Nuclear Power Under Stress

From the Financial Times:

Although it is still too soon to know how the crisis at Fukushima will end, already the harrowing scenes from the site are provoking a widespread re-examination of nuclear safety that will, at the very least, lead to significant delays in new investments, an inevitable rise in cost and probably more rapid closures of existing plants. China, the world’s biggest builder of nuclear reactors, on Wednesday froze applications for new plants pending a review of safety.

Unless the stricken reactors are brought quickly under control, the industry could enter another two-decade global freeze like the one that followed the Chernobyl disaster in 1986. The consequences would include faster long-term growth in demand for fossil fuels, particularly natural gas, leading to tighter supplies and higher prices. It would also mean a further rise in the emissions of greenhouse gases created by burning those fuels – and further undermine climate policies around the world.

The nuclear business had engineered a remarkable turnaround. Seen only 10 years ago as a sunset industry, about to be supplanted by clean-burning gas and renewable sources such as solar, it has enjoyed a wide revival in support from energy companies, politicians and even the public. With climate policies demanding reliable low-carbon electricity, many governments in developed nations came to accept the need for nuclear as part of their future energy mix. That may now have changed. . . . 

The much-discussed “nuclear renaissance” was always more of a promise than a reality in Europe and the US. Nuclear power is a deeply political business, because the scale of the risks it entails inevitably involves governments. The support offered by most western countries has often not been strong enough to secure as much private sector investment as they had hoped. Now, governments are pulling away from whatever backing for nuclear power they had offered.

Switzerland was first to respond, suspending approvals for three new reactors on Monday. Germany followed 24 hours later, with chancellor Angela Merkel temporarily making idle seven of the country’s 17 nuclear power stations amid a three-month review of the nation’s nuclear energy policy. The Japan disaster was “a turning point in the history of technology-based society”, she said.

In the UK, where plans are well advanced to build up to 11 new reactors over the next 15 years, the government has asked its chief nuclear inspector to prepare a report on the implications of the events in Japan. Chris Huhne, the energy secretary, who has an anti-nuclear past, said on Tuesday it was too early to tell whether there would be any impact on the investment climate. But investors would “make their assessment on the basis of costs and likely returns” – and those would be affected by the inspector’s report.

In the US, support for new nuclear plants was a rare point of agreement between President Barack Obama and his Republican opponents. Steven Chu, the Nobel prize-winning energy secretary who is a long-standing supporter of nuclear power, tried to reassure members of Congress on Tuesday, telling them that “the American people should have full confidence that the United States has rigorous safety regulations in place to ensure that our nuclear power is generated safely and responsibly”. But Joe Lieberman, a high-profile independent senator and nuclear proponent, called for the US to “quickly put the brakes on [new reactors] until we can absorb what has happened in Japan”.

For all those countries, public opinion could be an immovable obstacle in the path of pro-nuclear governments. It is in the large emerging economies, particularly China and India, that enthusiasm for new nuclear plants has been strongest.

India, however, faces the same constraints as other democracies. Foreign companies were already wary of the Indian market because of a law passed last year making equipment suppliers liable for potentially unlimited costs in the event of a disaster. Local resistance to plants and fears about earthquakes and terror attacks are raising the political pressure.

China, which is building 27 of the 62 reactors now under construction worldwide, had identified nuclear energy as a main component of its plans to shift energy consumption away from fossil fuels over the next five years. Until midweek, Beijing seemed able to ignore public nervousness, with the government and state-owned nuclear companies issuing a series of statements to reassure the public about safety. But then the State Council, or cabinet, announced a temporary freeze on all new approvals. It called for the use of “the most advanced standards” to proceed with a safety assessment of all nuclear plants under construction.

“Any hazards must be thoroughly dealt with, and those that do not conform to safety standards must immediately cease construction,” it said.

Last year, the International Energy Agency, a watchdog backed by rich countries, predicted that nuclear power would grow only modestly in importance, going from 6 per cent of total world energy use to 8 per cent by 2035. Even that rate of growth now looks difficult to attain, the IEA acknowledged on Tuesday.

To fill the gap, renewables are likely to receive a boost. But there will also be a need for a reliable power generation that works even when the sun does not shine and the wind does not blow. Gas-fired power plants are quick and cheap to build, and natural gas is plentiful in the US. It could also be abundant in Europe and China if American production techniques can be imported. Peter Voser, chief executive of Royal Dutch Shell, Europe’s largest oil and gas company, said this week he expected that even in 2050 the two main commodities his group produces will provide two-thirds of the world’s energy. That represents a rise from the current 55 per cent.

Curbing the world’s dependence on fossil fuels has always been difficult. The agonies of Fukushima will make it even harder.