Germany and the Nuclear Self-Trap Conundrum

Nuclear energy isn’t a trap for the unwary. When a country decides to invest in nuclear energy, it does so knowing the risks and benefits. If it invests heavily in nuclear energy – think France, Germany, Russia, China, The U.S. - it has done a good deal of study over many years to determine the value of the decision.

Public support for nuclear energy certainly took a significant hit after the accident at  Japans’ Fukushima Daiichi plant, but even that has begun to moderate.

Public support for nuclear power appears to have bounced back in the UK after falling sharply in the aftermath of the Fukushima disaster, a survey showed today.

The Ipsos MORI poll of almost 1,000 adults across Britain revealed half of those questioned (50%) supported the building of new nuclear plants in the UK to replace the current generation of reactors which are being shut down.

That’s what makes Germany’s decision to close its nuclear energy facilities so fascinating. Of course, you’d expect nuclear energy advocates to consider it a bad move – we’ve had considerable fun with it on this blog – but with most other countries moving forward, after a pause, with their plans (From the above story: “The UK Government plans to build a series of new reactors on or next to existing nuclear sites to replace plants being phased out over the next few years, as part of plans to ensure secure electricity supplies and to help cut carbon emissions.”), what has become clearer is that Germany’s decision was quite precipitous, even radically so.

What made it also seem cynical was that it was overseen by Chancellor Angela Merkel, who had previously recognized that exiting nuclear energy without a viable replacement plan in place was bad policy. In response to the accident at Japan’s Fukushima Daiichi plant but as likely motivated by a tough election, she pivoted by doubling down on a policy she considered bad.

But in doing so, did she make a trap of nuclear energy?

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Before the decision to close the plants, Germany was already in a pickle due to its decision to move heavily into renewable energy so it could exit nuclear energy by 2025, as this Economist article from late 2010 describes:

Renewables in Germany are growing more quickly than in almost any other EU state, but that is only because consumers pay a large subsidy, some €10 billion ($12.8 billion) last year. Energy taxes, already high, may be about to rise. In August energy companies and their supporters took out full-page newspaper advertisements arguing against tax rises and for a dismantling of bureaucratic barriers to investment. To secure cheap, climate-friendly power, the signers argued, nuclear and coal would have to remain part of the mix. 

[…]

Yet to withdraw on schedule from nuclear power, which produces more than a fifth of Germany’s electricity, would be risky. The CDU [Christian Democratic Party, Merkel’s party] is divided, but leans towards extending the deadline. Many in the party see the decision as a test for a chancellor who prefers messy compromises to clear leadership. “It would be fatal to give up” a source of energy that is cheap, domestic and emits little carbon, says Joachim Pfeiffer, a CDU member of the Bundestag.

Between late 2010 time and the Japan accident, the government decided to extend the life of the plants to provide more time to put renewables in place. So nuclear energy need not be a trap, even when you want to do something else. (The Greens in this article make a really funny argument, though – because nuclear energy runs full tilt all the time, it’s tough to ramp it down to accommodate the intermittent nature of solar and wind energy. It’s really flips relative strength and weakness on their heads.)

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The response to Germany’s post-Fukushima decision has been – what you’d expect:

Utilities are less keen. They say high natural gas costs, still mostly tied to oil with its inbuilt geopolitical price premiums, and low power prices make gas plants an unprofitable business.

"The goals is very ambitious -- this will not be easy," said Juergen Grossmann, chief executive of Germany's No.2 utility RWE.

So there’s that.

One of the top priorities is the expansion of transport and distribution networks for power from renewables sources including wind and solar, Germany's new favored form of energy.

The task is being delayed by protests and overly long procedures to approve new grids and existing grid revamps, which in some cases take more than 10 years.

And that.

Siemens estimates that Germany's energy shift will cost up to 1.7 trillion euros ($2.17 trillion) by 2030, most of which will be borne by taxpayers and power consumers.

And – hey, ouch!

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Some of this might have been inevitable – nuclear plants have exceptionally low running costs – but other aspects are a function of flipping the off switch too quickly. All other factors being equal, Germany would be foolish not to consider all options.

The German government's 180-degree turn in nuclear policy has helped breathe new life into Europe's energy industry -- though not always to Germany's benefit. The country has gone from being an energy exporter to an energy importer practically overnight, which brings along with it a number of negative consequences for its economy, consumers and security.

And that can cause a grim, tight smile. Why?

Germany's decision to phase out its nuclear power plants by 2022 has rapidly transformed it from power exporter to importer. Despite Berlin's pledge to move away from nuclear, the country is now merely buying atomic energy from neighbors like the Czech Republic and France.

That may seem a case of reaping what you sow , but it also raises the specter of hypocrisy.

So has nuclear energy trapped Germany into a costly, self-defeating  energy policy? Not a bit – Germany self-trapped, so to speak, letting panic, short-sightedness and cynicism trump sound policy making – whether that policy would or would not have included nuclear energy.

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Speaking of other countries not following Germany’s course:

Ma Ying-jeou won 51.6 percent of the total votes to Tsai Ing-wen’s 45.63 percent, while voter turnout, at 74.38 percent, was less that the 76.33 turnout in the previous presidential election in 2008, though all the numbers won’t be finalized until a Central Election Commission meeting on Thursday.

Ma supports the expansion of nuclear energy in Taiwan. His opponent, Tsai Ing-wen, wanted to close all the plants. Nuclear energy was not a big issue in the election – economic ties to mainland China, which Ma initiated, was the determinative factor.

Still, no complaints here.

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Our Japan updates continue every Monday over on the Safety First web site. The site has more too, including, most recently, a great interactive graphic showing how American nuclear facilities weathered various natural hullabaloos surrounding them this year. Great to share with friends. Well worth a visit for more than just the Japan updates.

German Chancellor Angela Merkel.

Consequential Elections

There’s some good news:

China has 28 plants under construction, and India is building seven reactors and has plans for 20 more. And despite its proximity to Japan, South Korea, with 21 active nuclear reactors, is moving forward on 18 more. Vietnam, Indonesia and Thailand are all actively seeking to join the nuclear-power club.

But mostly bad:

When voters here choose a president and a new legislature on Saturday, their decisions will also determine whether Taiwan pulls the plug on a state-backed nuclear power industry that provides the country with a fifth of its electricity.

This is because the challenger Tsai Ing-wen has a good shot of unseating the current President Ma Ying-jeou. I was curious about this, because Ma has overseen a economic boom due to a financial rapprochement with mainland China. Tsai prefers no contact with the mainland. Of course, this is a key issue in any Taiwanese election – much more so than nuclear energy could ever be – and consequently, according to this story on CNN, many Taiwanese working on the mainland are returning home to cast votes:

"Because of the closeness of the race, this election has the highest ever number of returnees," says Professor Ray-Kuo Wu of Fu Jen University, adding that estimates could be as high as 250,000 returnees. "Corporate bosses have mobilized their employees to participate in these elections like never before.

"Hon Hai Precision is chartering six planes to get people back to vote and Formosa Plastics Group is another company that is helping employees return for the election."

If you think the U.S. is the heart of free enterprise, you clearly haven’t been to Taiwan. Anyway, Taiwan is essentially in the same spot as Japan when it comes to nuclear energy because it is an island devoid of oil, gas and coal reserves. That mean – well, why not let the New York Times make the argument?

Proponents of nuclear energy say all the talk of a nuclear-free Taiwan neglects one important detail: how to replace the power generated by the reactors. Taiwan produces about 1 percent of its energy supplies and relies on a mix of imports: oil from the Middle East, coal from China and Australia and natural gas from Indonesia and Malaysia.

And the answer, unfortunately, is a little desperate:

Ms. Tsai speaks of increased conservation and of shifting the Taiwanese economy away from power-hungry manufacturing. Part of her “2025 Nuclear-Free Homeland Initiative” also calls for the construction of gas-fired turbines and an expanded reliance on solar and wind power.

There you go – kill your economic base and plant wind farms on extremely limited land resources.

I took a look at the 2025 initiative referenced by Tsai. Here’s what it proposes in handy Q&A form:

How could Taiwan replace nuclear power?

(A) Increase the proportion of renewable energy: the DPP’s initiative calls for increasing renewable energy by about 6.5% of total electricity generation by 2025.

(B) Improve the efficiency of thermal power: In addition to increasing power generation efficiency, invest in thermal power plants in order to reduce the amount of carbon emissions.

(C) Construction of natural gas power plants as priority because natural gas is a cleaner energy, and future power plants should give priority to using natural gas.

What are other methods to reduce power consumption in the long-term?

(A) Energy Conservation: the Government can encourage people to use energy-saving products.

(B) Adjust industrial structure: instead of just focusing on economic growth, we should encourage green policies among energy-intensive industries.

(C) Liberalization of the electricity industry: the government should liberalize the electricity market, which not only alters the issue of Tai-Power’s monopoly, but it also encourages the development of the renewable energy industry.

Yikes.

Now, nuclear energy isn’t meant to be a trap from which there is no escape, but Taiwan, even more than Japan, really needs to think this out. Nuclear energy was a boon for its growth as an economic power – lots of clean electricity from a limited land mass – and a viable way to replace it would need very careful planning. This plan seems based on some very dubious premises.

Election on Saturday. We’ll check back next week.

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Tell me what you really think:

The authors—in their effort to support a crackpot theory— used data that is essentially useless.

This is Josh Bloom, a scholar at the American Council On Science and Health, commenting on the recent article by Joseph Mangano and Janette Sherman that radiation from Fukushima Daiichi has been killing Americans pell-mell. Eric has done a series of posts on this over the last few weeks, so no need to go over it again; still, Bloom’s takedown is really fun.

In trying to make a case against nuclear power, the authors have succeeded only in embarrassing themselves.

Richly deserved.

Taipei at night.

Where Goes Solar, There Goes Nuclear?

This MIT Technology Review article is good but gets off on the wrong foot:

Politicians are drawing parallels between the $535 million federal loan guarantee issued to bankrupt solar manufacturer Solyndra and loan guarantees that the U.S. Department of Energy is offering to utilities building new nuclear power plants. But while those nuclear startups could also go bust, experts say U.S. taxpayers are unlikely to take a loss on them. That's because the only reactor projects moving forward are those in a handful of southern states, where laws allow utilities to offload the risk onto state ratepayers.

Offload the risk? All the risk of any large electricity project redounds to the ratepayers – because they pay the bills. What those southern companies are doing is using a method that pays for plant construction as it goes along – which means less money borrowed from banks or paid back to banks – and thus less interest charges for ratepayers to eventually absorb.

Here’s how Southern Co. explains this in relation to the Plant Vogtle project:

• The cost of the plant will be phased-in over 7 years, versus included in rates over only two years. (Approx. 1.3 percent/yr over 7 years for total of 9 percent, versus approximately 12 percent total over two years.)
• Customers will avoid paying $300 million in interest charges, thereby saving money over the life of the plant.
• The in-service cost of the plant will be reduced by nearly $2 billion (30 percent).
• Total rate increases required to cover the cost of the plant when it goes into service will be nearly 3 percent lower.
• Preserving utility credit ratings reduces costs for other projects and helps keep customer rates low.

The MIT story is interesting in that it explains how this use of pay-as-you-go differs in regulated and non-regulated states and what the implications of that might be for nuclear energy projects.

It still comes back around to loan guarantees:

While the Solyndra case appears unlikely to be replicated with nuclear loan guarantees, political attacks from Congressional Republicans on the wisdom of loan guarantees for energy projects may, ironically, hurt the prospects for further nuclear projects that many support.

We’ll just have to wait and see, but those Congressional Republicans are as aware of nuclear energy loan guarantees as we are. It doesn’t necessarily follow that where goes solar also goes nuclear.

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If you’re going to open a new nuclear facility, it makes sense to stress safety.

Hsu said Taipower had incorporated improvements to the project, such as an emergency diesel generator facility, after the Fukushima Daiichi Nuclear Power Plant crisis in Japan, triggered by a massive earthquake and tsunami that crippled the facility on March 11.

This is in Taiwan. Hsu is Taipower vice president Hsu Hwai-chiung. There’s more on safety:

In line with Ma’s instructions, Hsu said, Taipower would adopt the strictest possible safety standards in handling the Fourth Nuclear Power Plant’s testing and supervisory work.

“We will invite international professional organizations, such as the World Association of Nuclear Operators, to assist with oversight and the plant will go online only once optimal safety is guaranteed,” Hsu said.

In addition to Taipower’s internal controls, the Ministry of Economic Affairs and the Atomic Energy Council (AEC) have also closely monitored the construction of the plant to ensure safety standards are met, Minster of Economic Affairs Shih Yen-shiang said.

And Ma is Taiwan President Ma Ying-jeou. The World Association of Nuclear Operators, or WANO, is really stepping up to the plate here. These are the recommendations approved by WANO’s board during its general meeting in October:

These included expanding the scope of WANO's activities; developing a world-wide integrated event response strategy; improving WANO's credibility, including important changes to WANO's peer review process; improving visibility; and improving the quality of all WANO products and services.

This sounded as though WANO was interested in adopting the approach taken by the Institute of Nuclear Power Operations, the nuclear energy industry-created watchdog, into the international sphere. And indeed, that’s at least partly the case:

WANO said that it will also put into place an internal emergency response procedure that clearly defines roles and responsibilities in the event of a nuclear emergency. It will also take additional initiatives of working with other key industry organizations such as the International Atomic Energy Agency, the World Nuclear Association and the Institute of Nuclear Power Operations.

Issues of national sovereignty can easily keep WANO from becoming as effective as it could be, but if the organization’s members allow it latitude, as Taiwan is doing, and WANO is able to gather enough authority around itself, then its potential expands accordingly. It’ll be interested to see how the experience in Taiwan goes.

Sort of an interesting merger of the WANO logo – which is a wireframe world map – and a map showing its main offices.