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Half-Hearted Nuclear Energy Cannot Continue, Leaders be "All In"

Rod Adams's picture
President and CEO Adams Atomic Engines, Inc.
  • Member since 2006
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  • Mar 31, 2013
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nuclear energyDieter Helm has generously shared an April 2013 article written for Prospect Magazine titled Stumbling towards crisis. In that article Helm points to US energy decision making as a good example that serves as a contrast to UK energy policy making. He sees chosen path in the UK as almost guaranteeing a crisis. In his view, the lack of an official government policy that attempts to pick winners and bureaucratically determine special price points for each competitive technology has enabled the US to move forward smartly with a program that is both reducing energy costs and reducing CO2 emissions.

Helm is onto something, but his preferred solution of using natural gas as a bridge fuel is bound to lead to a half built bridge to nowhere. Nuclear energy offers a solid path to a sustainable future, but nuclear energy advocates and business leaders need to take action to solve the biggest hurdle inhibiting atomic abundance. Helm points the way in the following passage, but his directions are not as useful as they could be with a little refinement.

The nuclear saga cannot go on. For 12 years governments have decided that they don’t want nuclear, and then that they do, that nuclear needs no public subsidy and then that it does, and that a waste solution should be found first, and then that it is not urgent. The current approach to nuclear is a close replica of that of the late 1970s. The plan is to try out a number of different technologies and providers and see if they work. so Hitachi is pitched against EDF, with Westinghouse in the background. It is time to recognise that nuclear is a political technology that requires a long-term political consensus and a national industrial policy for its supply chain. Either do it properly or don’t do it—but the middle way
looks at best very expensive.

I find it almost amusing that Helm seems to be suggesting that the correct path for nuclear energy is by government fiat – which is the approach that has not worked very well. The proper way to develop nuclear energy’s full potential is to follow the path that has led to the successful development of all other fundamentally disruptive technologies. We need entrepreneurial leaders that have made a focused decision to take full advantage of the unique capabilities that the technology offers so that they can crush the incumbent players.

Those leaders need to be “all in”; they cannot engage in a half-hearted attempt to make nuclear somewhat competitive by following all of the existing rules and making only marginal changes in heat source and heat engine designs that work well when the fuel is coal, oil, or natural gas. They also need to make friends with others who have made the same basic technical choice and not engage in destructive competition against other nuclear energy entrepreneurs who do not have much market share to take anyway.

Some nuclear energy business leaders may come out of the fossil fuel industry or out of the established “nuclear” industry, just as some leaders in personal computers started their careers in the mainframe business. However, it is becoming increasingly clear to me that a large portion of the leaders must be people who are frustrated by the old ways and unsatisfied with the lack of progress that is often a result of being reluctant to overturn the generous gravy train that keeps the energy establishment in power. Helm is aware of this challenge as shown in this passage from earlier in the article:

Unfortunately, the incumbent companies have little incentive to come to the rescue. Higher prices mean higher profits. In most markets, high profits attract entrants. Investment by the private sector is, however, a voluntary activity, as the government is discovering. In energy, that investment takes time. Security of supply is a system problem, and not necessarily a problem for the incumbents. For them, it is better if nobody invests, giving them much higher returns on their existing power stations. After a decade of unprecedented mergers and acquisitions—coupled with a good dose of financial engineering—most of the big players are in poor shape to do much investing anyway.

Aside: Helm is not talking specifically about nuclear here, but I think that the thought process applies. He also does not help people understand that about 60-90% of the revenue associated with fossil fuel power generation goes to the fuel supplier, not the power station owner. They are really the companies (and individuals) that benefit when no one builds new power plants. New plants are either more fuel efficient or do not use any fossil fuel at all. That is one of the many reasons I am generally suspicious of people who claim that restricting demand growth is the cheapest way to a better energy future. Market stagnation solidifies the position of the established players. End Aside.

Many of the technical people in the new nuclear industry must have solid foundations in current power generation and heat utilization technology, both nuclear and fossil fuel, but they need to be willing to dig deeper. They must learn more about the unique economic and design opportunities associated with an incredibly energy dense fuel that produces zero atmospheric pollution and costs less than 1/3 as much per unit of heat than the cheapest of its competitors. They must be willing to use new paradigms and techniques and to adopt good ideas that may have been invented somewhere else.

The leaders must also recognize the political aspects of the technology and be unafraid to take advantage of skillful marketing that takes direct aim at the long line of dark grey suits that represent the established energy industry. (Just in case the allusion is not clear to all readers, here is a clip of the famous Apple Computer Super Bowl commercial from nearly 30 years ago.)

Today there is a long line of natural gas cheerleaders and an equally long line of people who seem to accept the notion that directly burning cheap lignite is an acceptable long term energy solution. Focused leaders who have a deep understanding of nuclear technology, politics and human nature need to be willing to throw hammers that may result in some blowback. They must keep pressing forward to develop the energy supply products that their customers want – even if they don’t yet know it.

The world’s energy consumers deserve reliable, emission free, power sources that simply work. They want those amazing systems to be delivered at a surprisingly affordable cost. We need to develop the supply chain, market the technology, and build amazing products that are fully integrated systems that customers really want to buy.

PS – As a bonus, Helm’s posting of his Prospect article includes a revealing commentary on solar energy as a scam that is making a certain type of investor rich. Here is a quote from a column titled “Is Solar Still Worth It” that is on the same page as the last page of Helm’s PDF copy of his article.

Being the sort of investor who likes someone else to take the risk and leave me with the reward, I didn’t take much persuading to call in the solar panel installers in spring 2010.

In this case, the “someone else” happens to be all other taxpayers and electricity rate payers. I personally find the author’s attitude to be incredibly self-centered and bordering on immoral.

The post Dieter Helm – Nuclear saga cannot go on (Leaders must push to a happy ending) appeared first on Atomic Insights.

Discussions
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I K's picture
I K on Mar 31, 2013

Its a shame there isn’t a modern nation going down the France route of a big nuclear build. France built 44 reactors in the 1980s alone and that’s a nation that had 55 million people. In that one decade she built 0.8 reactors per million population.

If Germany had gone nuclear instead of wind & solar and just matched what France was capable of 30 years ago, Germany could have built 65 reactors this decade.

65 reactors of 1.65GW power like the EPR would be able to produce ~870TWh annually.
Not only would that meet 100% of her electricity needs but she would have ~300TWh excess which she can use to export or displace ~50BCM in imported gas by switching gas heating for electricity.

Instead she chose to keep ~80% fossil fuels and build some wind mills and PV farms

Nathan Wilson's picture
Nathan Wilson on Mar 31, 2013

Helm expects political leaders to lead society to clean energy?  That’s not how we do things in the US.

Market forces dominate politics here.  Renewables have made dramatic growth based the market potential of public environmental values, but have only achieved a market share that is too small to noticeably effect energy costs.

To go big on clean energy (whether renewables or nuclear), we have to internalize the external costs of fossil fuel pollution, with a tax or other mechanism.  Then market forces will play their role.

Leo Klisch's picture
Leo Klisch on Mar 31, 2013

The latest from a Gallup Poll:

 

“The numbers: Seventy-six percent of U.S. residents want “more emphasis” on producing solar power and 71 percent have that view about wind power. 

Sixty-five percent want more emphasis on natural gas, and then there’s a big dip. 

Forty-six percent of respondents want more emphasis on oil and 37 percent have that view on nuclear power, which dips to 31 percent for coal.”

Read more: http://thehill.com/blogs/e2-wire/e2-wire/290735-poll-green-energy-popular-partisan-split-on-oil#ixzz2P9NfUBTh 
Follow us: @thehill on Twitter | TheHill on Facebook

The latest from a Gallup Poll

I K's picture
I K on Apr 1, 2013

65 reactors in such a short amount of time is rediculous

Is that so, then how was france a nation of 55 million in 1980 able to build 44 reactors in just the 1980s?

Did the French have more advanced equipment, better technology and better materials 30 years ago than germany does today?

0.8 reactors per million population over a decade, that is what france did in the 1980s
So Germany should be able to build 65 reactors or the USA 250 reactors over a decade, or any advanced nation should be able to at least repeat what little france was capable of 30 years ago.

I K's picture
I K on Apr 1, 2013

Risk is the major problem, which sane utility would invest in anything other than CCGTs when they don’t know the future regulations and prices for fuels/electricity?

How can you risk spending 10x as much for a nuke which will arrive in 15 years when you don’t know what the rules will be in 15 years time nor the price of input fuel or the price of output electricity. Especially when you have seen arbitrary nuclear taxes imposed in other countries (eg spent fuel tax in Germany) 

Likewise how can you risk building a new more efficent coal plant when you don’t know for certain they won’t be hit with extra taxes to bankrupt them in 20 years time.

Everything other than solar, wind and CCGT have uncertainty risk which is the biggest and worst type of cost there is. So wind, solar and CCGTs benefit from this hidden and very real subsidy.

I’m not sure how you can get around this, perhaps the governments need to put a price floor on electricity for 50 years and sign contracts with utilities that their new plants will not be arbitrarily taxed or extra conditions put on them. Short of this I don’t see how we can get away from a CCGT for new build future. Its also environmentally a very bad situation because it forces utilities to keep old coal plants as long as possible because they know if they close their coal capacity there is no chance of adding to it in the future. In effect we in Europe and the USA are forcing utilities to keep old coal plants rather than upgrade them because of this risk premium of doing anything other than building CCGTs

Leo Klisch's picture
Leo Klisch on Apr 1, 2013

Solar is not the only thing getting subsidized.

 “An $800 million project that was slated to provide 100,000 homes with coal-fired power and supply dozens of people with full-time jobs has been stalled for 17 years.

The Two Elk Energy Park in northeast Wyoming has run into a variety of barriers, including the global financial crisis and difficulty securing an investor to share the plant’s costs and regulatory challenges. Already, it has received significant government support, to the tune of nearly half a billion dollars in tax-exempt municipal bonds. But none of it has been spent yet. And recently, it has received $10 million in U.S. Department of Energy grants.”

http://www.eenews.net/Greenwire/2013/04/01/21

Nathan Wilson's picture
Nathan Wilson on Apr 2, 2013

This shows how much people like energy whose production involves local jobs.  We must keep that in mind when tempted to believe that people in the densely populated coastal areas of the US will be willing to send their renewable energy dollar to the windy heartland or sunny desert southwest to get renewable energy.

Stephen Nielsen's picture
Stephen Nielsen on Apr 2, 2013
Hollande Draws French Industry Ire as Nuclear Edge Fades

http://tiny.cc/cv4vuw

Rod Adams's picture
Rod Adams on Apr 2, 2013

@wind smith

I find it somewhat amusing that you have quoted polling numbers in response to an article about the need for leadership. You have helped me to make my point; nuclear is not popular, despite its enormous technical advantages in energy density, fuel cost, emissions per unit generated, and overall levelized cost of power historically.

The situation begs for articulate leaders that can help people understand what they are giving up when they battle against nuclear energy and what they are signing up to endure by attempting to depend on inherently unreliable power sources as the wind and the sun.

I am reminded of an ancient Peanuts cartoon in which Lucy demands that a vote be called to validate an obviously bad decision. Democracy is fine, but it is often technically stupid to depend on popularity contest results to influence decision making.

Rod Adams's picture
Rod Adams on Apr 2, 2013

Leadership decisions make markets move. Don’t limit your view of leaders to elected politicians. 

Leo Klisch's picture
Leo Klisch on Apr 2, 2013

There’s also this issue with import/export power.

“It’s hard to see how suing one of your best customers in hopes they’ll buy more from you is a smart business decision.

But that’s the dubious strategy pursued by North Dakota and its coal industry in filing a federal lawsuit against the state of Minnesota — one of North Dakota’s most cost-effective markets for coal-fired electricity.

This flawed lawsuit seeks to overturn key provisions of Minnesota’s historic 2007 Next Generation Energy Act, keeping the state mired in the fossil-fuel past instead of moving toward a future powered by clean, renewable energy.

The lawsuit, filed Nov. 2 by North Dakota Attorney General Wayne Stenehjem, alleges that the Minnesota law’s restrictions on coal-fired electricity discriminate against North Dakota companies, violating the U.S. Constitution’s interstate commerce clause.”

http://www.startribune.com/opinion/editorials/133714883.html?refer=y

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