Is This The Death Knell For Nuclear?

By Haley Zaremba - Jan 18, 2020


It’s nearly impossible to discuss climate change and the future of the energy industry without discussing nuclear energy. Nuclear energy produces zero carbon emissions, it’s ultra-efficient, it’s already in widespread use, and could be scaled up to meet much more of our global energy needs with relative ease, but it is, and will likely always be, an extremely divisive solution.

For all its virtues, nuclear energy certainly has its fair share of drawbacks. It may not emit greenhouse gases, but what it does produce is deadly nuclear waste that remains radioactive for up to millions of years and we still don’t really know what to do with it other than hold onto it in ever-growing storage spaces. And then there are the horror stories that keep civilians and politicians alike wary if not outright antagonistic toward the technology. Chernobyl, Fukushima, and Three Mile Island loom large in our collective doomsday consciousness, and not without good reason.

We’re still dealing with the aftermath of these nuclear disasters. Japan is in many ways still reeling from 2011’s Fukushima nuclear disaster and recently even threatened to throw radioactive water into the Pacific Ocean or letting it evaporate into the air because they are running out of storage space for the wastewater they have been using to keep the damaged Fukushima reactors from overheating again. So yeah, nuclear isn’t perfect.

Because of all of these reasons, as well as financial burden, nuclear energy has been on the decline in much of the world (with some notable exceptions in the nuclear-friendly administrations in China and Russia). This is not new news. Now, however, Chatham House, the UK's Royal Institution of International Affairs, has taken things a step further by taking the official stance that nuclear will never be a serious contender as a solution to catastrophic climate change. Related: Bearish Sentiment Returns To Oil Markets

As paraphrased by environmental news site EcoWatch, the energy experts at Chatham House “agreed that despite continued enthusiasm from the industry, and from some politicians, the number of nuclear power stations under construction worldwide would not be enough to replace those closing down.” The consensus was that this is nuclear’s swan song, and we are now unequivocally entering the era of wind and solar power.

These conclusions were arrived at during a summit convened to discuss the findings of the World Nuclear Industry Status Report 2019, which concluded that “money spent on building and running nuclear power stations was diverting cash away from much better ways of tackling climate change.”

This echoes the sentiment of many other climate and energy experts, who have long been sounding the alarm bells that renewable energy is not being built up or invested in with nearly enough urgency. Last year the International Energy Agency announced that renewables growth has slumped, and that our current renewable growth rate of 18o GW of added renewable capacity per year is “only around 60 percent of the net additions needed each year to meet long-term climate goals”.

The International Renewable Energy Agency (Irena) did the math, calculating exactly how much renewable energy will need to be installed by 2030 if the world has any hope of meeting the goals set by the Paris climate agreement, and they found that “7.7TW of operational renewable capacity will be needed by 2030 if the world is to limit global warming to ‘well below’ 2C above pre-industrial levels, in line with the Paris Climate Agreement,” according to reporting by Wind Power Monthly. “However, at present, countries’ nationally determined contributions (NDCs) amount to 3.2TW of renewable installations by 2030, up from 2.3TW currently deployed.”

The World Nuclear Industry Status Report succinctly sums up the situation while sounding the death knell for nuclear: "Stabilising the climate is urgent, nuclear power is slow. It meets no technical or operational need that these low-carbon competitors cannot meet better, cheaper, and faster."

By Haley Zaremba for Oilprice.com



The Unexpected Consequences Of Germany’s Anti-Nuclear Push

By Irina Slav - Jan 14, 2020


Germany, the poster child for renewable energy, sourcing close to half of its electricity from renewable sources, plans to close all of its nuclear power plants by 2022. Its coal-fired plants, meanwhile, will be operating until 2038. According to a study from the U.S. non-profit National Bureau of Economic Research, Germany is paying dearly for this nuclear phase-out--with human lives.

The study looked at electricity generation data between 2011 and 2017 to assess the costs and benefits of the nuclear phase-out, which was triggered by the Fukushima disaster in 2011 and which to this day enjoys the support of all parliamentary powers in Europe’s largest economy. It just so happens that some costs may be higher than anticipated.

The shutting down of nuclear plants naturally requires the replacement of this capacity with something else. Despite its reputation as a leader in solar and wind, Germany has had to resort to more natural gas-powered generation and, quite importantly, more coal generation. As of mid-2019, coal accounted for almost 30 percent of Germany’s energy mix, with nuclear at 13.1 percent and gas at 9.3 percent.

The authors of the NBER study have calculated that “the social cost of the phase-out to German producers and consumers is $12 billion per year (2017 USD). The vast majority of these costs fall on consumers.”

But what are these social costs--exactly?

“Specifically,” the authors wrote, “over 70% of the cost of the nuclear phase-out is due to the increased mortality risk from local air pollution exposure as a consequence of producing electricity by burning fossil fuels rather than utilizing nuclear sources.”Related: Is This The Start Of A New Offshore Oil & Gas Boom?




The culprit is coal. According to the study, some 1,100 people die because of the pollution from coal power generation every year. This, the authors say, is a lot worse than even the most pessimistic cost estimates of so-called “nuclear accident risk” and not just that: 1,100 deaths annually from coal-related pollution is worse even when you include the costs of nuclear waste disposal in the equation.

The results of the study, which used machine learning to analyze the data, surprised the authors. The cost of human lives had not been expected to be the largest cost associated with the nuclear phase-out.

“Despite this, most of the discussion of the phase-out, both at the time and since, has focused on electricity prices and carbon emissions – air pollution has been a second order consideration at best,” one of the authors, economist Steven Jarvis, told Forbes.

Just two decades ago, air pollution was a top concern for many environmentalists. Now, carbon emissions and their effect on climate seem to have taken over the environmental narrative and, as the research from NBER suggests, this is leading to neglecting important issues. Meanwhile, there are voices—and some of them are authoritative voices—that are warning a full transition to a zero-emission economy is impossible without nuclear power, which is virtually emission-free once a plant begins operating.

None other than the International Energy Agency—a staunch supporter of renewables—said in a report last year that the phase-out of nuclear capacity not just in Germany but everywhere could end up costing more than just increased carbon emissions as the shortfall in electricity output would need to be filled with fossil fuel generation capacity, just like it is filled in Germany.

Why can't renewables fill the gap? Here’s what the IEA had to say:

“If other low-carbon sources, namely wind and solar PV, are to fill the shortfall in nuclear, their deployment would have to accelerate to an unprecedented level. In the past 20 years, wind and solar PV capacity has increased by about 580 gigawatts in advanced economies. But over the next 20 years, nearly five times that amount would need to be added. Such a drastic increase in renewable power generation would create serious challenges in integrating the new sources into the broader energy system.”Related: Are Oil Prices Still Too High?

Translation: we are not adding wind and solar fast enough and we can never add them fast enough without risking a grid meltdown.

Even Germany’s fellow EU members recognize the importance of nuclear power. Leaving aside France, where it is the single largest source of energy, accounting for 60 percent of electricity generation, the EU members agreed in December to include nuclear power in their comprehensive climate change fighting plan, which the union voted on at the end of the year.

“Nuclear energy is clean energy,” the Czech Prime Minister, Andrej Babis, said at the time. “I don’t know why people have a problem with this.”

The reason so many people have a problem with nuclear is, of course, obvious. Actually, there are two reasons: Chernobyl and Fukushima. One might reasonably argue that two accidents for all the years nuclear power has been used for peaceful purposes by dozens of nuclear plants make the risk of a full meltdown a small one, but statistics is one thing--fear is an entirely different matter.

The problem with nuclear plants, in most opponents’ minds, is that a meltdown may be rare, but when it does happen, it is far more disastrous than a blackout caused by a slump in solar energy production, for example.

There is no way to remove the risk of a nuclear reactor meltdown entirely. Reactor makers are perfecting their technology, enhancing safety features, and making sure the risk will be minimal, but the risk remains, deterring politicians--those in the ultimate decision-making position--to make a pragmatic decision that, as the NBER research suggests, could actually save lives.

By Irina Slav for Oilprice.com


The World Can’t Let Nuclear Energy Die
Despite wavering public sentiment and…

The Biggest Challenges Facing America’s Nuclear Sector=



GLOBAL RISK INSIGHTS

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

Nuclear Is Japan’s Only Choice For Energy Independence



Japan has adopted a peaceful approach towards nuclear technology, limiting it to the use of supplying electricity. This is despite being the only nation to have suffered devastating effects of nuclear warfare. However, the 2011 tsunami triggered an accident at the Fukushima nuclear plant and dramatically changed public sentiment with widespread protests calling for the abandonment of this energy source. The balance between these demands and the use of reliable and affordable energy supply is significantly conditioning Japanese politics.


Energy security in Japan

Japan relied heavily on imports of fossil fuels while recovering from WWII. This vulnerability became critical in the wake of the 1973 oil crisis and led to diversification in Japan’s energy mix towards a significant use of nuclear energy.

This trend was sustained during the following decades and even increased at the beginning of the 21st century due to environmental concerns. For example, in 2008, the Ministry of Economy, Trade and Industry (METI) set the goal of reducing CO2 emissions by 54 percent by 2050, and 90 percent by 2100. This would lead to nuclear power contributing around 60 percent of primary energy consumption by 2100 and being responsible for 51 percent of emission reduction.

However, in July 2011, after the Fukushima accident, the Japanese government decided to shut down all its nuclear power plants. As a consequence by February 2012, electricity costs increased by 15 percent.

Figure: The trend of Power Generation Costs (Total for 12 Companies)





(Click to enlarge)



The cut in nuclear plants affected Japan’s trade balance. Between 2011 and 2013, the cost of importing energy resources into Japan was $40 trillion, and the total trade deficit between April 2011 and March 2014 was $227 billion. As a result, the government was forced to adopt the 4th Strategic Energy Plan in 2014 and declare that nuclear energy was a vital energy source that would continue being used under optimal security conditions to achieve a stable and affordable energy supply.

So, energy security is Japan’s main geopolitical concerns. As an island nation without indigenous energy sources, Japan relies heavily on imported fossil fuels. This overreliance on imports endangers the country’s energy system if a geopolitical event disrupts shipping to East Asia. The most likely disruptive events being a war between the United States and Iran, an open conflict with China over the Senkaku islands, or an attack (conventional or nuclear) from North Korea.

Japan’s energy future and the problem of public opinion

However, the most severe challenge facing policy-makers and the nuclear industry in Japan is the loss of public confidence in this type of energy. For instance, the 2015 Japan Atomic Energy Relations Organization (JAERO) survey found that 47.9 percent of respondents want nuclear power abolished gradually. 14.8 percent think it should be halted immediately. Only 10.1 percent said that the use of atomic energy should be maintained and 1.7 percent said it should increase.

These opinions have a bigger eco in the countryside where mayors or prefecture’s chief have informal veto power on the reopening of nuclear power plants, which at the same times is highly conditioned by electoral dynamics and popular support.

In 2013, Abe’s government created the Nuclear Regulation Authority (NRA), an agency with an independent decision-making authority based on scientific and technological data, to develop new safety standards and boost public confidence for the nuclear reactors reopening process. Related: Oil Prices Set For Worst Weekly Drop In Five Weeks

However, faith in nuclear energy has not been restored. According to a more recent JAERO study, the ratio of the public who trust the nuclear industry is 1.2 percent, and those who do not is 22.0 percent. The reasons for these figures are the lack of information disclosure, insufficient preparation and management on safety, and the perceived lack of honesty from industrials and public officials.

The problem of nuclear waste

The Japanese government must also find safe ways to manage stocks of irradiated nuclear fuel. By the end of 2016, Japan had 14,000 tons of spent nuclear fuel stored in nuclear power plants, filling about 70 percent of its on-site storage capacity. The law requires reprocessing of spent fuel to recover its plutonium and uranium content. But fuel storage in Rokkasho, Japan’s only commercial reprocessing plant, is nearly full, causing potential risks derived from the lack of storage space, such as the need to stop uranium reprocessing or halting nuclear power plants activity increasing like that Japan’s energy vulnerability.

Other risks derived from excessive storage and conservation conditions can be leaks of irradiated particles, which represent a threat to public health. That’s why the construction of an interim storage facility in Mutsu is planned, however, in the medium term this problem will force Japan to move spent fuel to dry cask storage, and in the long term, it will need to increase this capacity and find a candidate site for final disposal of spent fuel.

Japan also has nearly 48 tons of separated plutonium. Just one tone of separated plutonium is enough material to manufacture more than 120 nuclear weapons. Many countries have expressed concern about Japan’s plans to store plutonium and use it as nuclear fuel. Some, such as China, fear that Japan may use the material to produce nuclear weapons rapidly. Consequently, maintaining this policy could increase security concerns and regional tensions, and could stimulate an arms race in East Asia.

The geopolitics of nuclear energy

Although only nine of Japan’s 38 commercial reactors are currently functioning, the government and the nuclear industry hope to be able to solve much of the problems associated with this sector by exporting energy and infrastructures to foreign markets. For the Japanese government, this is a critical component of its program to boost economic growth, and for the Japanese nuclear industry, this is the last hope to do business after Fukushima.

Companies like Toshiba, Hitachi and Mitsubishi, entered foreign markets with the help and support of the Japanese government. Japan’s public-private partnership to build nuclear power plants is a lucrative opportunity that could position Japan as one of the world’s leading energy suppliers in the future. After all, nuclear power is in demand in countries such as Turkey, Poland, Bangladesh, Pakistan and Argentina, that are eager to reduce CO2 emissions and increase their energy security.Related: China’s Fight Against Pollution To Generate Billions In Extra Solar Income

At the same time, demand for reactors appears to be stable worldwide. In particular, China and Russia have been vigorously entering foreign markets in recent years through their state-owned companies. For example, Rosatom announced last year that it had acquired contracts to build 35 new reactors, 67 percent of the world total. Chinese and Russian state-owned companies have been supplying nuclear material at lower costs than Japanese and Western ones, which has pushed up fossil fuel prices and raised national security concerns in many countries. This is why in 2017 a memorandum of understanding was signed between Japan and the United States to promote the global leadership role of both countries in the field of civil nuclear energy to counter Chinese and Russian dominance of the global nuclear energy market.

General assessment and foresight

Since Fukushima, the reopening of nuclear power plants in Japan has become more difficult in many ways. The Japanese government has adopted much stricter safety measures, and the nuclear industry has had to fight tirelessly to regain the confidence of the Japanese people.

In the coming years, the public acceptance of nuclear energy among Japanese local and regional leaders will be highly likely for environmental and employment reasons. However, the process of recovering Japan’s public support for nuclear energy is expected to take several years. The Nuclear Regulation Authority appears to be a credible and effective voice for public acceptance of the reopening of nuclear power plants. However, it is essential that this agency maintains its role as an impartial, fact-based entity to maintain its credibility with opponents of nuclear energy.

On the other hand, Japan will need to make significant strategic efforts to develop alternative energy sources. To bring its energy self-sufficiency rate back to the 2010 level or even higher, an optimal combination of renewable and nuclear energy is imperative.

By Global Risk Insights