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What's All This About The World Bank Not Financing Any More Nukes?

As the cleanup drama continues to unspool around the tsunami-damaged Fukushima nuclear power plant in Japan, the Internets have been cheering the news that the World Bank will not be financing any more such facilities in the future. That’s nice, really, except that it’s not exactly news. The World Bank has not directly financed any nuclear power plants since it put up $40 million for a 150,000 kilowatt plant in Italy back in 1959, and to date the official tally still stands at a grand total of that one.

The new news is that last week the World Bank announced a comprehensive global plan to finance more renewable energy, which is bound to set hairs on fire among conspiracy theorists everywhere. However, if you take a look back at that 1959 nuclear project, it becomes clear why the World Bank finds renewable energy a far more attractive investment.

World Bank will finance renewable energy, not nuclear power plants.

Fukushima nuclear plant (Creative Commons License) by Kawamoto Takua.

No More Nukes For The World Bank, Since 1959

The World Bank has kindly obliged us with a detailed history of its one foray into nuclear energy. It’s well worth a read in full but here are the meaty bits.

The nuclear project was a first for both the World Bank and Italy. The bank’s $40 million loan covered about two-thirds of the overall cost, including the power plant and related works as well as a substation and 60 miles of transmission lines.

Leading up to the selection of Italy as the site of its first nuclear venture, the Bank spent four years analyzing the financial merits of nuclear energy versus conventional energy investments.

The final verdict came out positive for nuclear but only under a strict set of conditions, may of which are relevant today.

First, size matters. In order to be cost competitive, the plant would need to be sited within an existing system that could support a large new facility.

Second, everything is relative. The host country would have to be looking at high-cost fossil fuel as its only other option. In particular, countries with good hydroelectric potential would make poor sites for a new nuclear power plant. Relatedly, the country would need to be able to put up a decent share of financing the plant.

Third, the Bank anticipated that sustaining such a technologically complex project would be beyond the reach of most individual countries. If a country with otherwise good potential lacked sufficient internal resources, the Bank took into consideration a country’s ability to forge intergovernmental agreements.

Fourth, keep your fingers crossed. The Bank looked for countries that could absorb higher-than-anticipated costs if the project failed to perform as expected…in other words, it would have to be populated by ratepayers that could support higher-than-anticipated energy bills (Shoreham, much?).

Fifth, many baskets for those power eggs. Wisely, the Bank decided that “until further operational experience had been obtained,” the host country would need to have other power sources in hand.

Italy fit the bill and the rest is history. The plant went online in 1964 and was shut down 14 years later, in 1978, after an accident knocked out one of its steam generators. By 1982 it was officially declared out of service.

And that was the end of the World Bank’s purpose-driven nuclear energy adventures, although an organization called Nuclear Information and Research Service has tracked down two instances, in the Czech Republic and Bulgaria, where general funds for World Bank projects have been funneled into nuclear energy.

Renewable Energy-Palooza For The World Bank

Recapping the Bank’s stipulations for nuclear energy, one thing sticks out like a sore thumb, and that is the availability of other cost-competitive alternatives.

Back then, hydropower was basically the only other option, but the picture has changed dramatically since then with wind, solar and geothermal coming into mainstream play.

Another key item that has changed is the centralized generation model, which is rapidly being replaced by distributed generation and on site or hyper local fuel harvesting. Along with the aforementioned alternatives, biogas (for example from livestock operations) and biofuels also fit that bill.

Last but not least was the Bank’s test of nuclear energy as a cost-competitive option specifically to meet the energy needs of countries on the development track. From the get-go, the experiment was never designed to bring energy to remote and underserved communities.

Today’s picture is quite different. With the skyrocketing demand for electricity in underserved communities and the need to expand access to communities that have no service at all, the focus is on low cost, low investment alternatives (see CleanTechnica’s recent tour of exportable solar power solutions being developed in Israel for more on that).

Now add the travails of Fukushima to the site selection process, and you can see why the World Bank is not exactly going out on a limb with its refusal to fund any more nuclear power plants.

With that in mind, take another look at the new World Bank energy plan, which in our view amounts to a race against cheap diesel generators for the energy hearts and minds of underserved communities.

In a joint announcement with the United Nations on November 27, the Bank pledged to ramp up the existing (yep, that’s not exactly brand new news either) Sustainable Energy for All (SE4All) initiative, with the establishment of a new finance committee.

SE4All has an energy efficiency component aimed at developed countries but the heart of the program is a focus on

…a concerted effort by governments, international agencies, civil society and private sector to mobilize financing to deliver universal access to modern energy services such as lighting, clean cooking solutions and power for productive purposes in developing countries…

Among the recent developments are the creation of a Hub for Bottom Up Energy Solutions under the UN umbrella, and the City Energy Efficiency Transformation Initiative under the World Bank, along with the aforementioned finance committee, which is the key to kicking the whole thing into high gear.

Here’s the money quote from World Bank Group President Jim Yong Kim:

To reach our goals for access to energy, energy efficiency, and renewable energy, we need to mobilize an additional $600-$800 billion a year from now to 2030. We will now start moving in countries in which demand for action is most urgent. In some of them, only one in ten people has access to electricity. It is time for that to change.

Or, as the SE4All page puts it, “business as usual will not remotely suffice.”

Word.

What’s All This About The World Bank Not Financing Any More Nukes? was originally published on: CleanTechnica. To read more from CleanTechnica, join over 30,000 other subscribers: RSS | Facebook | Twitter.

Tina Casey's picture

Thank Tina for the Post!

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Discussions

Robert Bernal's picture
Robert Bernal on Dec 6, 2013 5:14 am GMT

Looking at the image, a molten salt reactor would not need all those “safety upon safety” controls because they are inherently safe… In other words, there is no excuse to force the world into a submission under fossil fuels rationing and diffuse, intermittant (unreliable) sources.

Furthermore, not only is it our destiny, it is our responsibility to provide the planetary scale energy source nuclear can easily (physically) provide… to a growing technological planetary civilization (and to provide ourselves the power required to clean up the excess CO2 problem).

Tina Casey's picture
Tina Casey on Dec 6, 2013 12:58 pm GMT

Bob, please check your sources. Item 4, for example, is out of date. The Arava region is on track to shift to a network of kibbutz-hosted solar power plants (not just one kibbutz) with energy storage, which will help rid Eilat of dependence on those diesel generators you mentioned (you misspelled Eilat btw) day and night. The network is being developed with an eye toward exporting this solution elsewhere.

Nathan Wilson's picture
Nathan Wilson on Dec 6, 2013 6:11 pm GMT

The issue of how energy infrastructure rolls out in poor areas is an interesting one.  One can image a sequence like this:

  • Level 1: The wealthy get their power from roof-top solar with batteries and diesel backup.  Meanwhile the poor get a few watts of solar PV to power cellphones and flashlights; they still get most of their energy from indoor wood and dung fires (with the resulting lung disease).  Energy poverty with a few token amenities.
  • Level 2: The cities get fledgling grids powered by dirty fossil fuels, spewing pollution in the air (but still delivering a net-benefit to society!).  The grids allow the economy to develop (i.e. factories and other businesses can create jobs and products, lifting the nation out of poverty).  Cooking uses electricity; fossil fuel is only needed for heat and transportation.  Some renewables are added (low penetration-only, mainly for show, absolutely no energy storage is added due to the high cost).
  • Level 3: As the grids reach the multi-gigaWatt level, the fossil fuel plants finally get reasonable pollution controls added, and nuclear power can become the dominant form of generation (if desired). Renewables can also grow (if desired), but must stay below 30% penetration to be affordable.

It is certainly understandable that a politicized organization like the World Bank would prefer to be most active in Level 1 and 2 areas.  By the time an area is at Level 3, they can finance nuclear power plants through the vendors (Russian, Korean, and Japanese nuclear plant suppliers frequently provide financing for their foreign customers).  In many cases a nuclear vendor provides “turn-key” service, wherein they also manage the plant for a number of years.

So while renewables make a valuable contribution to areas at Level 1 and 2, by the time an area reaches Level 3, renewables become a liability.  Their primary impact is to lock-in fossil fuel use, raise energy cost, and to create a distraction that impedes effective grass-roots support for safe, clean nuclear power.

A lot of people dream of a day when renewables at high penetration can be as affordable and environmentally friendly as nuclear, some even wrongly believe that day is today. Many, many breakthroughs on cost are required; the diffuse nature of the energy source means that renewables will always lose on environmental impact.

Bob Meinetz's picture
Bob Meinetz on Dec 6, 2013 5:49 pm GMT

Tina, thanks for your correction.

My main point is that the foundation of the renewables industry is built on visions which are “on track” or “with an eye” to some lofty goal. In practice, the result rarely – if ever – confirms the hype, and this is a problem. Though cooking with Shell’s cookstoves will not subject the world’s poor to as many risks as cooking with coal, it encourages reliance on oil – clearly not sustainable either. And when $billions in investment are diverted from other infrastructure improvements and aid programs with concrete, proven track records, neither investors nor society are ultimately served.

I will follow your updates on Eilat, and would like nothing more than to see an effective and practical solution for these communities come out of it. It would be the first of its kind.

Secondly, the fact that the World Bank is not financing nuclear is hardly an indictment of the technology, as you portray it. The organization has a tradition of providing funds at a grassroots level to the world’s neediest areas. Not coincidentally, these areas are often the most volatile and where nuclear might pose a proliferation risk. But let’s face it – the world’s poor are not driving climate change, and in the most energy-intensive countries nuclear is already making a significant reduction in carbon emissions. Last week the IAEA, under the auspices of the U.N., made this statement at the Warsaw Climate Change Conference:

“Climate change is one of the most important issues facing the world today. Nuclear power can make an important contribution to reducing greenhouse gas emissions while delivering energy in the increasingly large quantities needed for global socioeconomic development.

Nuclear power plants produce virtually no greenhouse gas emissions or air pollutants during their operation and only very low emissions over their entire life cycle. The accident at the Fukushima Daiichi nuclear power plant of March 2011 caused deep public anxiety and raised fundamental questions about the future of nuclear energy throughout the world. It was a wake-up call for everyone involved in nuclear power — a reminder that safety can never be taken for granted. yet, in the wake of the accident, it is clear that nuclear energy will remain an important option for many countries. Its advantages in terms of climate change mitigation are an important reason why many countries intend to introduce nuclear power in the coming decades, or to expand existing programmes. All countries have the right to use nuclear technology for peaceful purposes, as well as the responsibility to do so safely and securely.

The International Atomic Energy Agency provides assistance and information to countries that wish to introduce nuclear power. It also provides information for broader audiences engaged in energy, environmental and economic policy making.”

http://www-pub.iaea.org/MTCD/Publications/PDF/Pub_Climate-Change-NP-2013...

Bob Meinetz's picture
Bob Meinetz on Dec 5, 2013 10:07 pm GMT

Tina, this is merely another installment in the avalanche of fact-free renewables hype being put out by an increasingly marginalized and vitriolic antinuclear movement. You’re completely excluding, or unaware of, the following considerations in your assessment:

1) How much power is required to run a cookstove, compared to the amount of power provided by the systems being hawked by VIA/Barefoot Power

2) Dangers posed by kerosene lamps are minimal compared to the cookstoves residents of third-world countries rely on – and SE4ALL endorses replacing these cookstoves with $billions worth of “clean” stoves, powered by carbon-emitting petroleum, and provided by Royal Dutch Shell – the seventh largest oil company in the world

3) Among SE4ALL’s supposedly sustainable solutions is “the need [in Africa] to improve access to modern energy services and the prospects for oil and gas production” and for exploration of stranded gas technologies

4) The alternative energy solution you tout is a solar PV installation capable of supplying daytime power to one kibbutz in Israel, which at other times is wholly dependent on diesel generation from the neighboring city of Eliat

5) There is no possible justification for your claim that “centralized generation…is rapidly being replaced by distributed generation”

Finally, I’d like to point out that references to fifty-year-old nuclear policy, though a popular tactic of today’s antinuclear movement, are a bit silly and anachronistic. It’s time the public knew the truth about modern nuclear technology and its potential for providing a real solution to the problem of climate change.

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