The End of Nuclear Power? Or Just the Beginning?

This week’s news: US NRC freezes decisions on new reactor, license renewal applications

“The US Nuclear Regulatory Commission voted unanimously Tuesday not to issue final decisions on granting licenses to build new nuclear power reactors and 20-year license renewals to existing ones, pending resolution of the agency’s waste confidence rule overturned by a court in June.

The commissioners, however, also ordered that NRC review of these license applications continue and that the agency’s Atomic Safety and Licensing Board Panel not accept or deny new challenges that may be filed in these proceedings relating to waste storage issues.”

Nukes in the US not dead of course, but the revival still on hold?


The post Fukushima nuclear future in Japan?  Still shut down, the replacement generation fleet still a patchwork.  The future is . . .?


And Germany?  Trying to get out of nukes puts intense pressure on gas (from Russia), renewables, and the grid.  As well as adds costs. Prognosis unclear.


Has Fukushima changed China’s nuclear energy ambitions? Or just its technology choices?


And exactly what are the costs for nuclear?  I will say generally, that on a cents per kwh basis, the broad lowering of interest rates benefits nukes better than any other form of power but hydro, given the combination of high portion of the of costs from the capital, and the high capacity factor.


So is the end of nuclear power’s 50 year challenge to coal power insight?  Or are we on the verge of a resurgence?  Situation unclear at best.

2011 In The Rear-View Mirror: Objects May Be Closer Than They Appear

It’s that time again:  sifting through the detritus of a calendar year to sum up what’s happened over the past 12 months. 

Everybody’s doing it — for news, sports, movies, books, notable deaths…and now even for cleantech:  here’s the scoop from MIT’s Technology Review, and here’s a post on GigaOM.

So, my turn [drum roll, please], here’s my top 10 take-aways from 2011:

  1. Solyndra.  The utter failure of Solyndra, and the messy loan guarantee debacle, has been a huge black-eye to the cleantech sector.  It’s a political football that will be kicked around extensively during the 2012 election cycle, further widening the schism of support levels by the two major U.S. political parties for cleantech.  In other words, cleantech is becoming an ever-more polarizing issue — with Solyndra serving as the most visible tar-baby.
  2. Shale gas and fracking.   A chorus of ardent proponents of natural gas development, most vocally Aubrey McClendon, the CEO of Chesapeake Energy (NYSE: CHK) — the largest player in the shale gas game — is repeatedly chanting the mantra that shale gas is so plentiful that it can very cheaply serve as the major U.S. energy source for the next several decades.  And, recovery of this resource will create a bazillion jobs for hard-working Americans in rural areas.  In this view, who needs renewables?  Interestingly, this view also poses increasing threats to coal interests as well.  On the flip side, of course, the concerns about the use of fracking techniques, and the implications on water supplies and quality, are constant fodder for headlines.  Clearly, shale and fracking will continue to be hot topics for 2012.
  3. Keystone XL.  The proposed pipeline to increase capacity for transporting oil from the Athabasca sands of Alberta to the U.S. is the current lightning rod for the American environmental community.  Never mind that denying the pipeline’s construction will do very little to inhibit the development of the oil sands resources — Canadian producers will assuredly build a planned pipeline across British Columbia to ship the stuff to Asia.  Never mind that blocking the pipeline will do nothing to reduce U.S. oil consumption — which is, after all, the source of the greenhouse gas emissions that opponents are so concerned about.  This has become an issue of principle for NRDC and other environmental advocates:  “we must start taking concrete steps to wean ourselves from fossil fuels.”  Nice idea in theory, but this action won’t actually do anything to accomplish the goal, and will only further paint the environmental community in a damaging manner as being anti-business and anti-economics.  In my view, we have to work on reducing demand, not on curtailing supply; if we reduce demand, less development of fossil fuels will follow; the other way around doesn’t work.  The Obama Administration has punted approval for the pipeline past the 2012 election, but Keystone XL — like Solyndra — will be a major framing element in the political debates.
  4. Fukushima.  The terrible earthquake/tsunami in Japan in March killed over 20,000 people — and sent the Fukushima powerplant into meltdown mode in the worst nuclear accident since Chernobyl in 1986.  As costly and devastating as Fukushima was to the local region, it pales compared to the damages caused by the natural disasters themselves.  Even so, the revival of the perceived possibility that radioactive clouds could spew from nuclear powerplants put a severe brake on the “nuclear renaissance” that many observers had been predicting.
  5. Chevy Volt.  Released after much anticipation in 2011, sales of the plug-in electric hybrid Volt have been well below expectations.  Furthermore, as I recently discussed here, a few well-publicized incidents of fires stemming from damaged batteries have been a huge PR blow to gaining widespread consumer acceptance of electric vehicles.  Clearly, Chevy and others in the EV space have their work cut out for them in the months and years ahead.
  6. Challenges for coal.  As I recently wrote about on this page, the EPA has been working on promulgating a whole host of tightened regulations about emissions from coal powerplants.  These continue to move back and forth through the agencies and the courts, and coal interests continue to wage their battles.  But, between this set of pressures and low natural gas prices (see #2 above), these are tough days for old King Coal.  Not that they couldn’t have seen these challenges coming for decades, mind you, and not that some of their advocacy organizations don’t continue to tell their pro-coal messages with some of the most heavy-handed and dubiously factual propaganda outside of the recently-deceased “Dear Leader” Kim Jong Il
  7. Light bulbs.  One of the most absurd and petty dramas of 2011 unfolded over the planned U.S. phase-out of incandescent light bulbs, as provided for in one of the provisions of the Energy Independence and Security Act of 2007Representative Joe Barton (R-TX) led a backlash against this ban, arguing that it was an example of too much government intrusion into consumer choice — and succeeded in having the ban lifted at least for a little while, tucked into one of the meager compromises achieved as part of the ongoing budgetary fights.  This was accomplished against the objections not of consumers, but the objections of light bulb manufacturers themselves, who had already committed themselves to transitioning to manufacturing capacity for the next-generation of light bulbs:  CFLs, LEDs and halogens.  Now, the proactive companies who invested in the future will be subject to being undercut by a possible influx of cheap imported incandescent bulbs.  Way to go, Congress!  No wonder your approval ratings are near 10%.  Is it possible for you guys to focus on the big important stuff rather than on small bad ideas? 
  8. PV market dynamics.  Solyndra (#1 above) failed in large part because the phovoltaics market has become much more intensely competitive over the past year.  Module prices have fallen dramatically — no doubt, in large part because the market is now saturated by supply from Chinese manufacturers, who are sometimes accused of “dumping” (i.e., subsidizing exports of) PV modules into the U.S. marketplace.  This is stressing the financials of many PV manufacturers, including some Chinese firms and other established players.  For instance, BP (NYSE: BP) announced a few weeks ago its exit from the solar business after 40 years.  However, the stresses are falling mainly on companies that employ PV technology that cannot be cost-competitive in a lower pricing regime, whereas some of the new PV entrants — not just Chinese players, but some U.S. venture-backed players like Stion (who just raised $130 million of new investment) — are aiming to be profitable at low price levels.  And, after all, the low prices are what is needed for solar energy to achieve grid-parity, which is what everyone is seeking for PV to be ubiquitous without subsidies. 
  9. Subsidies.  Ah, subsidies.  In an era of increasing fiscal tightness (see #10 below), pro-cleantech policies are under greater scrutiny.  In particular, renewable portfolio standards are being threatened by state legislators of a particular philosophy who are opposed to subsidies in all forms.  The philosophy is understandable, but the lack of understanding or hypocracy is less easy to defend:  the status quo is almost always subsidized too, especially during its early days of development and deployment — and often remains subsidized well after maturity and commercial profitability.  Fortunately, there’s an increasing body of high-quality work that assesses the energy subsidy landscape in a generally objective manner, such as this analysis released by DBL Investors in September.
  10. Europe.  Although not a cleantech issue per se, the vulnerability of the European economy, the European Union, and the Euro in the wake of the various debt crises unfolding across the Continent is a major negative factor for the cleantech sector.  Europe is the biggest cleantech market, and many of the leading cleantech investors and corporate acquirers are European, so a recession (or worse, depression)  in Europe will be a very big and very bad deal for cleantech companies.

In all, 2011 was not a great year for the cleantech sector, and I don’t see 2012 being much better.  But, that’s not to say that good things can’t happen, or won’t happen.  Indeed, there will always be rays of sunshine among the clouds…or, to use another metaphor, you’ll always be able to find a pony in there somewhere.

Happy New Year everyone!

Fukushima: Where It Stops, Nobody Knows

The staggering trifecta of disasters in Japan created images of horror that will last for decades.

A 9.0 magnitude earthquake shook buildings hundreds of miles away, sending office workers in Tokyo skyscrapers scrambling under desks while trembling video recorded the screams of terrified occupants and the freakish sight of rippling floors and walls.

A massive tsunami of proportions unimaginable without helicopter-based footage for documentation swept away seemingly endless numbers of buildings and vehicles as if they were toys, drowning untold thousands of people.

But, it was the accidents at the Fukushima Dai-Ichi nuclear powerplant operated by Tokyo Electric Power Company (Tokyo: T) that made for the most chilling legacy.  Although several spectacular explosions beset the plant – all for the lack of robust systems to keep supplying cooling water in the wake of the destruction of the earthquake and tsunami – it was what couldn’t be seen that bothered people the most:  the invisible radioactive emissions and the scary (if not fully-grounded) fears of torturous poisoning from clouds floating downwind thousands of miles that captured the world’s attention.

Although it seems as though the worst of the situation is finally behind us, it will be some time until some degree of stability returns to Fukushima.  “Normalcy” will not return to that area for many decades, perhaps centuries. 

With the crisis past now its most critical point, just about everyone on the planet is reassessing the future place of nuclear in the global energy equation.

Germany has ordered a shutdown and review of the older segment of its nuclear powerplant fleet, and China suspended for the time being the approval process for new nuclear plants.  In the U.S., President Obama has asked the Nuclear Regulatory Commission to reassess the safety of U.S. nuclear powerplants, especially those that are most exposed to the risks of earthquakes and tsunamis, most notably as San Onofre and Diablo Canyon along the coastline of Southern California.

General Electric (NYSE:  GE), the supplier of the nuclear technology at Fukushima, suffered significant declines in its stock price, as investors and traders worried that GE would be liable in some manner to some degree for the enormous costs and consequences that are likely to be borne for years to come in tending to Fukushima – which is almost certainly destined to become, like Chernobyl, an entombed monument never to operate again, surrounded by vast swaths of abandoned land.

Even with all this angst, no-one really knows what Fukushima means in the long-term for nuclear energy – whether it’s a knockout blow or merely an admittedly severe setback.  I’ve asked several friends active in various aspects of energy for their perspectives on the Fukushima disaster, and there’s a collective shrug and hand-wringing reflecting a general bewilderment.

Far be it from me to suggest I have a clearer view than my esteemed colleagues.  However, these are the questions that I think need to be asked and answered to develop a consensus by respected voices from the energy industry – both inside and outside nuclear – if the so-called “nuclear renaissance” promised over the past couple of years will in fact ever materialize post-Fukushima.

  • What can the nuclear industry do to convincingly assure the public’s trust that the authorities are really telling the whole truth and nothing but the truth?  Apparently, many Japanese had historically been highly distrustful of their nuclear authorities — based on previous examples of real or perceived deceit, cover-ups, lies, etc. — before Fukushima.  Even the U.S. government indicated at times that they weren’t sure they were being fully informed about conditions at Fukushima.  As a friend of mine — who possesses a Ph.D. in nuclear engineering — commented to me at one point last week, “They’ve stopped communicating, which means they’re either too busy to communicate, or they don’t want us to know.  Either way, it’s bad.”   This distrust is not unique to Japan.  Any industry that has Homer Simpson (the Safety Inspector at the fictional Springfield Nuclear Power Plant) as its most visible icon is going to struggle to maintain a confident public.
  • How can everyone be sure that the lack of sufficient cooling water in the wake of a disaster will never befall a nuclear plant again?  If there’s anything a nuclear reactor must have, it’s continued access to cooling water under any and all contingencies.  In the case of Fukushima, the power lines were swept away and the diesel backup generators were swamped by the tsunami, eliminating the capability to keep the reactors cool — hence, the cascading failures.  Every nuclear powerplant needs to be proven to have multiple levels of redundancy on cooling water supplies.   
  • How would evacuation plans really work?  As part of its operating license from the Nuclear Regulatory Commission, the operator of a nuclear plant must file an emergency preparedness plan.  A “full-scale exercise” is required every two years, but it’s far from clear that these “exercises” are indicative of how a sure-to-be-panicked public would respond.  For certain plants, such as Indian Point less than fifty miles north of Manhattan, a truly effective evacuation seems fanciful.
  • What is the next-best solution for baseload supply of electricity available today and for many decades to come?  With nuclear now clearly out of favor, general antipathy towards coal power due to its environmental impacts, and the widely-held desire for energy prices to be as cheap as absolutely possible, the only remaining option for 24/7 power generation at any meaningful scale would appear to be natural gas generation.  To be sure, with the recent boom in domestic production from shale gas reserves, it seems as though there’s an abundance of natural gas and low prices to last for years to come.  However, this was also the prevailing sentiment during the 1990s, spawning a slew of new natural gas powerplants that chewed up all of the seeming glut of natural gas, thus driving natural gas prices to historic levels before the economic collapse in 2008.  No reason in my mind it can’t happen again in the 2010s.
  • What are the true, full costs of nuclear energy?  If there’s anything obvious about Fukushima, it’s that the costs of building and operating a nuclear plant are now much, much higher than they were a few weeks ago.  Exactly how expensive remains unclear.  Even before the incident, the full costs of nuclear energy were obscured from the public in a variety of ways, such as the large R&D expenditures by the government on nuclear technologies.  Arguably, the costs associated with waste disposal, plant decommissioning, and emergency response have been underfunded over all of these years of nuclear operations; for certain, a definitive approach for the waste disposal issue has been continually deferred for decades.  Perhaps the most obvious subsidy is the DOE loan guarantee program, which makes the taxpayer the creditor of last resort in the event of default by a nuclear powerplant owner.  If a Fukushima-type situation were ever to occur in the U.S., it is virtually certain that the owner would be financially broken, leaving the U.S. citizen to pick up a bill that is truly incalculable.

Until there’s a much higher degree of comfort that there are good answers to these questions, it doesn’t seem likely to me that there will be significant public acceptance of nuclear energy as a viable option for new choices to be made in the future.  In which case, the previously-coalescing-but-fragile support for nuclear from across the political spectrum (see Time article from just six months ago) will have splintered, perhaps a Humpty-Dumpty never to be put back together again.

In concluding, I will restate my record as saying that I’m not necessarily opposed to nuclear energy, and support it under the right conditions:

  • The plant needs to be located at a sensible site
  • The operator needs to have an excellent operational record and processes for maximizing safety without concern for cutting-corners to maximize profits
  • A sound and scalable permanent waste disposal process must exist

We as a country are failing the third test, and in many cases, the first two aren’t in place either. 

Will a Fukushima happen here?  Probably not.  Can a Fukushima happen here?  Yes.

Should we get panicky?  No.  Should we be more concerned, and be willing to pay more attention (and money)?  Yes.