While the Japanese earthquake aftershocks will stop in a few months time, allowing Japan to recover, the shocks may prove terminal for the green nuclear renaissance.
In the week since Japan was rocked by the fifth biggest recorded earthquake in history there have been more than 500 aftershocks, and we can expect more than a thousand more before the sequence stops in a few months times. But the repercussions for nuclear power will last very much longer.
Nuclear power is a bit player in the global electricity market contributing about 14% of all electric power. In France it contributes about 78% providing ample demonstration that nuclear power can underpin an advanced economy.
Despite its early promise that it would be too cheap to bother metering, the industry has struggled to increase market share in recent decades. But with the growing realization that we must curb CO2 emissions if we are to avert dangerous climate change there is anticipation in the industry of a new green nuclear renaissance. And so Fukushima could not have come at a worse time.
The downside to nuclear is well known. There is immense fear of any radiation exposure. A historic connection with nuclear proliferation is the industry’s bugbear and still, after 50 years, long-term solutions to waste disposal have yet to be enacted in any meaningful way.
To nuclear advocates ready solutions are at hand. The fear of radiation is irrational, they claim. Natural occurring low-level radiation exceeds the risk to exposure from nuclear power generation at a very high level of probability. They point to technologies that can make nuclear effectively immune from proliferation, and which leave very little waste.
Nuclear advocates are at pains to emphasize a history that shows nuclear has the lowest fatality rate per unit of electricity production of any of our mainstay technologies, trumping hydropower by a huge margin. They argue that the most serious accident involved a reactor – Chernobyl – that would never have been licensed in the west. And, in any case, only a few dozen deaths can be unambiguously attributed to the uncontrolled release of radioactive material from the world’s nuclear power plant fleet.
To advocates, the volume of waste is trivial – hardly enough to fill a football stadium. Besides, they argue today’s waste is tomorrow’s fuel.
On the other side, the anti-nuclear proponents see it all the more remarkable that such supposedly easy solved problems have not yet been solved. To them it all points to deeply worrying issues at that the very heart of the nuclear industry.
But ultimately the reason nuclear remains a bit player in the world’s electricity market is that it just hasn’t been able to compete for cost. It is not alone, as nothing can compete with coal-fired power without a price on CO2. At least, not yet.
But the emerging battle for nuclear is with renewables, not with coal. Prior to Fukushima most pundits had nuclear with the edge over renewables.
But the Fukushima problem, as history demonstrates, is that costs rapidly escalate when stringent safety regulations are enforced, partly because it dramatically slows down build times. Financing the huge capital costs of nuclear is a key issue, and it’s proving much cheaper to build nuclear in centrally planned economies than in democratic market economies.
In Finland, the new Olkiluoto reactor has had a 3-year overrun, with a 50% cost blowout. As a first-of-a-kind promised by a competitive open market to offer better than its alternatives, it wasn’t cheap in the first place. Recent experiences in the US are not much different.
While there will be many enquires into the Fukushima disaster, the simple reality is that the power companies took a risk that history now shows didn’t pay off. The design specification allowed for an earthquake that shook the ground at accelerations up to 0.8g and was secure to a tsunami height of 6 meters.
The plant withstood the shaking, and so it should have. At 0.4 g the ground accelerations of were only about half what the design called for. Tragically, the plant was never designed to survive the 10 metre tsunami that knocked out the back-up power generators.
Fukushima is not the first Japanese nuclear plant to suffer a massive financial hit at the hand of nature. In 2007, the 8 gigawatt Kashiwazaki-Kariwa plant – the largest nuclear facility on the planet – was put out of action for 21 months. A magnitude 6.6 earthquake struck close by and produced ground accelerations of 0.6g. Although it shouldn’t have caused any damage, it did. In market terms, the value of lost electric power production was about A$5 billion.
While the full consequences of Fukushima disaster are still to be played out, several things are certain. The plant is a write off and will cost several tens of billions of dollars to replace.
But more importantly is that governments and markets will now be more risk averse. And that is certain to make nuclear more expensive.
At the same time, renewable costs are rapidly reducing. With solar costs reducing at a rate of 22% every 18 months, nuclear’s competitive edge over renewables could be gone as soon as 2016.
The nuclear industry will be sensitive to this timeline. It understands that a stalling in sentiment for just a few years could be critical. By the time nuclear recovers from Fukushima, the battle may be lost.