Saturday, 29 September 2012

The nuclear energy paradox.

Recently there has been a lot column space dedicated to the place of nuclear energy as a low carbon alternative capable of displacing fossil generation and thus reducing carbon emissions. The suggestion that more nuclear energy is a solution to climate change problems has triggered quite a lot of debate and raised many issues with the anti-nuclear lobby. Many suggest that the money would be better spent on renewable energy sources and deliver a quicker and (over time ) cheaper response. I wanted to look at some of these arguments and justifications to see how they stack up.

Amongst the issues to look at are:
  • Safety and overall risk.
  • Cost and comparison with renewables.
  • Proliferation.
  • Perception and political acceptance.
These are the headlines, there are numerous issues within each section and linkages between them that I will try to cover with reference to evidence and case studies. Because of the nature of the beast, events resulting in containment failure and subsequent contamination are very emotive and because of human nature we cant eradicate them.

Some recent reports relating to the Fukushima incident seem to suggest that the death toll has been and will remain quite low (although what is an acceptable mortality rate must be open to debate), however some new reports are emerging that suggest the findings are premature and that the impacts could be more significant. The latest report the World Nuclear Organisation can be found here:

A study, published in the journal Energy and Environmental Science, uses a three-dimensional model of the atmosphere to look at how radioactive materials spread after last year's massive earthquake and tsunami damaged the Fukushima Daiichi nuclear power plant.

This study quantifies worldwide health effects of the Fukushima Daiichi nuclear accident on 11 March 2011. Effects are quantified with a 3-D global atmospheric model driven by emission estimates and evaluated against daily worldwide Comprehensive Nuclear-Test-Ban Treaty Organisation (CTBTO) measurements and observed deposition rates. Inhalation exposure, ground-level external exposure, and atmospheric external exposure pathways of radioactive iodine-131, caesium-137, and caesium-134 released from Fukushima are accounted for using a linear no-threshold (LNT) model of human exposure. Exposure due to ingestion of contaminated food and water is estimated by extrapolation. We estimate an additional 130 (15–1100) cancer-related mortality's and 180 (24–1800) cancer-related morbidity's incorporating uncertainties associated with the exposure–dose and dose–response models used in the study. We also discuss the LNT model's uncertainty at low doses. Sensitivities to emission rates, gas to particulate I-131 partitioning, and the mandatory evacuation radius around the plant are also explored, and may increase upper bound mortality's and morbidity's in the ranges above to 1300 and 2500, respectively. Radiation exposure to workers at the plant is projected to result in 2 to 12 morbidity's. An additional [similar]600 moralities have been reported due to non-radiological causes such as mandatory evacuations. Lastly, a hypothetical accident at the Diablo Canyon Power Plant in California, USA with identical emissions to Fukushima was studied to analyse the influence of location and seasonality on the impact of a nuclear accident. This hypothetical accident may cause [similar]25% more moralities than Fukushima despite California having one fourth the local population density due to differing meteorological conditions.

By comparison a lot more is known about the consequences of the incident at Chernobyl and the findings of this WHO report provides some interesting insight:
Ch WHO Report into deaths and casualties:
5 September 2005 | Geneva -A total of up to 4000 people could eventually die of radiation exposure from the Chernobyl nuclear power plant (NPP) accident nearly 20 years ago, an international team of more than 100 scientists has concluded.
As of mid-2005, however, fewer than 50 deaths had been directly attributed to radiation from the disaster, almost all being highly exposed rescue workers, many who died within months of the accident but others who died as late as 2004.

A great deal of work has been done in both instances, the science and effort is commendable, but this does not detract from the fact that containment failures at nuclear reactors lead to a significant number of mortality's over time, along with a number of other health and environment related problems. It would be fair to assume that as we learn from such disasters, over time our preparedness and systems should improve (in the case of such incidents to an almost imperceptible level), however recent events suggest that this may well not be the case and that there is cause for some concern.

Following the Fukushima Diachi incident there was a requirement to complete stress tests on all existing and proposed reactors. The resultant reports provided some startling evidence about the frailties of many of the initial risk assessments and back up systems put in place. This is going to be both costly in terms of upgrading existing facilities, but also means that the risks of failure may be severely underestimated for many plant. This is clearly exemplified in the examples given below, as is the fact that this both a commercially and politically sensitive area.

In the US recently, following completion of the stress tests, it came to light that risks in relation to flood damage from collapsed or breached dams, had been clearly underestimated. Employees working for the US Nuclear Regulatory Commission tried to raise concerns, but there was inaction, despite the risks having been known about for some time. In the end this information was made public by invoking whistle blower status in order to publish the information (see story below).

A recent study has also highlighted the fact that 23 nuclear sites, including some under construction are vulnerable to tsunami conditions! China and Japan would appear to have the greatest, however Japan is running down its nuclear capacity, in favour of renewable energy, whilst China is building 27 new reactors. Of these, a high proportion are described as being in geologically dangerous positions, it defies belief that UK is considering doing deals with China over nuclear capacity!
More on this story below:

On the issue of costs, one of the main arguments supporting nuclear generation is that it is cheaper than many current fossil fuel technologies and also many renewable options too. The link below is to a recent DECC commissioned report for a generation cost model:

The table below gives levelised costs for a selection of generation technologies as at 2010.

UK energy costs for different generation technologies in pounds per megawatt hour (2010)
TechnologyCost range (£/MWh)[citation needed]
Coal with CO2 capture100–155
Natural gas turbine, no CO2 capture55–110
Natural gas turbines with CO2 capture60–130
New nuclear80–105
Offshore wind150–210
Onshore wind80–110
Solar farms125–180
Tidal power155–390
Divide the above figures by 10 to obtain the price in pence per kilowatt-hour.
More recent UK estimates are the Mott MacDonald study released by DECC in June 2010 [14] and the Arup study for DECC published in 2011.[15]

From the table, it can be seen that some renewable technologies are already competitive with the more traditional generation technologies, however they could become even more efficient with the right policies and infrastructure in place.

At the moment most governments in developed countries are looking to extend and integrate their distribution grids, in order to ensure security of supply and to enable sale/transfer when there is spare production. This makes sense in the context of strategic supply, however there is a developing case for decentralised generation and greater degree of storage capacity. Current policies tend to support (through large subsidies) fossil or nuclear generation with large plant connected to the grid, which in turn tends to shape investment in grid infrastructure. This can however, become expensive to maintain and is not a very efficient means of distribution in all circumstances, particularly for dispersed communities.

If the same levels of subsidy were offered to renewable generation, then the shape of the grid infrastructure would probably change to better accommodate renewable technologies and decentralise generation with local grids. All of this would serve to make renewable generation cheaper!

As with any costing exercise, you have to draw up an envelope for the costing process, which may or may not take into account certain externalised cost (i.e. carbon trading), however depending upon where you draw those lines, may confer a cost advantage in respect of certain fuels and generation technologies.

For nuclear generation, most of the figures are quoted for 'new nuclear', which may well beg the comparison with old nuclear (whatever that might be?), but it is generally a convenience that allows assumptions about disposal costs to be made. This could be considered a little disingenuous as a huge amount of active waste from operation and decommissioning has yet to be disposed of. Also in the case of disasters such as Chernobyl and Fukushima, the generating company cannot be held liable for the full cost of reparations and clean up, as this cost is beyond their capability.  Because of this insurance will only cover a certain amount, beyond that the cost falls to the taxpayer! More on UK costs can be found in this FT article:

Although  there is a current spate of nuclear generation in development, global Uranium deposits are being depleted and have an uneven geo-political distribution. This means that security of supply is not guaranteed and that ultimately it will need to be replaced or substituted. The link below is to a US document on deposits for further information on the subject:
From this it is quite striking that two of the main nuclear economies (US and China) have very limited supplies of their own ore. The most useful quality ore deposits are found in Canada and Australia, both countries have strong lobbyists against developing uranium ore mines (although economically there will certainly be some exploitation).

Thorium has been suggested as an alternative fuel source, it is more abundant and has some operational advantages in terms of conversion efficiency. It is not without disadvantage however, there are still a number of technical issues to be resolved and the isotope requires treatment with Uranium or plutonium in order to achieve criticality. This will mean that there will be a longer lead in time and it is likely to cost more. There would also be a need for different technologies to be deployed for treatment.

A nuclear renaissance would also bring with it the risk of weapons and waste (in the sense that it could be accessed) proliferation. There are numerous types of reactor and several configurations within each generation (i.e. R & D power generation etc.). Although the act of building more reactors for power generation does not pose a significant direct risk of proliferation, the fact that more material that can be used for enrichment will be produced, means that there will be an increased risk.

The following points summarise the problem and potential solutions that can be applied.
Commonly identified problems

No technological fix can overcome a country’s resolve to proliferate
Enrichment and reprocessing present the highest risks
Commercial reactors have much lower risk, but can contribute to proliferation
A combination of institutional and technology solutions will be required
Suggested means to address identified problems
Provide an institutional framework to avoid new enrichment/reprocessing capabilities (the“Attractive Deal')

Develop more proliferation resistant reprocessing technologies to be used by countries that recycle fuel
Further improve the proliferation resistance of reactors, especially those that are deployed to new nuclear countries

In essence it is careful monitoring of the fuel supplied and used, allied to what comes out, that will determine the overall risk of proliferation. New more efficient reactors can also help, but it must also be borne in mind that specific reactors designed for enrichment exist around the globe and are those that require the most careful monitoring.

Given the costs and risks that are associated with nuclear energy, are we any closer to resolving the paradox that exists? Current public and political  policy/strategy may give some clues as to whether or not a consensus is forming.

The diagram below maps the current global status of nuclear power generation.

The status of nuclear power globally:
Operating reactors, building new reactors
Operating reactors, planning new build
No reactors, building new reactors
No reactors, planning new build
Operating reactors, stable
Operating reactors, considering phase-out
Civil nuclear power is illegal
No reactors
IAEA 2012.

In summary, it would appear that the paradox is not yet resolved, however there are some patterns emerging.

The oil producing states seem to favour nuclear as a replacement for fossil fuels, although this is tempered by investment also in renewables.

The BRIC's also seem to be favouring some development of nuclear generation, this appears to be as a means of maintaining competitive energy supplies as their economies and outputs grow. Most are embarking on nuclear generation for the first time which means that they do not have first hand experience problems associated with generation, ageing plant and waste disposal.

The communist (and former communist) countries have wide adoption of nuclear power generation and are experienced in operation and building of plant. They have however, experienced the worst examples of the downside of nuclear energy with the meltdown at Chernobyl. Because these states have very limited public participation in planning processes, policy determination and human rights to protest, it is not surprising that it is here where the paradox is most stark and also, the area of most concern going forward.

Many developed nations are starting to reign back on development of nuclear power generation, Japan not surprisingly, is moving away from nuclear as is Germany. France and the US are both finding that costs associated with upgrading (following stress tests) and maintaining older plant to run for longer are becoming increasingly prohibitive. Europe, the US and Japan seem to be leaning more towards renewables, perhaps this will help to provide a clearer, more balanced evidence base upon which to answer the paradox.

Monday, 10 September 2012

Quantitative Easing, ideologically pleasing?!!!

Chancellor George Osborne was roundly booed when he attended the Paralympics recently, and not without good reason! After all he has presided over calamitous economic policies based on austerity that have not brought about growth, as promised. He is also seen as the villain of piece in demolishing totally the credibility of the greenest government ever, by trying to ride roughshod over planning regulations and cutting subsidies for renewable energy, whilst supporting fossil fuels.

The tendrils of the Treasury extend into every facet of government business, not just in departmental spending budgets, but also policy areas. But what of core economic policy, who is this affecting and how, what lurks in the big red box?

I want to have a bit of a rant about the ideological impacts, as well as the economic ones,  of Quantitative Easing in all of its various guises and ask how this economic instrument might deliver a bigger ideological impact than it does an economic one.

Quantitative Easing (QE) was sold to us as a means to deliver money into the economy in order to stimulate lending, thus helping those looking to buy a new home or for those wanting to expand their business. The reality however, appears to be quite different, for the following reasons:

In the US where multiple phase QE was also in use, we had case studies available, which when considered, you may wonder why we went ahead with further rounds of QE.

The Fed's Quantitative Easing Part 2 has destroyed $4.6 trillion in household wealth, all to boost the stock portfolios of the top 10%.

The Federal Reserve's stated goals in launching QE2 were to trigger a "wealth effect" and boost inflation. The net result of their program is a massive destruction of household wealth. The basic idea is that goosing "risk assets," i.e. stocks, then consumers will feel wealthier and thus motivated to open their wallets and spend, spend, spend. This spending won't be based on any increase in income (household income fell in 2009 despite the massive run-up in stocks) but on the illusion of greater wealth created by a temporarily rising stock market.

Read more:

The rich, that’s according to a Bank of England study, out today, on the distributional effects of quantitative easing.
This from the research:
By pushing up a range of asset prices, asset purchases have boosted the value of households’ financial wealth held outside pension funds, but holdings are heavily skewed with the top 5 per cent of households holding 40 per cent of these assets.
The Bank's strategy has been criticised by groups representing savers and pensioners because of its impact on interest rates, annuity rates and gilt yields, which have all fallen since QE began.

In terms of the number of rounds of QE that are issued, it would appear that there is a diminishing utility associated with further rounds of QE, but also an increase in the inherent level of risk.

In effect the top 1% have the most to gain (this is the political, financial and industrial elite) and the 99% are left with the scraps and an enhanced economic risk.

Those risks are hard to pin down, but as in the report to the BoE (above), a part of this lies in the fact that QE may not deliver any long term benefits in employment, guilt yields or house prices (general asset values). You cannot just go printing money without the risk of impacts and probably the most dangerous of those for most of us, is the risk of an unpredictable and explosive dose of inflation!

So, coming back to the question of fiscal policy or ideology, it would appear that this is slight of hand, providing opportunity for wealth creation/harvesting by the few through asset enhancement.  Meanwhile the vast majority might say that they have detected little or no benefit but are however, now saddled with the devaluation of the domestic economy and the risk of an inflation bubble.

Some might say that there is a greater degree of certainty over the ideological outcome  (in terms of where the wealth ends up, its difficult to call it a distribution), than there are over the economic outcomes!