Bright green in a sea of red
Amid the carnage on the Japanese stock market last week caused by the combined impacts of the earthquake, the tsunami and the nuclear crisis, one stock shone bright green in a sea of red.
The share price of Japan Wind Development Co Ltd – a small, loss making wind farm operator – jumped sharply from ¥31,500 on March 11 to ¥47,000 three trading days later, as the overall market slumped more than 15 per cent.
The contribution of Japan’s wind sector (274MW) to the country’s electricity grid is paltry, but at least it emerged unscathed from the natural disasters, while 10GW of nuclear and 8GW of coal-fired power were disabled. And as we noted on Friday, global green stocks have been well supported by investors in the past week, mostly on the belief that governments will turn increasingly to renewables (and energy efficiency) as their clean energy option.
In reality, it is still too early to say how the crisis at Fukushima will play out, beyond the immediate reactions of government, but given the experience post Chernobyl and Three Mile Island, and the indelible images of exploding reactors in Japan that will be left in the public and political mind, it seems fair to assume that the rollout of nuclear facilities will be stalled and downgraded, at least for the next decade, and there will be a renewed focus on renewables and energy efficiency.
To what extent – and how renewables and energy efficiency can fill the void – is the question being posed by markets, analysts and energy companies across the globe.
It is interesting to note that the rollout of nuclear, even with the dawn of its much-touted renaissance, was likely to be dwarfed by the investment in renewables in the coming decade. In a report released over the weekend, analysts at HSBC forecast the nuclear rollout – even before the Fuskushima incident – would be around 16GW a year over the next decade. That’s considerably more than has been installed over the past decade, but it pales in comparison with the 92GW of renewables that HSBC estimates will be installed each year over the same period.
HSBC says it is too early to change these forecasts, but the risk is clearly on the downside for nuclear, and on the upside for renewables. It also expects energy efficiency to get a renewed focus and energy sources such as gas to benefit, particularly in the short- to medium-term if, as expected, lifetime extensions for ageing reactors in Germany, the US and UK are restricted or declined; or, as is likely in Germany, older plants are shut down immediately.
As this site also noted last week, the most predictable impact of Fukushima will be on nuclear costs, as extra layers of safety are nevitably added to new and current reactors. HSBC says this could add a 25 per cent uplift on capital costs for nuclear, lifting its estimates for the levelised cost of energy for nuclear to more than €60 per MWh of electricity produced, not including decommissioning costs.
This compares, says HSBC, to an LCOE of €56-83/MHw for traditional fossil fuel technologies (an average of €68/MWh) and and €58-70/MHw for wind. “We estimate nuclear decommissioning costs of around €45/MWh, giving a total LCOE for nuclear at €106/MWh, which is considerably more expensive than wind,” it says.
Nuclear, in some countries, will become less economic – or uneconomic – and renewables will be the obvious beneficiary from a rise in gas prices and nuclear capital costs. “It is not unreasonable to expect the focus to switch towards safe, proven, secure and low-carbon forms of energy generation – renewables and gas – as well as measures to reduce demand through building regulations and transport efficiency standards,” HSBC says. “In the much longer term, given gas’ continuing emission profile, there may be very few other competing technologies for renewables.”
Even China, which is expected to account for nearly half the new nuclear capacity over the coming decade, has suspended the approval of new nuclear projects and plans to conduct ‘rigorous’ safety inspections in all nuclear power plants under construction. The review of safety standards could add costs, both in the construction of new reactors as well as in the operation of active ones, but given the country’s rising energy consumption, pollution issues, lower seismic risk and rigorous central planning focus, HSBC says this is likely to be only a short-term delay for nuclear.
Still, nothing is certain. As noted in the Financial Times late last week, “nuclear radiation” was the most searched phrase on the Chinese internet this past week, and blogs were full of sceptical comments about the technology’s safety. And supermarkets reportedly ran out of salt because many Chinese believed the iodine contained in them would help ward off the effects of any radiation poisoning.
HSBC believes the EU will have to rethink its 2050 energy roadmap, less than a month after it was released, to include more renewables and gas, and less nuclear. But the key to unlocking the potential of renewables will likely come from massive investment in grid infrastructure – so that the wind contribution from a country like Spain can be fully exploited, as could the hydro contribution from Scandinavia, and the solar contribution from southern Europe and north Africa.
Much of the impetus will come from Germany, which is highly likely to dump plans to defer the phase of its nuclear stock. Chancellor Angela Merkel has made it clear that she sees nuclear as a “transition fuel” at best, and while she is reluctant to close down Germany’s own nuclear plants simply to import nuclear from elsewhere, Germany is looking at numerous measures to bridge the gap, including increased investment and tariffs for offshore wind, energy efficiency measures, and a significant investment in its domestic and pan-European grid infrastructure.
This includes the Desertec proposal, backed by leading German companies Siemens, Deutche Bank and Munich Re, among others, which seeks to source solar energy from northern Africa – the first solar plant has already begun construction in Morocco – and accelerating plans for a European “super grid”, and to invest in its own grid infrastructure.
Matters of perception
The image problems besetting the nuclear industry should not be underestimated. Chernobyl and Three Mile Island set back the development of nuclear by several decades. As we noted last week, Nuclear is unique in its dependence on public trust and its ability to secure it.
The mixed signals coming out of the Japanese crisis – where experts insisted there was no danger beyond 20kms, the US suggested the exclusion zone by 80kms, and the government of nuclear dependent France – among others – recommended its citizens either leave the country or drive south from Tokyo, simply underline that point.
The nuclear industry insists that generation 2 and generation 3 reactors will not encounter the same problems at Japan, but that is exactly what they said a week ago about generation 1 reactors, before events spiralled beyond their control. The public will continue to wonder what mixture of natural catastrophe, bad planning, human failure and bad luck might cause future problems.
This concern is reflected in the HSBC report which said that the current new generation of nuclear reactors (eg Areva’s EPR technology) already have apparent safety concerns, which will only be magnified by Fukushima. “We note that the build-out of new nuclear facilities in most nuclear countries is contingent on some form of subsidy/loan guarantee/ financing from governments and as such are deeply political issues with an increasingly sceptical public,” it wrote. “Hence safety is likely to be the latest black mark to be put against the nuclear industry, on a list that includes water intensity (versus expected future water scarcity), slow build times, cost overruns, waste disposal and proliferation."
But some pro-nuclear activists are insistent, even to the point of arguing that excessive amounts of radiation is actually good for you, as the prominent Fox News columnist Ann Coulter did late last week. "With the terrible earthquake and resulting tsunami that have devastated Japan, the only good news is that anyone exposed to excess radiation from the nuclear power plants is now probably much less likely to get cancer,” she wrote.
Comments on this article
Sponges may look like plant
Sponges may look like plant life, but they are actually animals. These sea-bottom dwellers are very simple mulch-cellular creatures. There are various types of sea sponges found on reefs and deep-sea bottoms. Some are loners, while others grow in colonies. how to speak swedish
Fabric has bold red, pumpkin
Fabric has bold red, pumpkin orange, yellow and white flowers, with green leaves, on a bright green background. how to speak dutch
Nuclear, in some countries,
Nuclear, in some countries, will become less economic – or uneconomic – and renewables will be the obvious beneficiary from a rise in gas prices and nuclear capital costs. “It is not unreasonable to expect the focus to switch towards safe, proven, secure and low-carbon forms of energy generation – renewables and gas – as well as measures to reduce demand through building regulations and transport efficiency standards,” HSBC says. “In the much longer term, given gas’ continuing emission profile, there may be very few other competing technologies for renewables.” directory sync
innovation and investment incentives, carbon tax feed in tariff
Ensure proper market incentives for carbon emission free electricity, and electricity demand reduction. Nuclear energy can then fight it out with all the renewable sources on a costs and time to market basis.
It seems that time is running out. Soon the only option will be to suffer the consequences, until industrial production becomes limited by wars, disasters, resource depletion, and an eventual large human population drop. Self harm is not self limiting.
Attempt to leave ignorance behind
Australia has a responsibility for 100% the CO2 emissions that it emits, and the percentage is not important when we are dealing with amounts of pollution this huge.
Nuclear does not make either short-term or long-term sense. It takes too long to build and is too costly to decommission.
Nuclear will never make either short-term or long-term sense.
Ann Coulter
Do you people realise that Ann Coulter was quoting a New York Times science article from 2001?
Is it really too difficult to read articles properly? That article quoted various serious scientific studies that had looked in to the real risks of low level radiation. The Linear No Threshold (LNT) hypothesis fails even an elementary analysis but was adopted as it is considered to be conservative.
Science people, not superstition. Real observational data trumps models anytime.
Energy Independence
At the end of the day, it really doesn't matter which direction we take, because Australia has very little impact Globally. We only contribute approx. 1.5% to world CO2 levels.
But having said that Australia's agenda should be Energy Independence, that means converting our rich natural gas and coal reserves to liquid fuel. We are importing more than $20 billion worth of oil every year and this is increasing.
Solar, Wind and Nuclear (preferably Thorium based, either LFTR or ADSR) can and should play a part in this process, because frankly natural gas and coal are a useful resource (but not necessarily for electricity generation).
Eenergy independance:
CTL (Coal To Liquid) & GTL (Gas To Liquid) refer to http://liquidcoal.com/
http://liquidcoal.com/news/liddy%20show.htm
http://www.youtube.com/watch?v=ZMpcOnjGqGc
http://www.monashenergy.com.au/
TTL (Tyres to Liquid)
http://videosift.com/video/Demo-Converting-Old-Tires-into-Diesel-Fuel-Really
NB. Producing ethanol from potential food supplies, also biofuels can not produce petroleum based by-products’ eg. plastics but CTL’s can.
Australians do safety well
Australia has world-leading safety expertise, reflected in some of the world's lowest fatality and serious injury rates in dangerous industries like construction and mining.
Electric cars are only one component of the certain and massive growth in demand for electricity between now and 2050.
It is inevitable that many nuclear power plants (whether using uranium or thorium) will be built over that time. They should be designed by the people who do safety best, and that includes Australians.
It is time the Australian Labor Party stepped away from its clumsy mid-1980s Cold War-inspired bans on all things nuclear, and funded some research and development aimed at getting a world leading safe nuclear industry underway domestically. Oh, and throw out the silly legislation.
Foresight wanted!
I feel we put on far too much emphasis on finding new energy sources. We must put more emphasis in increasing the energy efficiency of current equipment and reduce waste in electricity generation. If we combine these, we can achieve at least a 30% increase in available power from existing sources. Ideas such as the Desertec proposal and Ceramic Fuel Cells have a lot’s of merit. I fear that it may be easier to accept higher fuel prices and keep our heads in the sand in the hope that future generations are able to fix the mess we made. I do also fear that a Carbon Tax will achieve absolutely nothing. Most people and industries will be compensated for the increased costs of a carbon tax, which means that there is very little incentive to do anything. I am sure that countries like Germany and Japan will lead the rest of the world in finding better ways in using and producing electricity. These countries are having very few energy sources within their borders.
Thorium
Gregory Olsen,
Sorry but thorium is literally years away. Maybe two decades. No disagreement with you but timing is all wrong.
As a solution to GW, I couldn't bear the whining from the solar and wind crowd, "are we there yet, are we there yet...".
I don't think the message has yet sunk through the populace, so the more this is discussed the better. I don't think people will be at all happy of seeing evry ridge lined with poles, transmission lines thousands of kilometres crossing the country and nowhere where you can't go without seeingsolar glare.
The cost of all that power, transmission and upgrades to the existing distribution and transmission systems, not even yet factoring in increase electric car use...all this adds up to a 3 fold increase in power bills.. But not only that, the impact on costs throught the economy..everything that has a single joule of electricity is going up. But one thing that won't will be your SALARY!
Thats is why all the renewables results in a drop in living standards.
Look at it another way. Renewables promises many more new jobs than lost from existing power generation. Great. But where are the economic efficiencies gained that pay for these new jobs? And better where are these efficiencies that provide even more benefit than jusy jobs? You cab try and evaluate the externalities cost savings..but who says there will be any savings if no other country in the world does anything.
I think eventually commonsense will prevail and we'll stop the renewable lunacy, cooler heads will prevail, and if this BBC report is correct ..
"Yesterday I asked an audience of 800 sixth-formers their opinion and, although they were pleased they weren't in Tokyo, the majority still thought nuclear was a sensible option for future energy."
..then the future has a chance.
Whay Aren't We Talking About Energy From Thorium?
Uranium is DEAD as a fuel for nuclear power stations. Thorium is a commercially available alternative that doesn't have weapons grade waste, can't meltdown and actually uses and neutralises the waste from uranium fueled power stations: http://energyfromthorium.com/essay3rs/
Now, I don't support ANY nuclear power stations for Australia as we have enuff solar and wind access to give us 100% renewable energy within 12 years if we chose to do it as Beyond Zero Emissions' Zero Carbon Australia Report posits: http://beyondzeroemissions.org/
That is actually disgusting
That is actually disgusting what Ann Coulter has said. She should be sacked for this unless Mr Murdoch is acrtually benefitting from it - maybe she will get a promotion.
Keep you feet on the ground
Keep your feet on the ground with respect to future renewables power installations. Over the next decade you anticipate, per year, 16GW of nuclear (that's power 24 hours a day) and 92GW of renewables, (that's about 35GW actual and little as base load power). During that time, China alone will install 40GW a year of additional coal power, that is after allowing for closure of old polluting (particulate matter, NO2, SO2, etc) power stations; in contrast, China's solar and wind proposals are for about 6 GW a year actual and as you state about 8GW of base load nuclear. All of these will make a difference to local smog etc.; however, they will make so little difference to the world's changing climate.
Roll on the day that facts resume their importance and also remove the confusion over man-made carbon dioxide being a pseudonym for climate change.
More pro nuclear rubbish
John Bennetts - "Knee-jerk picking of winners, such as support of so-called green power in the form of domestic rooftop solar PV or ridgeline wind power programmes as Australia is continuing to do, is a surefire way to waste more billions of dollars, to make our power supplies less and less reliable and to fritter away irreplaceable decades, while the earth continues to heat up and the oceans rise. "
So picking nuclear as the winner is not a knee-jerk reaction? How do you know nuclear is the best? Surely in the 50+ years of its operation, if it was in fact the winner, it would have won by now instead of being in a steady decline.
"Only the very oldest nuclear power plants contain the risks that we have seen so vividly during the past week or two."
Is that the tack you are taking? In one breath you are dismissing this accident as being old reactors, however most of the nuclear fleet is in fact this old or older as very few new nuclear reactors have been built. Additionally one of the things that you pro nuclear people have been pushing is that nuclear reactors can operate for 60 years or more. Are you now changing this to limit the life of nuclear reactors to less than 40 years? If so that dramatically increases the LCOE as there is less than half the time to amortise the staggering cost of the plant made even higher by the increased safety measures that this disaster will demand.
Nuclear is an expensive boondoggle that distracts the world from the what may be the only real chance humanity has to survive climate change. Nuclear power gives the illusion of limitless energy fostering a wasteful culture where energy conservation is ridiculed.
We need to power down and innovate. Deply renewables after we decide on what we want to power. Nuclear should be reserved as a power source of last resort where no renewables can work.
Coal and gas the winner, climate the loser
Yes, it is still too early to say...but that won't stop pundits and investors from speculating. As to 'the extent...renewables and energy efficiency can fill the void', you only have to look at how stocks like Peabody Energy (world's largest private-sector coal company) and Woodside have risen since Fukushima panic broke out, to get the answer to that.
Pro nuclear but certainly not pro radiation
Ann Coulter may have suffered a brain collapse in relation to radiation exposure, however that does not apply to all who consider nuclear energy to be a potentially strong factor towards a better tomorrow for mankind and the globe.
Only the very oldest nuclear power plants contain the risks that we have seen so vividly during the past week or two. Current nuclear power plants have many times the security against overheating of the older ones, by which I include Three Mile Island and Chernobyl. The accidents in which these were involved are simply not possible using current designs.
Apart from offering the safest (yes - safest) form of power generation known to mankind, modern nuclear power plants offer reliability and much cheaper cost than, for example, solar PV, solar thermal and wind. The fear mongering is, no doubt, going to continue, at least until people of the world learn to object to the waste of money, space and time that comes with wind and solar and demand the security of supply that only nuclear technologies can bring to a low carbon world. Add to that, the desires to stop mining, including stopping mining of uranium, which can be achieved via existing technologies and Type IV reactors. Then consider that Type IV reactors are the best and perhaps the only way to burn up and thus remove for ever the warheads and spent fuel which has accumulated over more than half a century.
Now is not the time to be planning new nuclear reactors, while the world reconsiders its energy options and weighs the downside of old nuclear generators, some astride fault lines. When the time comes to return to the big energy picture, modern fission reactors including the emerging Type IV should (must?) be considered alongside all other contenders and all must be assessed against similar criteria.
Knee-jerk picking of winners, such as support of so-called green power in the form of domestic rooftop solar PV or ridgeline wind power programmes as Australia is continuing to do, is a surefire way to waste more billions of dollars, to make our power supplies less and less reliable and to fritter away irreplaceable decades, while the earth continues to heat up and the oceans rise.
nuclear power
Let's now promote Thorium nuclear power. No chance of a meltdown, and many other advantages.