Cape Times 17 April 2012.
(Op Ed by Peter Haylett, Chairperson of the industrial focus committee of the Cape Chamber of Commerce and Industry. )
(Editorial note: If only our powers that be would read and research nuclear energy more widely instead of believing their advisors – and we don’t know who these advisers are – nuclear manufacturers, NECSA?)
BUILDING nuclear power stations no longer makes any kind of commercial sense. They are simply too expensive and the alternatives are getting cheaper all the time.
Study after study has revealed that new nuclear power plants will be unable to compete with the cheaper electricity produced by coal and especially gas-fired power stations.
And, as the authoritative Economist magazine has pointed out, “renewables are getting cheaper through technological change, the benefits of mass production and market competition. In the long run technologies that get cheaper can be expected to edge out a technology that has only ever got more expensive”.
In its major review of the nuclear industry, the Economist concluded that nuclear power and the idea of a nuclear renaissance was “a dream that failed”.
The problem has not been fear of nuclear disaster, the disposal of radioactive waste or any of the concerns raised by a vociferous anti-nuclear lobby, but a simple one of economics. The Economist quotes John Rowe, CEO of Exelon, a US energy company that has 10 nuclear power stations in its portfolio, as saying that companies like his no longer have any reason to build nuclear plants. There are cheaper alternatives.
A 2010 Australian study by Professor Anthony D Owen of the UCL (University College London) School of Energy and Resources, found that “investment cost at the design stage for a nuclear plant is about twice that for coal and three to four times that for combined cycle gas turbine plants”. He also points out the problem of cost overruns, particularly in the nuclear field where, for example, the Olkiluota reactor in Finland is three years behind schedule and about 100 percent over budget.
One of the reasons for this is that nuclear power stations are designed and built to order in a process that can take as long as 10 years and more, while gas power stations can be built in just two years with off-the-shelf modules. It is much easier to contain costs in a short build and standard modules come at predictable and competitive prices.
Last year a study by the US Energy Information Administration examined the cost of electricity from new power stations that would come on line in 2016. It found that coal costs would be $94.80 per MW hour, nuclear electricity would cost $113.90 while combined cycle gas power plants would deliver power at just $66.10 per MW hour.
Geothermal energy, wind power and power from biomass all produced cheaper electricity than nuclear power stations.
With figures like this it is clear why companies like Exelon (once an investor in the SA pebble bed project) have backed away from the idea of building new nuclear power stations. By 2030, says the Economist, nuclear reactors will produce only 15 percent of electricity in the US, down from the present 20 percent.
Hopes of a nuclear renaissance were based largely on the fact that nuclear power plants emit negligible levels of greenhouse gases. But that is just part of the story, for the Australian study points out that “production of their fuel (enriched uranium) from mining to disposal, construction of the power plant and other process steps, may involve increases in greenhouse gas emissions in excess of those arising from fossil fuel technologies to meet the same level of energy requirements”.
The second big problem with the present generation of nuclear power stations is that they are inflexible. They are big and have to be kept running 24 hours a day, but the demand for power is uneven and falls sharply after dark. Making the situation more difficult to manage is the growing use of renewable generation capacity, especially wind power.
Solar power can also be expected to play an increasing part in the energy mix, especially in a sunny country like SA but it, too, is a variable source and needs to be coupled with more flexible power stations.
Advances being made in photovoltaic panels to produce electricity directly from sunlight provide a clear indication that prices will come down as new technology feeds through from the laboratory to the factory. In addition, concentrated solar power may still look expensive but costs should come down.
The final and perhaps biggest problem with nuclear power is that most of the money spent on the reactors will be money leaving this country. It is exactly the same problem as SA faced with the arms deal but this time it will be much, much bigger.
In the case of the arms deal, the suppliers came up with a range of wildly exaggerated plans for “off-sets” to feed investments and know-how back into our economy.
Somehow they were going to give us more money than we spent on their ships and aircraft. It did not make sense and it did not happen. We are still unpacking that scandal.
No doubt there will be similar promises from the nuclear industry but this time we should know better than to believe them.
· Haylett is chairman of the industrial focus committee of the Cape Chamber of Commerce and Industry.