuclear sector. A compromise seems - SEEMS - to have been reached with the closure of 11 older facilities. That arrangement is expected to add about 20 percent to the cost of Japanese electricity, and so I would like to forward another prediction: all of the plants that were closed will be opened within ten years, unless of course it is decided to dump them and build modern new facilities that can compensate Japanese rate-payers who have been financially inconvenienced by those closures. For instance, the Kyushu Electric Power Company has already received permission to start the reactors at the plant in Satsumasendai later this year (2015).

REFERENCES

Archer, Oscar (2015). `Recycling Nuclear Waste for Power Generation'. 321 Energy (3 March).

Banks, Ferdinand E. (2016). Energy and Economic Theory. Singapore, London, and New York: World Scientific.

_____. (2007). The Political Economy of World Energy: An Introductory Textbook. Singapore and New York: World Scientific'.

Barre, Bertrand and Pierre-Rene Bauquis (2007). Understanding the Future of Nuclear Power. Strasbourg: Editions Hirle

Grabner. Rob and Margaret Harding (2011). `The impact of the Fukushima Nuclear Accident on the Future of Nuclear Power'. IAEE Energy Forum (Fourth Quarter).

Evans, Joanne and Lester Hunt (2011). International Handbook on the Economics of Energy (2011). London; Edward Elgar.

Jolly, David and Stanley Reed (2015).'France's Nuclear Stumbles Feed Doubt about Industry.' International New York Times (May 8).

Owen, Anthony D. (1985). The Economics of Uranium. New York: Praeger.

Sioshansi, Perry (2011). `Japan Rethinks Its Nuclear Future'. IAEE Energy Forum. (Fourth Quarter).

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