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Optimism is the way forward – Nuclear Power delivers

We had an important piece of good news this month as Sendai Unit 1 was restarted in Japan, ending a long period of no nuclear generation in that country after the Fukushima accident in 2011. Sendai Unit 2 is following close behind and Japan will continue to restart many of its nuclear plants as it moves to put the accident behind it and reap the benefits of nuclear generation once again. Recent experience without nuclear has led the country to import vast quantities of fossil fuels, increase its carbon emissions and damage its balance of trade. While difficult for many, the Japanese understand the benefits of continuing with nuclear power are essential to the well-being of their society.

Sendai Nuclear Japan

                                                   Sendai Nuclear Power Plant

Unfortunately as we have learned from this accident so far, it is fear of radiation that is having the largest impact on peoples’ health rather than the radiation itself. To date no one has died from radiation at Fukushima and no one is likely to die from radiation in the future, yet fear is what is consuming these people and their lives – and the policy decisions being taken by government.

Of course, we must always think about those that were directly impacted by the accident. Many remain out of their homes and those that are permitted to return are often afraid. We must continue to understand their plight and work together to help them get their lives back and of most importance, once again have hope for their future.

A couple of weeks ago I was watching Fareed Zakaria on CNN interview President Obama about the Iran nuclear deal. I don’t want to talk about that here but I do want to share Fareed’s thoughts on President Obama’s optimism. He suggested that Obama is an optimist and noted that “history suggests that it’s the optimists who have tended to be right”. He went on to say that “today we are awash in pessimism, with people who see the world as a dark and dangerous place, where threats are growing and enemies are gaining strength.”

It made me think of our own world of nuclear power, where we are awash in pessimism; And it is easy to be pessimistic when articles such as the one by Michael Ignatieff, (who has previously run for Prime Minister of Canada) concludes after his visit to the Fukushima area with a message that seems to be the prevailing view of nuclear power to many. “For the rest of us, outside Japan, we have moved on, more dubious about nuclear power than before, but still locked into the energy and economic system that requires it. Fukushima is now classed with Three Mile Island and Chernobyl in a trio of warning disasters, but so far none of these has persuaded the world, at least so far, to exit nuclear.” Clearly the message is – we need it for now, but when are we going to realize that the risk is just not worth the benefits?

It is easy to be pessimistic when there are documentaries that reach similar conclusions. In “Uranium – Twisting the Dragon’s Tail” by Dr. Derek Muller, a physicist by training, the two part series focused on the bomb in Episode 1 and on the accidents at Chernobyl and Fukushima in Episode 2. Watching one can see that positive facts are presented such as radiation is not as dangerous as people think but the series is not about the benefits of nuclear power – rather it focuses on fueling the fear.

And there is no doubt the biggest issue is fear of radiation. As stated in Mr. Ignatieff’s article, “Today, Tokyo shoppers still won’t buy rice, soya, or miso produced in the region and nobody will touch the catch from the local fishermen, even though the fish have been pronounced safe.” On his visit to the region he says “In the enclosed valleys, as our bus climbed up the winding roads towards the coast—still many miles from the nuclear plant—radiation rose to double the levels in Tokyo. We’re told it’s safe to travel to Namie but it’s still not clear what safe means.” After this accident trust is in short supply and lack of trust definitely increases the fear.

What is also clear is that setting policy based on fear does not result in good policy. In Germany, they prematurely shut down safe, effective and economic plants much earlier than needed. Even while building a huge amount of renewable generation, the Germans had to also build new coal plants both increasing electricity costs and emissions. It doesn’t take much to realize that even with a strategic goal of eliminating nuclear power, taking the time to build clean replacements and shutting the existing plants down more slowly would have worked just fine – but setting policy driven by short-term fear of radiation doesn’t allow for sensible decisions. With over 200 nuclear plants throughout Europe, nuclear power has been a safe and essential element of electricity generation for decades without a single incident of harm.

Going back to what was said by Fareed Zakaria, “history suggests that it’s the optimists who have tended to be right”, we definitely choose to be optimistic and here is why.

The world needs clean and abundant energy for a better future for us all. For those with limited or no access to a reliable source of electricity, providing this resource makes a huge positive impact in their standard of living. And while we all agree that in richer countries there is opportunity to become more energy efficient, just look how dramatically our lives are impacted if there is an outage for any sustained period of time. Nuclear energy meets that need. It provides clean, abundant, economic and reliable electricity. Its energy density is matched by none so it can provide huge quantities of electricity from very small quantities of fuel, clearly what will be needed as the world population approaches 9 billion in the years to come.

The rapidly growing economies in the world like China and India are very aware of the benefits that come with robust nuclear programs as they embrace nuclear power to support their rapid growth in energy demand. Other energy-poor countries are also eager to move forward. The 67 units under construction around the world represents the largest new build program in decades and while many (25) are being built in China, the rest are distributed in 12 different countries.

But most of all what makes us optimistic about the future are the large numbers of energetic, bright and talented young people entering the industry. This month I had the opportunity to lecture at the World Nuclear University Summer Institute in Uppsala, Sweden. The current generation of young engineers and scientists have grown up in an era where they are strongly supportive of technology and believe that anything is possible if they put their mind to it. It did not take long to see that the future of the industry is in good hands.

The time has come to get off our hind foot and stand up proudly and proclaim what we know to be true – that nuclear power has an important place in the world and will continue to expand its role as we need reliable economic and abundant energy for society. It is an essential energy option of choice, not of last resort, that we shouldn’t wish we could do without.

Reliability means being connected – we need a strong integrated electricity system with nuclear generation as its workhorse

It was with great fanfare that Tesla launched its home battery recently.   Headlines like “Tesla launches Powerwall home battery with aim to revolutionize energy consumption” were the norm as the public read about this revolutionary jump forward in energy storage. A recent article on where famed author Margaret Atwood is investing says it all …. “if [Tesla CEO] Elon Musk was putting his Powerwall on the market, I would certainly buy a piece of that. My feeling is that, once that becomes affordable, everyone is going to do that. I think that’s definitely the wave of the future.”

After all, this is the dream isn’t it? We can all generate our own electricity with clean energy efficient solar panels and store enough on our home batteries to keep us going when the sun goes down. What can be better for our common future?

Well, in fact, just about everything.

It must be my age and my years in the energy industry that remind me of what are the real essential attributes of electricity supply. Reliability and Economics. Yes, that’s right. For anyone who works in a modern electricity utility, that is what they focus on; delivering cost effective reliable electricity to users. And in today’s energy intensive world where we need electricity for every aspect of our hyper active and energy intensive lives, this is even more critical. We have all experienced temporary blackouts and know well the negative impact it has. The problem then with renewable energy generated at home is that, at least for now, it is neither reliable nor economic. Since the announcement from Tesla there have been a number of articles that explain this in detail, but of course supporters will just say that in time all problems will be solved. And frankly they may be right.

solaratnightv1

So let’s step back and ask ourselves a more important question – are we trying to solve the right problem? Most people have no idea what it takes to generate and deliver the electricity (the so-called “grid”) we take for granted in the modern world. In fact, many just think electricity is something that comes out of the wall outlet. What we all want is that when we turn on the switch, or plug in our phones, it just works. We are not in any way prepared for a world in which we say – oh, it’s cloudy so we better not charge our iPhone today! I love the recent TV ads where BMW is explaining how they build their new I3 electric car in wind powered factories. Yet, do any of us really think that on days when it is not windy, these factories sit idle? No, of course not.

In most advanced economies around the globe we have achieved a high level of reliability in electricity supply. In fact this is one of the measures that makes an economy ‘advanced’. The problem is that much of our electricity is generated with fossil fuels; primarily coal. (Coal continues to be the largest source of Germany’s electricity where BMW has its factories, at nearly 50% of total supply). And along with this comes both pollution and a high level of carbon emissions. Therefore, the only way to address these environmental issues is to reduce the use of fossil fuels, not to eliminate an integrated grid.

Just like being connected to the internet improves our lives, so does being connected to a reliable electricity grid. Do we really want to live a life where if it is cloudy for a few days and our batteries run dry we do without? Of course not. Just imagine how much excess battery capacity we would each need to avoid this possibility. Even Elon Musk notes that his battery is currently for emergency backup – not for daily use – and yes it would be great to have some amount of reasonably economic backup for when we experience an outage. But as is starting to be seen in California where there are numerous discussions of the “duck curve”, people want it all – they want to generate their own electricity when they can believing this is the best approach, but they also want the system to be there just in case they need it; and at a moment’s notice. The result – higher costs all around. The less the grid system is used, the more it costs to keep the infrastructure in place to make up the shortfall when needed.

The answer is simple, let’s take what works and make it even better.  That is a large interconnected grid that includes large scale reliable economic generation based on nuclear power, and hydro where available, supplemented by wind and solar depending upon the local availability of these resources. To be reliable and cost effective, a system needs generation that can run all the time, not just when the wind is blowing or the sun is shining. As storage technology improves, it can then contribute to both help manage the intermittency of renewable generation as well as flattening the demand curve to enable an even larger share of nuclear generation.

Remember, our economy, and in fact our very way of life, is completely dependent upon the availability of reliable, clean and economic electricity. So while we may dream of not needing the grid as we each generate our own electricity, what we really need is a strong well interconnected grid made up of reliable economic nuclear power as its work horse, with wind, solar and other forms of generation contributing when they can; all coupled with new forms of large scale storage to both even out demand and supply. Now this is more likely to be the system of the future.

A nuclear future means clean, reliable and economic electricity; yet fossil fuels reign supreme

This past month, following the fourth anniversary of the Fukushima accident, it is good to see there is less emphasis on the nuclear accident and more discussion of the significant natural disaster – the tsunami and earthquake that killed some 20,000 and destroyed so much, leaving 300,000 homeless. It is now clear that the nuclear accident will not be a cause for radiation-induced cancer, food is not contaminated, and most people can return to their homes should they so desire. While there continues to be a big mess to clean up and many important lessons in managing nuclear accidents to learn, there is no disaster in terms of either immediate or long-term health impacts. Yet we still see news such as was reported this week- that Fukushima radiation has reached the west coast of Canada – one then has to read the report to find out it is so minute as to be a non-event.

So now 4 years on, if we look at China one could conclude the nuclear industry is booming. CGN reported 3 new units were connected to the grid in March, with 2 more expected to be connected within this year. Overall China now has 24 units in operation and another 25 under construction targeting 58 GW in service by 2020 and then accelerating from there to bringing as many as 10 units per year into service in the 2020s targeting about 130 GW by 2030. Two new reactors have just been approved in the first approvals for new units post Fukushima. In addition to this, China is now developing its Hualong One reactor for export as it strives to become a major player in the global nuclear market.

Hongyanhe3

                                          China Hongyanhe 3 completed

China’s commitment to nuclear power is strong and unwavering. An important reason for this rapid expansion is the need for clean air. Pollution in China is a real and everyday problem for its large population. The Chinese see nuclear power as path to ultimately reducing their need to burn coal and hence help the environment.

On the other hand, in Germany a decision to shut down some nuclear units in 2011 immediately following the Fukushima accident and to close the rest by 2022 has led to a large new build construction program of lignite-fired units to meet short term energy needs. With several under construction and some now in operation, coal is producing about half of Germany’s electricity. Keep in mind that these new plants will likely be in service until about 2050. This is while Germany supposedly is focusing its energy future on ensuring a cleaner environment using renewables. I would expect their goal would be easier to reach without a number of new coal-fired units going into operation to replace clean carbon free nuclear energy.

Germany lignite

The lignite coal fired power plant Frimmersdorf

It is with these two extremes in mind that I noted when attending the Nuclear Power Asia conference in Kuala Lumpur this past January that while almost all South East Asian countries are planning to start nuclear power programs, they have had little success in getting them off the ground. Currently Vietnam is in the lead and countries such as Indonesia and Malaysia are continuing with their plans, but with little progress. For example, Indonesia has been talking about nuclear power for more than 30 years. With a need for 35 GW of new capacity in the next five years and an annual expected growth of 10 GW per year after 2022, it is easy to ask why a decision for new nuclear seems perpetually stalled while there has been no problem building new fossil plants.

While in Malaysia I couldn’t help but think – why is it so difficult to make a decision to invest in new nuclear plants, especially for first-time countries? Is it a fear of nuclear itself and the issues associated with public acceptance – or is it the commercial aspects whereby nuclear plants have relatively large capital expenditures up front raising financing and risk issues? Or, more likely, a combination of the two.

At the same time as decisions on new nuclear seem to be so difficult to take, literally hundreds of coal plants and thousands of gas fired plants are being built around the world.   If the environment is actually important, why is it so easy to invest in fossil stations and so hard to invest in nuclear? One simple answer is the size of the global fossil industry. Countries like Indonesia and Malaysia have huge industries with fossil fuel development being an essential part of their economies. The public is comfortable with this industry and many either work in, or profit from the industry in some way. The same is even true in Germany, where coal and lignite mining is entrenched. While committed to reducing hard coal use over time, once again this is an important industry in the short term.

For a country looking at nuclear for the first time, like those in South East Asia, there has to be a strong base of support to get the industry off the ground. They need to be serious about their consideration of the nuclear option, not just dabbling with little real interest. While these countries have modest research and other programs, there is simply not enough going on nor a strong belief that there are no alternatives to garner the political support to move forward. Starting a nuclear program is a large undertaking and the fear of securing public support and concerns about safety and financial ability to support the program are paramount. This makes it difficult for decisions to be taken. A strong and committed view from within government is needed and this can only be achieved with a strong need for energy and an even stronger belief that the public is on side.

China has passed this milestone and now has a large and vibrant domestic industry. Government support is assured so long as the industry continues to thrive. To the Chinese, the issue is clear. Nuclear plants are economic and their environmental benefits are essential to helping solve their huge environmental issues. The Chinese have CONFIDENCE in their ability to deliver safe, economic and reliable nuclear power stations.

On the other hand, the Germans have decided their fear of nuclear is stronger and more urgent than their need to reduce their carbon emissions in the short term even though they had a large and strong domestic nuclear industry. In this case, Germany is an outlier and to this end they justify building new coal units even when their overriding goal is environmental improvement.

I am confident that nuclear plants will expand their already important role in the future electricity mix of the world and, as such, the industry needs to find new and innovative ways to make taking a nuclear decision easier. This includes ways to gain a higher level of public support, ensure that project risks are manageable and that costs can be kept under control. In some future posts, we will talk about some of these ideas and how we can unlock the global nuclear potential.

How can Nuclear Power Build Trust in a time when denying science is rampant?

Recent public outcry as a measles outbreak has managed to impact much of North America has once again showed the nature of public deniers of science. In this case it is concerns about vaccinations that have led to numerous children falling sick with measles. While not considered a highly risky disease, some children get very sick and some may actually die. The main concern is that it is very contagious so that without vaccinations it moves quickly within a community to infect large numbers of people, greatly increasing the public risk.

This is only the most recent large scale public outcry where science is ignored. It is the same as those who deny climate change and those who deny the safety and benefits of nuclear power.

April 15, 2014

The role of nuclear power in combating climate change has once again been demonstrated in the most recent update of the IEA Nuclear Power Roadmap.

  • Based on the 2 degrees Celsius (°C) scenario (2DS) – nuclear power would continue to play a major role in lowering emissions from the power sector, while improving security of energy supply, supporting fuel diversity and providing large-scale electricity at stable production costs.
  • Global installed capacity would need to more than double from current levels of 396 gigawatts (GW) to reach 930 GW in 2050, with nuclear power representing 17% of global electricity production and a formidable growth for the nuclear industry.
  • Governments have a role to play in ensuring a stable, long-term investment framework that allows capital-intensive projects to be developed and provides adequate electricity prices over the long term for all low-carbon technologies. Governments should also continue to support nuclear research and development (R&D), especially in the area of nuclear safety, advanced fuel cycles, waste management and innovative designs.

This means that a larger commitment to nuclear power is an important element of any strategy that has a chance of getting climate change under control.

The report also notes that public acceptance continues to be one of the major impediments to a stronger commitment to nuclear power in many markets. Concerns about safety, costs and waste disposal continue today; the same issues as they were back when I started work in this industry more than 30 years ago. While science can clearly demonstrate that nuclear power has benefited the environment, by avoiding significant amounts of pollutants and carbon emissions; is very safe; and that waste management is more of a social issue than a technical one: public attitudes remain very hard to change.

Generally the public has very different views on key issues than scientists. In this year’s annual meeting of the American Association for the Advancement of Science (AAAS) a significant number of discussions were about how the public thinks about science issues and how scientists communicate about their work. On key issues the difference in opinion according to PEW research is striking. While 57% of the public believe that eating GMO food is unsafe, 88% of scientists believe the opposite. Only 68% of adults believe vaccinations should be mandatory while scientists are at 86%. And finally only 50% of the public believe that climate change is man-made while 87% of scientists believe in man-made climate change. Clearly there is a huge gap between science and public beliefs. We in the nuclear industry are not the only ones to suffer from this lack of effective communication.

I have long noted when told the industry must better educate the public that in reality, the public does not want an industry science lesson which tends to be the approach most used in the past. In fact, when this approach fails, experts just shake their heads and try again. In reality what the public want to know is that the industry is safe, and that this safety is in the hands of experts that they trust to deliver upon this promise. We see that one of the largest impacts of the Fukushima accident in Japan is the loss of trust in both the utility and government by the population. The impact to the public of this is significant – the health impacts of the fear of radiation and the accident is far larger than the actual health impacts of any radiation to the public.

Trust is not something that is built overnight. It takes years, even decades to develop trust with the public – and only a moment to destroy it. People are skeptical (as they should be) and unfortunately are always ready to believe stories that discredit those they don’t trust.

So why do I bring up the measles outbreak? Because we finally have an incident where the public seems outraged at deniers and supportive of science. Measles vaccinations are safe. Millions of doses have been safely given to children over decades. They save lives. And those that disagree have been putting not only their children at risk but also the children of their neighbours and colleagues. One has to ask, how can any educated, concerned adult put his or her own children at risk? Clearly they believe that the risk of vaccination is higher than the risk of the disease. In the midst of all of this, recent news surveys are showing that significant numbers of people still believe the vaccination can put their children at risk. This is just not the case given the science.

It was said best by a mother in Pickering Ontario who has already lost a young child to illness and who now has her baby at risk, “If you have chosen to not vaccinate yourself or your child, I blame you,” she writes. “You have stood on the shoulders of our collective protection for too long. From that high height, we have given you the PRIVILEGE of our protection, for free. And in return, you gave me this week. A week from hell. Wherein I don’t know if my BABY will develop something that has DEATH as a potential outcome.”

It is essential to understand these words. It is easy to oppose something when you are already benefiting from it. Yes, don’t vaccinate your child because you know the risk of disease is low since all others are vaccinated, oppose GMO foods when you have ample safe food to eat while others are starving, and oppose climate change while you have reliable electricity and relatively clean air while others can’t breathe and are the first to suffer the consequences.

There seems to be a large scale shift from public good to individual good in society these days. Trust in government, scientists and other institutions is very low. The public is not willing to accept that these institutions have their back so they quickly rush to beliefs that are not supported by science with the resulting ultimate negative impacts on society. To be fair these beliefs come because many of these institutions that were trusted in the past have let the public down. And in this day of instant news and social media, it is easy to attack, but then interest is lost by the time the truth comes out and only a small subset of those who read the original story of concern remain interested enough to see the truth when it comes out.

Trust – it is essential for the future of nuclear power. The public must trust the industry to deliver on its promise of developing and operating safe, reliable and economic nuclear plants. They must trust the government to provide a strong regulator to oversee the industry and ensure public safety. This industry is dependent upon this trust if it is to flourish.

Building trust in science is a task that goes well beyond the nuclear industry. Yes, scientists have much work to do to build that trust with the public and government, but governments must then ensure that they use science as a basis for policy. While it remains reasonable to question the results of science, it is not reasonable to base policy on the assumption that science is wrong. Government in all countries need science advisers in key positions to ensure that real science is heard when policy is being made.

The media is also part of the solution. Poor reporting looking for the sensationalist point of view is not helpful. Science journalists must be the ones to cover science issues and they must take the time to report on them correctly. Just this week there was a fascinating editorial in the Canadian newspaper, the Globe and Mail when a reader complained about the lack of “balance” on the vaccination issue. The response by the Globe is important reading,” The reader is correct that news stories should be fair and balanced, but if The Globe were to include someone “credible” from the anti-vaxxer community, that would be false balance….False balance is when journalists twist themselves into a knot to try to balance scientific and expert views with someone whose views are not fact-based, expert or scientific….. False balance is not only poor journalism, it can harm the readers’ understanding because it suggests there is a balance between the views. In politics, for example, it is important and responsible to offer fair weight to different parties’ views. It is not responsible to offer equal weight to science versus flimsy beliefs.”

The issue is that most people today listen to those they are familiar with and trust and discount those they don’t know. Therefore nothing is more important than the scientific community listening to and speaking with the public in a way that earns their trust. Getting this done is essential to all of our futures. The work ahead of us all to build trust in science is huge and it will take a long time but we must be relentless in our efforts to make this happen.

Given the public push back in this measles outbreak, we can ask – is this the beginning of a new opportunity for dialogue on issues that are supported by science? Is the public starting to understand that their beliefs may be hurting them more than helping? If so, then we need to ensure that the nuclear industry is continuing to deliver open, honest and transparent information in support of its benefits while clearly explaining the magnitude of the risks. Science is on our side. Now it’s time to make a strong case to the public.

As 2014 comes to a close, nuclear power is at a crossroads – again!

The world needs nuclear power – so says the latest edition of the World Energy Outlook (WEO) issued in November. “Nuclear power is one of the few options available at scale to reduce carbon-dioxide emissions while providing or displacing other forms of baseload generation. It has avoided the release of an estimated 56 gigatonnes of C02 since 1971, or almost two years of total global emissions at current rates.”

Yet looking back at 2014, the industry has had its ups and downs. There were setbacks as France formalized its intention to reduce its reliance on nuclear going forward, Sweden pulled back after its most recent election, and in Finland the Olkiluoto 3 project was delayed once again. In the US, the most recent plant to be shutdown is the Vermont Yankee plant; shutdown after 42 years of operation as not being economic, yet its shutdown will definitely raise electricity costs for its consumers and impact the local economy as a result of its closure-related job losses.

Yankee Atomic 2014

Vermont Yankee shuts down

There was good news in Japan as the first units were approved for restart since the 2011 Fukushima accident, although the actual restarts are taking longer than expected. The re-election of the Abe government also bodes well for Japan’s nuclear future. In the UK, there was a big win as Europe approved the project at Hinkley Point as not contravening state-aid rules; but once again progress is slower than most would like.

And then there are places where nuclear power is booming. China brought new units into operations and approved numerous new units with a larger-than-life target for its nuclear share in 2020 and beyond. The Chinese also approved its first Hualong One reactor, the evolution and combining of designs from both CGNPC and CNNC, as they plan for future exports. Korea approved new units and its first new site in decades. Russia continues to grow both domestically and continues to be very aggressive in the export market.

Given the importance of nuclear power, it is the first time since 2006 the WEO includes a special chapter on nuclear – in fact this time 3 full chapters performing a detailed in-depth analysis of the nuclear option. It clearly demonstrates the benefits of nuclear power in addition to being one of the only generation options at scale available to reduce carbon emissions; it also plays an important role as a reliable source of baseload electricity that enhances energy security. Clearly the benefits and the need for more nuclear is becoming clearer than ever. So why is there this continuing imbalance as we look around the world at various counties’ policies for nuclear power?

The WEO notes two significant issues holding back a large-scale nuclear renaissance. These are public concern and economics. Both are valid and need to be better addressed by the industry. We have written much over the past year or so on the importance of improving public attitudes and, in fact, in many countries we now see improvement. But we also acknowledge there is a long way to go to reduce public fear about nuclear power. For example, even though the main objective of Germany’s Energiewende is to reduce carbon emissions; their even stronger emotional response against nuclear is causing a short term increase in carbon emissions .i.e. their fear of nuclear is stronger than their desire for a cleaner environment.

On the cost side, concerns about high capital costs and completing projects to cost and schedule are valid. The industry has more work to do on this issue as evidenced by some recent projects. At the same time we see that countries such as Korea and China, who are building series of plants in sequence and are achieving the benefits of replication and standardization resulting in lower costs and improved certainty, are completing projects to cost and schedule. Yes, it can be done. But even these countries are not immune to public concerns.

The real problem is that these concerns tend to overwhelm the discussion even amongst energy professionals. For example the summary in Chapter 12 of the WEO, “The Implications of Nuclear Power”, starts “Provided waste disposal and safety issues can be satisfactorily addressed, nuclear power’s limited exposure to disruptions in international fuel markets and its role as a reliable source of baseload electricity can enhance energy security….. “. Renewables are always addressed with hope and little concern for their very real issues while discussions about nuclear are most often focused on its challenges.

Yet even at Google, engineers have come to a conclusion that the challenges to achieving climate goals with renewables are very large. Two Google engineers assigned by the company to show how renewable energy can tackle climate change each came to a blunt conclusion: It can’t be done. As stated, “Trying to combat climate change exclusively with today’s renewable energy technologies simply won’t work; we need a fundamentally different approach.”

The following figure sums it up very clearly. In the case that doom and gloom overwhelms good policy and decision making, we may end up with the Low Nuclear Scenario. But this scenario has real implications – “taken at the global level, a substantial shift away from nuclear power, as depicted in the Low Nuclear Case, has adverse implications for energy security, and economic and climate trends, with more severe consequences for import-dependent countries that had been planning to rely relatively heavily on nuclear power.” Of more importance, at the other end of the spectrum is the 450 Scenario which the IEA believes we need to achieve to truly have an impact on climate change. And in this case, even more nuclear power than the so called “High Nuclear Case” Is needed.

WEOFigure11 12

So there it is, the best way to economically and efficiently address climate change is with a substantial contribution by nuclear power. This year’s WEO lays out the challenge very clearly – once gain nuclear power is at a crossroads. The options range from a slow decline to a more than doubling of nuclear power in the next 25 years. Nuclear power must be an important part of any future low carbon energy system but there are beliefs that are very well entrenched in the minds of both the public and even many global energy professionals that must be addressed once and for all. It is our responsibility to take on these challenges for a brighter future. It’s time to go big and work together to build a strong base of global support for nuclear power. Beliefs are hard to change, but change them we must if we are to have a sustainable, abundant and economic energy future for us all.

And as 2014 comes to a close, I want to thank all of you for continuing to read our blog and contribute to the discussion. Wishing you all a very happy, healthy and prosperous 2015!

The challenge of financing nuclear plants – financing energy requires huge investment

 

Quite often we hear about the problem of attracting financing to support new build nuclear projects. In fact financing will be a topic of major interest at a number of upcoming nuclear conferences. While it is easy to agree that financing nuclear projects is a big challenge, in my view difficulty securing financing is not the issue – rather it is a symptom of a number of other very important issues that are the root cause. Necessary conditions to secure financing for any project is first and foremost, an economically viable project. Next comes the project structure – or to state it more simply – ensuring the risks are managed in a way that can satisfy investors that they will receive an adequate return for their investment. These concepts will be discussed further in a future post.

For today, I will look at the $40 trillion energy industry and consider nuclear’s share of the overall expenditure needed for energy over the next 20 years. I would like to put some context on the issues related to financing nuclear plants by looking at a recent IEA report called the “World Energy Investment Outlook” or WEIO. I found this report of interest because it provides useful data on global funding required to support energy. Or as stated in the Forward to the report “…. data on today’s investment flows have not been readily available and projections and costs for tomorrow’s investment needs are often absent from the debate about the future of the energy sector.”

We often talk about the large size of nuclear projects and how they require huge amounts of funds. Nuclear projects are very capital intensive and have relatively long project schedules; both important issues when trying to secure financing. When we talk about large, a good first step is to try and understand how much funding is required for nuclear projects relative to the rest of the energy industry. And for this we turn to the WEIO.

With annual spending in 2013 of $1.6 trillion rising to about $2.0 trillion by 2035, meeting global demand for energy requires an enormous amount of money. This excludes another $500 billion or so per year to be spent on energy efficiency to try and moderate this growing demand.

Of even more interest, the report specifies that less than half of the $40 trillion dollars required to meet energy demand between today and 2035 goes to meet demand growth; the larger share is required to offset declining production from existing oil and gas fields and to replace power plants and other assets that reach the end of their productive life.

WEIOinvestment for replacement

A staggering statistic – more than $20 trillion is required over the next 20 years just to stand still. And of course, most of this investment is in fossil fuels that continue to emit carbon as the world tries to find a way to turn the corner and find alternatives.

WEIOtotalinvestment by sector

If we drill down and focus on the electricity sector, we can see that of the above $40 trillion about $16.4 trillion is investment in the electricity sector. The largest component of this investment (about 40%) is in transmission and distribution. In the developed world this essential infrastructure is ageing and requires significant investment to meet growing needs. In the developing world, there is a huge need to build up the infrastructure for a population hungry to enjoy the benefits of using electricity.

WEIOglobal Power sector

Looking further we can see two important facts.   First, nuclear power only needs about 6% of the funds for the electricity sector; this is assuming the very modest growth for nuclear in the WEO New Policy Scenario. The other is that renewables are demanding a very large share of the available funds as more and more markets turn to these forms of energy to meet their growing energy needs while trying to curb carbon emissions.

What can we learn from this high level look at the funding requirements for the energy industry? On the one hand, nuclear projects require only a very small portion of the total funds being invested today and for the next 20 years in energy. The main uses of funds are to replace existing depleted fossil fuel reserves – usually at a cost higher than the resources they replace; to invest in critical T&D infrastructure, in part due to the need to expand transmission to be able to accommodate renewable energy generation; and the investment in renewable energy generation itself, virtually all of this last investment subsidized by governments to encourage growth.

On the one hand, there is tremendous competition for funds in the energy industry meaning nuclear projects need to be an attractive financial proposition to get its share of these funds. And on the other hand, much of the competing technologies are being supported by governments with subsidies based on policy decisions.

So what is it that makes nuclear plants so difficult to finance? As I said at the start of this post, there are a number of issues that need to be discussed. These include project economics, energy market structures, poor project construction performance in a number of markets; and of course, public perception that skews the risk profile of nuclear projects in a way not seen in other industries. But a discussion of these factors will have to wait until another time…….

Note:  all figures above are from the IEA World Energy Investment Outlook.

As a solution for climate change – nuclear power is falling behind

Recently, the 2014 edition of the International Energy Agency’s (IEA) Energy Technology Perspectives (ETP) was issued. The ETP is issued on a two year cycle; the current edition takes the World Energy Outlook 2013 forecasts and looks to the longer term out to 2050. With climate change now becoming even more pressing I thought it would be interesting to see the progress over the last two years (I wrote about the 2012 edition back in June of that year). According to the report, as an important contributor to meeting climate requirements going forward, nuclear power is falling behind.

On the positive side, the IEA sees the opportunity by which “policy and technology together become driving forces – rather than reactionary tools – in transforming the energy sector over the next 40 years.” The report looks to balance energy security, costs and energy-related environmental impacts. But in the end it concludes that “Radical action is needed to actively transform energy supply and end use. ”

Why is radical action required? Of all the technologies required to meet the 2D target (this scenario sets a target of only 2 degrees C change as compared to 6 degrees in the status quo scenario), the IEA suggests that only renewables are on track while pretty much every other clean technology is not moving fast enough. Two important technologies not meeting targets are Carbon Capture and Storage (CCS) and Nuclear Power. To no one’s surprise, CCS has yet to be proven and become a viable commercial option to de-carbonize fossil fuel emissions. As for nuclear power; after the Fukushima accident, growth has been slower than previously predicted and is expected to be 5 to 25% below the level required by the 2D scenario in 2025.

This leaves much of the burden on renewables to meet the need for lower carbon emissions. Surprisingly, in the hi-renewables scenario, solar becomes the dominant source of electricity reaching 40% penetration by 2050. Realistic or pipe dream? I don’t know. One thing is certain, (see chart below), with almost half of future electricity generation coming from variable renewables, compared to almost nothing today, the IEA is demonstrating the need for a huge technology transformation in how the world generates electricity.

IEAETP2014ElectricityGenerationbyTechnology

The following chart is the most telling of all. Over the past 40 years carbon intensity (the amount of carbon emitted per unit of energy supplied) has barely budged. Almost no change at all. Yet now we require the carbon intensity to be cut in half in the next 35 years (meaning less than half as much carbon produced per unit of energy supplied). This requires a complete change in how energy is delivered.

IEAETP2014CarbonIntensity

The reason is simple. Fossil fuels still represent 80% of global electricity generation and most of the energy used for transport. To disrupt the curve requires going off fossil fuels to cleaner alternatives. To achieve the 2D scenario, electrification is paramount given the option of generating electricity with clean alternatives. Fossil fuel use must then be cut in half to about 40% of electricity generation and much of the remainder makes use of CCS to reduce its carbon footprint. The report notes that gas must only be a bridging technology to support renewables in the short to medium term as gas still represents a major carbon source. So what’s left? Solar and wind to replace fossil fuels and CCS to make them cleaner.

Of course nuclear power is an obvious candidate to make a larger contribution. It is a mature technology and already is an important source of low carbon energy. Given its energy intensity it is certainly feasible to implement more nuclear power on a very large scale. And even with recent set-backs, there are now clear signs of renewal as the industry puts the Fukushima accident behind it.

For example, China continues to expand nuclear power at an ever increasing pace. Japan has reconfirmed its commitment to nuclear although restarts are slower than anticipated and the ultimate level of nuclear in post-Fukushima Japan remains unknown. Russia is increasing its commitment to nuclear and, of most interest, is becoming a major exporter offering innovative risk and financing structures that have not been seen in the market to date. Other markets are also starting to move; the latest being Hungary which has just approved a new plant for the PAKS site. However some other important nuclear markets are having challenges. Korea has cut back its long term plans and France is looking to limit the contribution of nuclear power in the future.

While nuclear power has challenges with public acceptance, this report notes the commercial issues – economics and implementation risk. As can be seen in the following chart, the IEA estimates nuclear to be the most expensive option after off-shore wind. I have not had time to delve into the details and review the numbers. However, taking this at face value, we know that some projects in the west are not doing as well as they should be. On the other hand, standardized series-build in countries like China and Russia are demonstrating a strong path to lower project costs and risks.

IEAETP2014economics

There is no hi-nuclear scenario in this edition of the report. That is quite unfortunate as a strong renewed commitment to nuclear power is a very good way to help move this plan to achieve a 2D future become a reality. By stating that nuclear power is not meeting expectations, the report lays out a clear challenge. Now it’s time to show the nuclear industry is up to it. If we really want to bend the carbon intensity curve, then more than ever, the world needs more nuclear power as an important part of a low carbon future.

Changing the discussion – It’s all about people

It’s always amazing when a United Nations report that has global ramifications comes out with little fanfare.”  So starts an article in Forbes talking about the most recent UNSCEAR report on the consequences of the Fukushima accident in Japan.  Three years after the accident, UNSCEAR, the United Nations body mandated to assess and report levels and effects of exposure to ionizing radiation has reported and its result could not be more clear.  “The doses to the general public, both those incurred during the first year and estimated for their lifetimes, are generally low or very low.  No discernible increased incidence of radiation-related health effects are expected among exposed members of the public or their descendants.”

This result is in stark contrast to a number of more recent accidents in other industries, all with a large number of fatalities.  Whether it is a plane lost in Malaysia, a ferry sinking in Korea, an oil explosion in Quebec; the list goes on.  Unfortunately there is no shortage of examples of terrible accidents resulting in loss of life.  And yet, in comparison to these many tragic events, it continues to be nuclear accidents that many people fear the most.

But the reality is quite different. When it comes to nuclear power, we have now seen that even in the worst of the worst nuclear accidents (Chernobyl and Fukushima), we can protect people and minimize fatalities from radiation.   In other words, the decades old belief that nuclear accidents are very low probability but exceptionally high consequence; effectively resulting in the end of the world as we know it (i.e the doomsday scenario), is just not the case.

For those that have been reading my blog for a while, it was about a year ago that I wrote about the need for a new paradigm to communicating the risks and benefits of nuclear power for the future with an emphasis on refining the message to reflect current reality.  The message on safety should be:

  • The risk of a nuclear accident is very low and is always getting even lower
  • In the event of an accident the risk of releasing radiation to the environment is also very low; and
  • Even in the unlikely event that radiation is released, the public’s health and safety can be protected.

Of course, this does not mean we should become complacent.    Certainly the industry is doing the right things to make sure a similar accident cannot happen again.  Many improvements have been made in plants around the world to both reduce the risk of an accident and in the event of a severe accident, reduce the risk of radioactive releases.

For example, here in Canada, we have broadened our safety objective to “Practically eliminate the potential for societal disruption due to a nuclear incident by maintaining multiple and flexible barriers to severe event progression”.  Setting societal disruption as the measure is definitely something new as move forward post Fukushima.

As an industry, we are excellent at learning from every event and making improvements to reduce the risk of a similar event in the future.  The global nuclear industry should be proud of its unwavering commitment to safety.

But that being said, while making technical improvements and reducing the risk of future accidents is essential; unfortunately this will be unlikely to result in the public feeling safer.  I would argue that in general, the public already believe the risk of an accident is low – the problem is they also believe the consequence of an accident is unacceptably high.  So no matter how low we make the probability, they will remain afraid of the consequences.  In other words, as we continue to talk about improving technology to reduce risk; we need to enhance the discussion to talk about people and how to both keep them safe (the easy part); and of even more importance, feel safe (now here is the challenge).

Therefore an important lesson from Fukishima, is that accidents, however unlikely are indeed possible.  And it is because of the perceived consequence of an accident that the public continues to be afraid.  In fact, fear is an understatement.  We know that nuclear accidents cause not only fear but outright panic.  And this panic is not limited to people in the immediate area of the plant but is experienced by people all over the world.  Not a week goes by when there is not some news item on how radiation from Fukushima is about to land on the North American west coast.  While there is little risk of any radiation issue, to the public, it continues to stoke fear.

So now that we know that there is little to no health impact from radiation after Fukushima, does that mean the discussion is over?  No, the next step is to address the real health consequence of a nuclear accident – mental and social well-being.  Fear of radiation is a complex issue.  While people will happily accept significant doses of medical radiation as they believe (quite rightly so) this will improve their health, they remain terrified of radiation from sources such as nuclear power plants.

In their report UNSCEAR noted, “The most important health effect is on mental and social well-being, related to the enormous impact of the earthquake, tsunami and nuclear accident, and the fear and stigma related to the perceived risk of exposure to ionizing radiation. Effects such as depression and post-traumatic stress symptoms have already been reported. “

They continue, “The evacuations greatly reduced (by up to a factor of 10) the levels of exposure that would otherwise have been received by those living in those areas. However, the evacuations themselves also had repercussions for the people involved, including a number of evacuation-related deaths and the subsequent impact on mental and social well-being (for example, because evacuees were separated from their homes and familiar surroundings, and many lost their livelihoods).“

Whatwillhappen to me

And this is where we need to do more.  Once we accept that even after implementing our best efforts, there may well be another accident someday, there needs to be increased focus on accident management and recovery.  This means clear guidelines on when to evacuate, what is required to remediate a contaminated area and when it is safe to go home again.  A huge source of fear is the unknown and after a nuclear accident, people impacted are very worried about their futures.  They want to know – will I get sick, how about my children and grandchildren – can I go home again – and if so when?  And basically how and when will I be able to resume my normal life?

UNSCEAR noted that “estimation of the occurrence and severity of such health effects are outside the Committee’s remit”.  Given these are important and significant health impacts; it is time for the industry to take action.  As an industry we have long been leaders in industrial safety.  Now we have the opportunity to be leaders in post-accident recovery psychological research.  We need new research to better understand the impact to people in affected areas following nuclear accidents so we can better plan how to reduce their fear and indeed, have a happy and healthy future. This will lead to better decisions following events based on science rather than short term fear issues. It is important to understand that protecting people means much more than emergency planning to get them out of harm’s way when an accident happens.  It also means meeting their needs right up until they can resume their normal lives.

The most important lesson from Fukushima is not technical.  Of course we will learn how to avoid similar accidents in the future and make plants safer.  But if we really want to change the dialogue and increase public support for the industry, we must also recognize the future is all about people – building confidence and reducing fear.

It’s passion that will lead to brighter nuclear future

Last month I talked about innovation in the nuclear industry focusing on the perception that nuclear is not innovative.  Since then I attended the Canadian Nuclear Association annual conference.  Its theme this year was “Developing the next generation” which in this case focused on developing the workforce of the future.

While the discussion at the event was about Canada, the theme can be applied to many countries.  Essentially, it was noted that the industry has numerous opportunities that offer well paid interesting work for the long term.  And, of more importance it was made clear that the industry is only as good as its people; hence the need to attract the best and brightest.

With all the good discussion, what caught my interest was the guest breakfast speaker, Taylor Wilson, known has the boy who played with fusion.  At 19 years old, he gave a great talk (already having given two TED talks) about his passion for all things nuclear.  I am not going to discuss Taylor’s achievements or strong technical skills, both of which are certainly impressive; and he is also extremely articulate proving that scientists can indeed communicate well.  But what really got me excited was his passion for nuclear science.  This passion ignited the audience by reminding us all of our own passion for the industry.

I remember being a young student studying nuclear engineering at RPI in Troy New York during the 1970s.  What drove me to go into nuclear was the mystery and excitement of this still relatively young industry.  I wasn’t looking for a job; I was looking for a future.  The oil shocks had happened and it was clear that the world needed alternate energy.  Being able to provide almost limitless energy to power the world, nuclear power seemed to be the solution and I wanted to be part of it.

I was not unique.  Many of my colleagues; many of whom (older than me) were the pioneers of nuclear energy, were inspirational in their dedication and passion for nuclear power.  I am not talking about the early great scientists who harnessed the atom, but rather the next wave of people, both technical and political who drove the industry forward securing commitments to, and then building the 400 plus Generation II reactors in service today.  This past December was the sixtieth anniversary of President Eisenhower’s Atoms for Peace speech to the United Nations.  This speech launched a new industry around the world.  I would name some of those who contributed but they are too many and I don’t want to leave anyone out.  Rather, I invite you in your comments to note who inspired you either to enter the industry or along your career to keep on moving forward.  (Some of the pioneers of the Canadian industry are listed here.)

And they succeeded.  They developed one of the most important energy technologies known to man.  In less than fifty years, an idea was turned into a commercially viable energy technology meeting about 12% of global electricity.  And that number, of course, is deceptive since about half of the countries that rely on nuclear energy use it for 20% or more of their electricity supply.

Of course there have also been numerous challenges along the way that saw the industry slowdown in the latter part of the twentieth century.  Recent developments as the world looks for solutions to climate change has re-ignited interest in nuclear power as a part of the solution.  This is also in the context of the 2011 accident in Japan which once again raised fears of the industry and its potential negative impacts.

For most of us who have spent our careers in the nuclear industry, we remain just as passionate today as we were when we were young and our belief in the benefits that nuclear energy bring to society continues to be strong.  There are others who have been worn down by the relentless effort required to sell these benefits and the years of attacks against the industry.  The result is a defensiveness along with a weariness that has reduced efforts to move forward as many in the industry focus on survival.  It is now time for a new generation of passionate young people like Taylor Wilson to take this industry into the future. I know they exist.  There is the nuclear Young Generation Network (YGN) with chapters around the world.  For those of you YGN members who read this, please  give your views.

It is not just about opportunities for employment, but rather about opportunity to make a difference.  The question becomes, not how do we find the nuclear workers of the future – but how do we inspire the passion in a nuclear future that we all had (and continue to have) when we started our careers to attract the best and brightest to our industry going forward?  I would guess that if you went to any university graduating class and asked for the 10 most innovative and exciting industries of the future, we would likely not make the list.

I talk about communications in this blog quite often.  But most of the time I talk about how we can promote the industry and reduce the fear of radiation in the public.  But we must also consider how to communicate to a new generation of potential nuclear industry professionals the excitement, innovation and societal imperative so that they can develop their own passion.

I love working in this industry and I wouldn’t change my experiences for anything.  Now it’s time to help build the industry of the future – and that means inspiring young people to take a leap of faith and jump on board.

The importance of innovation to the nuclear industry

A comment caught my attention at a recent nuclear industry event.  The comment was that a hi-profile agency with a mandate to do research in advanced technology across industries had no interest in attending any events to learn more about nuclear power – primarily because “nuclear is not innovative”.  In reality, there are numerous examples of how the nuclear industry has and continues to improve through innovation. 

In exploring this comment, what we found was a belief (likely more prevalent than we would like) that renewables like wind and solar as well as various storage technologies are moving forward, innovating to become the energy source of the future, while old technologies like nuclear are past their prime heading into old age.

The discussion then moved to future reactor designs as proof of innovation in the nuclear industry.  Look at fast reactors, thorium reactors or even SMRs.  Although these are all interesting, it was pointed out that these represent “novelty”, not innovation.  And to argue that a novel design is what is required to save the industry (although they will come) gives the message that today’s designs are just not good enough – and that is absolutely not true.

The public looks at nuclear power and sees a staid industry, some think in decline, that is building technology that has been around for 50 years.  Granted some nuclear projects continue to be built above budget and over schedule, while other “newer” technologies continue to improve and reduce cost and schedule – as would be expected when developing technologies of the future.

However, there are numerous examples of innovations across the nuclear industry.  For example, China has made improvements to the Daya Bay CPR1000 design at Lingao.  They increased the output by about 100 MW through an improved turbine, and made great advancements to the control systems by adding distributed control.  At Nuclear Power Asia in Vietnam this past month, a presentation by Mitsubishi showed how they improved their construction schedule from 77 months to 50.5 months from the Ohi 1 project to Ohi 3.   Westinghouse is learning lessons from its experience in China and is applying them to their AP1000 projects in the US using advanced modular construction technology. And here at home in Canada where Bruce Power, whose tag line is “Innovation at work”, has found ways to increase the life of its reactors well beyond what was thought possible only a few years ago.

The analogy can be made to cars.  The cars we drive today are very similar to those we drove 30, 40 and even 50 years ago.  Four wheels, combustion engine, rubber tires.  But are they really?  In fact almost nothing is the same.  Our cars today are full of electronics controlling the engine; the bodies no longer rust away in a few short years, safety has been greatly improved through air bags and other enhancements; and tires rarely go flat so that many models no longer carry spares.  In fact technology has advanced in leaps and bounds in the cars we drive every day.  And even though we are now looking at next generation technology such as electric and hydrogen powered cars, these are still novelties.  These types of advancements are not required to innovate our vehicles.  In fact the opposite is true.  It is the innovation in the everyday systems in our cars that continue to make them better.  And the magnitude of these improvements is staggering.

Somehow this message is not getting through with our nuclear plants.  It may be because we operate in a very rigorous regulatory environment that forces nuclear utilities to be extremely conservative as change creates risk.  Add to that the magnitude of the capital investment in a nuclear plant and the conservatism increases further as the risk of an advancement is always taken into consideration when looking to the future.

That being said, the operators of today’s fleet of nuclear plants have made incredible improvements to the operating fleet.  This is why capacity factors (percent of maximum possible production) today can be 90% +.  Back in the 1980s, a capacity factor in the mid 80% range was considered excellent.  But no more.  Today we expect better performance from our plants and we get it-through everyday innovation!

US-Nuclear-Capacity-Factor0011

Source: www.nei.org

When it comes to operations, the improvements are easy to show through improved performance of the operating fleet.  The issue we have had in the west is an insufficient number of new build projects to show the innovation that is happening every day in this industry when it comes to new projects.  New build in western countries have had a rocky start after decades of not building.  But as we move forward, this too will improve.

For new projects, we need to not only be building to budget and schedule, but also showing that costs and schedules are reducing with time.  The Koreans, Chinese and Japanese have clearly demonstrated the benefits of standardized fleets to reduce costs and schedules as they build more and more plants.  We see them innovating as they learn from each project and move on to the next one.  We are already seeing improvement in the US as the Summer plant is taking advantage of lessons learned from the Vogtle plant; and both are benefiting from the experience in China.

We must be able to demonstrate that today’s nuclear technology is a technology of the future and that advancements are indeed coming that make every project better than the last.  If an agency looking to the future of energy thinks there is no innovation in nuclear, then we need to be more vocal about our achievements.  We need to celebrate our innovation.  And we need to continue to invest in further innovation because there is always room to get better.

Our strength is through our performance.  And our performance continues to get better through innovation, each and every day.  For those of you who have good examples of where innovation has benefited the industry, please post them as a comment.