TODAY’S STUDY: WHAT NUCLEAR ENERGY FACES AFTER FUKUSHIMA

In a Senate subcommittee hearing yesterday, U.S. Nuclear Regulatory Commission Chair Gregory Jaczko impressively answered lawmakers’ doubts about nuclear energy’s practicality and safety with repeated reassurances that the industry has thought through and prepared for every eventuality – until Senator Barbara Boxer (D-Calif) posed a very simple question for which he had no reply.

“Don’t you think,” Boxer asked, “the people in charge of Japan’s nuclear industry would have told their political leaders the same things on March 10?” Boxer went on to quote recent (pre-earthquake) statements even more reassuring than Jaczko’s from TEPCO, the operator of the Fukushima plant now in a meltdown as bad as any nuclear disaster ever.

Further introduction would be a disservice to the report highlighted below. It speaks best for itself. On the economics of nuclear energy, for instance:

“The so-called ‘nuclear renaissance’ was based on the claim that a new design of reactors would be offered that was both safer and cheaper than existing designs. Whether this was a delusion on the part of the nuclear industry or a desperate attempt to get one more chance at the promise of cheap power is hard to say, but it was clearly a fallacy. There is no clear understanding of why cost estimates have escalated so dramatically—sixfold—in the past decade, but it may well be that the process of taking a design from concept to full specification and licensing leads to many more costs than anticipated. The Fukushima accident will likely only ratchet up costs further...”

And on the comparison between nuclear energy and renewable energy:

“There could hardly be a more symbolic picture for the tête-a-tête of renewables and nuclear power than the March 2011 earthquake and tsunami in Japan. The disaster shut down 11 of the country’s nuclear reactors, at least six of which are now condemned, but the Japanese Wind Power Association stated, ‘there has been no wind facility damage reported by any association member, from either the earthquake or the tsunami.’ … Within three weeks of the disaster, Fukushima operator TEPCO, one of the five largest electricity utilities in the world, lost more than three-quarters of its share value, while the Japan Wind Development Company nearly doubled its stock price…”

Much has been written, here and everywhere else, about the implications of the meltdown at Fukushima. The crucial climactic chapter will be written in investors’ ledger books. It would appear the markets, haunted by the same question Senator Boxer raised, are beginning to write the outline of the story.

The World Nuclear Industry Status Report 2010–2011: Nuclear Power in a Post-Fukushima World; 25 Years After the Chernobyl Accident
Mycle Schneider, Antony Froggatt and Steve Thomas, April 2011 (Worldwatch Institute)

Executive Summary

Four weeks after the beginning of the nuclear crisis on Japan’s east coast, the situation at the country’s Fukushima Daiichi power plant remains far from stabilized. The damaged reactors continue to leak radioactivity, and although it is impossible to predict the overall impact of the disaster, the consequences for the international nuclear industry will be devastating.

The present World Nuclear Industry Status Report 2010–2011 was to be published at the occasion of the 25th anniversary of the Chernobyl disaster in Ukraine. The report provides the reader with the basic quantitative and qualitative facts about nuclear power plants in operation, under construction, and in planning phases throughout the world. It assesses the economic performance of past and current nuclear projects and compares their development to that of leading renewable energy sources. An extensive annex provides a country-by-country analysis of nuclear programs around the world.

The report also includes the first published overview of reactions to the catastrophe in Japan. But developments even prior to March 11, when the Fukushima crisis began, illustrate that the international nuclear industry has been unable to stop the slow decline of nuclear energy. Not enough new units are coming online, and the world’s reactor fleet is aging quickly. Moreover, it is now evident that nuclear power development cannot keep up with the pace of its renewable energy competitors.

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Annual renewables capacity additions have been outpacing nuclear start-ups for 15 years. In the United States, the share of renewables in new capacity additions skyrocketed from 2 percent in 2004 to 55 percent in 2009, with no new nuclear coming on line. In 2010, for the first time, worldwide cumulated installed capacity of wind turbines (193 gigawatts), biomass and waste-to-energy plants (65 GW), and solar power (43 GW) reached 381 GW, outpacing the installed nuclear capacity of 375 GW prior to the Fukushima disaster. Total investment in renewable energy technologies has been estimated at $243 billion in 2010.

As of April 1, 2011, there were 437 nuclear reactors operating in the world—seven fewer than in 2002. The International Atomic Energy Agency (IAEA) currently lists 64 reactors as “under construction” in 14 countries. By comparison, at the peak of the industry’s growth phase in 1979, there were 233 reactors being built concurrently. In 2008, for the first time since the beginning of the nuclear age, no new unit was started up, while two were added in 2009, five in 2010, and two in the first three months of 2011†. During the same time period, 11 reactors were shut down…

In the European Union, as of April 1, 2011, there were 143 reactors officially operational…down from a historical maximum of 177 units in 1989.

In 2009…nuclear power plants generated 2,558 TWh of electricity, about 2 percent less than the previous year. The industry’s lobby organization the World Nuclear Association headlined “another drop in nuclear generation”—the fourth year in a row. The role of nuclear power is declining steadily and now accounts for about 13 percent of the world’s electricity generation and 5.5 percent of the commercial primary energy.

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In 2010, 16 of the 30 countries operating nuclear power plants (one fewer than in previous years due to the closure of the last reactor in Lithuania) maintained their nuclear share in electricity generation, while nine decreased their share and five increased their share…

The average age of the world’s operating nuclear power plants is 26 years. Some nuclear utilities envisage reactor lifetimes of 40 years or more. Considering that the average age of the 130 units that already have been closed is about 22 years, the projected doubling of the operational lifetime appears rather optimistic. One obvious effect of the Fukushima disaster is that operating age will be looked at in a quite different manner, as illustrated by the German government’s decision to suspend operation of all reactors over 30 years old immediately following the start of the crisis.

One scenario in this report assumes an average lifetime of 40 years for all operating and in construction reactors in order to estimate how many plants would be shut down year by year. This makes possible an evaluation of the minimum number of plants that would have to come on line over the coming decades to maintain the same number of operating plants. In addition to the units under construction, leading to a capacity increase of 5 GW (less than the seven German units currently off line), 18 additional reactors would have to be finished and started up prior to 2015. This corresponds to one new grid connection every three months, with an additional 191 units (175 GW) over the following decade—one every 19 days. This situation has changed little from previous years.

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Achievement of this 2015 target is simply impossible given existing constraints on the manufacturing of key reactor components—aside from any post-Fukushima effect. As a result, even if the installed capacity level could be maintained, the number of operating reactors will decline over the coming years unless lifetime extensions beyond 40 years become the widespread standard. The scenario of generalized lifetime extensions is getting less likely after Fukushima, as many questions regarding safety upgrades, maintenance costs, and other issues would need to be more carefully addressed.

With extremely long lead times of 10 years and more, it will be practically impossible to maintain, let alone increase, the number of operating nuclear power plants over the next 20 years. The flagship EPR project at Olkiluoto in Finland, managed by the largest nuclear builder in the world, AREVA NP, has turned into a financial fiasco. The project is four years behind schedule and at least 90 percent over budget, reaching a total cost estimate of !5.7 billion ($8.2 billion) or close to !3,500 ($5,000) per kilowatt.

The dramatic post-Fukushima situation adds to the international economic crisis and is exacerbating many of the problems that proponents of nuclear energy are facing. If there was no obvious sign that the international nuclear industry could eventually turn the empirically evident downward trend into a promising future, the Fukushima disaster is likely to accelerate the decline.

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Introduction

The accident came where nobody expected it to happen. On 11 March 2011, triggered by the largest earthquake in the nation’s history, a nuclear catastrophe of yet unknown proportions started unfolding in the world’s preeminent high-tech country: Japan. “At [the Fukushima Daiichi plant], four reactors have been out of control for weeks—casting doubt on whether even an advanced economy can master nuclear safety.... We believe the Fukushima accident was the most serious ever for the credibility of nuclear power.” This is how analysts at Swiss-based investment bank UBS summarized the likely global impact of the tragic developments on Japan’s east coast in a report dated 4 April 2011…

Television viewers around the world witnessed massive hydrogen explosions that devastated reactor buildings and spent fuel pools. The result was large-scale fuel damage, partial meltdown in at least three reactors, and broken fuel elements in what remains of unit four’s spent fuel pool. Helpless operators tried desperately to cool reactors and spent fuel with fire hoses and cement trucks, but short-term responses turned into long-term nightmares. The injection of large amounts of seawater into the reactor cores led to the accumulation of large volumes of salt at the bottom of the pressure vessels, which. The salt crystallizes on hot surfaces to form a hard, effective insulation and prevents the fuel from being cooled. Salt crystals will likely also hinder the operation of valves.

At the same time, the huge quantities of water that were injected and sprayed onto the reactors—an estimated 100 cubic meters per hour—became severely contaminated and must be collected somehow. The problem was so acute that the operator decided to discharge water with “lower” contamination levels into the sea to provide space for more highly affected water. In an unprecedented confrontation broadcasted by Japanese television, the Chairman of the National Fisheries Union told the chairman of Fukushima owner TEPCO: “You’ve trampled on the nation-wide efforts of fishery operators.... Despite our strong demand to cease the flow of contaminated water into the ocean as soon as possible, just a few hours later [more] water was dumped without consulting us—you pushed through. We were really ignored. We wonder if you had ever heard us. This is an affront to us and truly an unforgivable act.”

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After four weeks of uncertainty and a constantly worsening outlook, the nerves of some of Japan’s seemingly endlessly patient people are raw. Tens of thousands of evacuees are waiting for clear information about when—if ever—they can return home. Dogs and cows that were left behind wander along empty roads. Measurements in schools as far as 40 kilometers from the Fukushima plant show extremely high levels of radiation well outside the 20-kilometer evacuation zone. People don’t know what they can safely eat or drink.

Although the accident scenario is different and the people speak a different language, much of the Japanese drama calls to minds an event that took place on the European continent exactly 25 years prior. On 26 April 1986, a hydrogen explosion followed by a power excursion (a massive liberation of energy)…entirely destroyed unit four of the nuclear power plant in Chernobyl, Ukraine, then part of the Soviet Union. For over a week, the burst-open reactor was burning, sending large amounts of radioactivity into the sky and across Europe.

Twenty-five years after what former Soviet President Mikhail Gorbachev now calls “one of the worst manmade disasters of the twentieth century,” the consequences remain visible. The cost to human health, the environment, and the economies of the three former Soviet republics of Ukraine, Belarus, and Russia—the regions that experienced the greatest exposure from Chernobyl—has left deep scars…

Chernobyl is still present in Western Europe, too. In October 2009, the Council of Ministers of the European Union decided to extend by at least 10 years the monitoring system for potentially contaminated food. In the United Kingdom, more than 150,000 sheep that were raised on contaminated pastures remain under slaughter restriction; they have to be moved to “clean” fields for a few months until the radioactivity levels in the meat drop below legal limits. In 2006, 18 Norwegian municipalities newly restricted the raising of sheep after the meat was found to be contaminated at seven times above EU limits. And in Germany, radioactive mushrooms still lead to the ban of contaminated game meat like wild boar.

Yet for the most part, Chernobyl and its horrific consequences appear to be forgotten, downplayed, and ignored. In December 2010, the oldest Ukrainian reactor, Rovno-1, was granted a 20-year lifetime extension, and by 2030 the country projects a doubling of the installed nuclear capacity. Belarus plans to enter into an agreement with Russia to build its first nuclear power plant.4 And Russia has officially 11 reactors under construction, the second largest number in the world behind China.

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It appears that the international nuclear industry has successfully overcome the “Chernobyl syndrome.” According to the International Atomic Energy Agency (IAEA), “some 60 countries have turned to the IAEA for guidance” as they consider introducing nuclear power. One IAEA expert estimates that “probably 11 or 12 countries...are actively developing the infrastructure for a nuclear power program.”5 The nuclear power option has been suggested for several countries on the lower end of the United Nations Human Development Index, including Bangladesh, Kenya, and Senegal…And countries where nuclear energy “is under serious consideration,” according to the industry lobby organization World Nuclear Association, also include Algeria, Egypt, Libya, Morocco, Tunisia, and Yemen…Fortunately, none of these latter projects had been carried out prior to the chaotic situation that the recent wave of popular revolutions triggered throughout the Arabic world.

Today, there are more units under construction worldwide now than in any year since 1988 (except for 2010), and 13 more than at the beginning of 2010. Fifteen new building sites were initiated in 2010—more than in any year since the pre-Chernobyl year of 1985, which saw 20 construction starts.

Is this, finally, what the industry has been calling for a decade the “nuclear renaissance”? Or is the phenomenon limited to only some countries, with China alone counting for 60 percent of the new projects?...How do new grid connections compare with plant life extensions? And what are the latest economic trends of the nuclear option? These are questions that the World Nuclear Industry Status Report analyzed in the previous (2009) edition published by the German government and analyzes in the present version…

The first World Nuclear Industry Status Report was released in 1992—nearly 20 years ago—by the Worldwatch Institute, Greenpeace International, and WISE-Paris. Today—the year 2011—is a timely undertaking to assess where the industry is standing. The 25th anniversary of Chernobyl—“a horrible event” (in the words of Mikhail Gorbachev)…that disrupted the revival of an industry that had barely overcome the shock of the Three-Mile-Island meltdown in 1979—comes just one month after the start of Japan’s Fukushima disaster. In addition to describing the state of the industry today, the report provides the first country-by-country assessment of the effects of Fukushima on the industry and an outlook that compares nuclear power to its main competitor: decentralized renewable energy.

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Overview of Current New Build

Currently, 14 countries are building nuclear power plants, and nearly all of the sites are accumulating substantial and costly delays. As of April 1, 2011, the IAEA listed 64 reactors as “under construction,” nine more than at the end of 2009. This compares with 120 units under construction at the end of 1987, and a peak of 233 such units—totaling more than 200 GW—in 1979…The year 2004, with 26 units under construction, marked a record low for construction since the beginning of the nuclear age in the 1950s.

The total capacity of units now under construction is about 62.5 GW, with an average unit size of around 980 MW. (See Annex 3 for details.) A closer look at currently listed projects illustrates the level of uncertainty associated with reactor building:

Twelve reactors have been listed as “under construction” for more than 20 years. The U.S. Watts Bar-2 project in Tennessee holds the record, with an original construction start in December 1972 (subsequently frozen), followed by the Iranian Bushehr plant, which was originally started by German company Siemens in May 1975 and is now slated to be finished by the Russian nuclear industry. Other long-term construction projects include three Russian units, the two Belene units in Bulgaria, two Mochovce units in Slovakia, and two Khmelnitski units in Ukraine. In addition, two Taiwanese units at Lungmen have been listed for 10 years.

Thirty-five projects do not have an official (IAEA) planned start-up date, including six of the 11 Russian projects, the two Bulgarian reactors, and 24 of the 27 Chinese units under construction.

Many of the units listed by the IAEA as “under construction” have encountered construction delays, most of them significant. The remaining units were started within the last five years and have not reached projected start-up dates yet. This makes it difficult or impossible to assess whether they are running on schedule.

Nearly three-quarters (47) of the units under construction are located in just four countries: China, India, Russia, and South Korea. None of these countries has historically been very transparent about the status of their construction sites.

The geographical distribution of nuclear power plant projects is concentrated in Asia and Eastern Europe, extending a trend from earlier years. Between 2009 and April 1, 2011, a total of nine units were started up, all in these two regions.

Lead times for nuclear plants include not only construction times but also long-term planning, lengthy licensing procedures in most countries, complex financing negotiations, and site preparation. In most cases the grid system also has to be upgraded—often using new high-voltage power lines, which bring their own planning and licensing difficulties. In some cases, public opposition is significantly higher for the long-distance power lines that move the electricity than for the nuclear generating station itself. Projected completion times should be viewed skeptically, and past nuclear planning estimates have rarely turned out to be accurate.

Past experience shows that simply having an order for a reactor, or even having a nuclear plant at an advanced stage of construction, is no guarantee for grid connection and power supply. French Atomic Energy Commission (CEA) statistics on “cancelled orders” through 2002 indicate 253 cancelled orders in 31 countries, many of them at an advanced construction stage. (See also Figure 4.) The United States alone accounts for 138 of these cancellations.20 Many U.S. utilities suffered grave financial harm because of reactor-building projects.

In the absence of any significant new build and grid connection over many years, the average age (since grid connection) of operating nuclear power plants has been increasing steadily and now stands at about 26 years…Some nuclear utilities envisage average reactor lifetimes of beyond 40 years and even up to 60 years. The OECD’s World Energy Outlook 2010 recently gave a timeframe of 45–55 years, up five years from the 2008 edition of the report…

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…Conclusion on Economics

The so-called “nuclear renaissance” was based on the claim that a new design of reactors would be offered that was both safer and cheaper than existing designs. Whether this was a delusion on the part of the nuclear industry or a desperate attempt to get one more chance at the promise of cheap power is hard to say, but it was clearly a fallacy. There is no clear understanding of why cost estimates have escalated so dramatically—sixfold—in the past decade, but it may well be that the process of taking a design from concept to full specification and licensing leads to many more costs than anticipated. The Fukushima accident will likely only ratchet up costs further.

Nuclear Power vs. Renewable Energy Development

There could hardly be a more symbolic picture for the tête-a-tête of renewables and nuclear power than the March 2011 earthquake and tsunami in Japan. The disaster shut down 11 of the country’s nuclear reactors, at least six of which are now condemned, but the Japanese Wind Power Association stated, “there has been no wind facility damage reported by any association member, from either the earthquake or the tsunami.”…Within three weeks of the disaster, Fukushima operator TEPCO, one of the five largest electricity utilities in the world, lost more than three-quarters of its share value, while the Japan Wind Development Company nearly doubled its stock price.

The Fukushima crisis only exacerbates the major changes that the energy sector is facing due to a combination of environmental, resource, and demand factors. At the United Nations climate change conference in Cancún, Mexico, in December 2010, delegates agreed that “climate change is one of the greatest challenges of our time and that all Parties share a vision for long-term cooperative action.” For the first time under the U.N. climate framework, participants acknowledged that “deep cuts in global greenhouse gas emissions are required according to science, and as documented in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, with a view to reducing global greenhouse gas emissions so as to hold the increase in global average temperature below 2°C above pre-industrial levels.”

This statement not only confirms the scientific framework by which global emissions should be measured, but it enables calculations to be made about the volume of greenhouse gases that can be safely released to the atmosphere to avoid serious climatic disruption. Estimates indicate that global emissions must be cut roughly 80 percent by 2050, requiring the effective “decarbonization” of the energy sector. Given that the expected lifetime of investments in energy infrastructure, grids, and power stations typically exceeds 50 years, all new projects built today should fulfill these sustainability criteria or face premature retirement. Although a large number of “low-carbon” technologies are both being deployed and under development, particularly in the renewable energy arena, the key factor is how (and if) these fit together into a zero-emissions energy sector.

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Traditional energy forecasts anticipate rapid increases in energy demand, driven primarily by the need to fuel Asia’s growing economies, particularly in China and to a lesser extent in India. The International Energy Agency assumes that, if current policies continue, global energy demand will increase 47 percent by 2035. Based on this scenario, energy consumption in China will effectively triple, whereas in the European Union and the United States it will increase about 4 percent…

Over the medium term, a pressing concern is the availability of suitable energy resources—particularly liquid fuels—and the associated impact on both supply and consumer prices. The U.K. Energy Research Centre estimated in 2009 that the average annual rate of decline from oil fields that are past their peak of production is at least 6.5 percent, while the decline from currently producing fields is at least 4 percent.4 Just maintaining the current level of output would require 3 million barrels a day of new capacity each year, equivalent to the production of Saudi Arabia over three years…And this does not take into account the growing demand from developing countries. The situation for oil is particularly acute, but concerns about the availability of other fossil fuels, such as natural gas, in some countries and regions is affecting their price significantly.

From the perspective of both climate security and traditional supply security, the current energy system and the policies that shape it are highly unsustainable. The new energy system must be based on two pillars. Firstly, energy efficiency must be at the heart of any new energy system, because meeting the anticipated increase in energy demand at current efficiency levels is not an option given the growth in population and changing consumption patterns. As the European Commission points out, “energy savings is one of the most cost effective ways” to address concerns about climate change and the security of energy supplies…

The second pillar of the new energy system is no (or extremely low) carbon dioxide emissions. This decarbonization could come from three sources: nuclear power, fossil fuels (using emissions capture and storage), and renewable energy. Supporters of nuclear power believe that nuclear should play an increasingly important role in this new, highly efficient, zero emissions energy sector, since in their view all low-carbon technologies will be needed…But this claim must be addressed from multiple perspectives.

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An Economic Comparison

When evaluating the role of nuclear power in the global energy mix, it is important to consider the types of support that nuclear receives compared with other technologies. Proponents of new energy technologies argue that direct government support is needed to enable these to compete with established technologies. Nuclear power has been in commercial operation for more than 50 years, yet it continues to receive large direct and indirect subsidies, in part because electricity prices fail to reflect the full environmental costs, and because of government guarantees for the final storage or disposal of radioactive waste.8 In the United States, even though nuclear and wind technologies produced a comparable amount of energy during their first 15 years (2.6 billion kWh for nuclear versus 1.9 billion kWh for wind), the subsidy to nuclear outweighed that to wind by a factor of over 40 ($39.4 billion versus $900 million)…

Even with the demise of new orders for nuclear power and the rise of other energy technologies, nuclear continues to enjoy unparalleled access to government research and development (R&D) funding. Analysis from the IEA shows the dominance of nuclear power, both fission and fusion, within R&D budgets—commanding nearly two-thirds of total expenditures in recent decades…Compared with renewables, nuclear power has received roughly five times as much government R&D finance since 1986 across the countries of the IEA.

Moreover, the building of new nuclear power plants, which is being proposed for the first time in decades in some developed countries, will require further government subsidies or support schemes, such as production tax credits, insurance for cost overruns, and more With increasing constraints on public-sector spending, state support for one technology will mean less support available for others.

Despite the disproportionately lower support historically, some analysts consider solar photovoltaic (PV) energy to be competitive with nuclear new-build projects under current real-term prices. The late John O. Blackburn of Duke University calculated a “historic crossover” of solar and nuclear costs in 2010 in the U.S. state of North Carolina. Whereas “commercial-scale solar developers are already offering utilities electricity at 14 cents or less per kWh,” Blackburn estimated that a new nuclear plant (none of which is even under construction) would deliver power for 14–18 cents per kWh…Solar electricity is currently supported through tax benefits but is “fully expected to be cost-competitive without subsidies within a decade,” he noted…

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Rapid and Widespread Deployment

Because the transition from fossil fuels to low-carbon energy sources needs to be rapid and global, technologies that are widely available today and that can be implemented in the short term have a clear advantage. Given the need for immediate reductions in greenhouse gas emissions, one cannot underestimate the time needed to introduce new technologies on a mass scale. The commissioning of new energy-generating facilities involves two major phases, pre-development and construction, and both must be considered when comparing the benefits of technologies to emissions reduction.

The pre-development phase can include wide-ranging activities such as conducting extensive consultations, obtaining the necessary construction and operating licenses, getting consent both locally and nationally, and raising the financing package. In some cases, technology deployment may be sped up through the use of generic safety assessments. Alternatively, pre-development may take longer than expected because of local site conditions or new issues coming to light.

The IEA has estimated a pre-development phase of approximately eight years for nuclear power…This includes the time it takes to gain political approval but assumes an existing industrial infrastructure, workforce, and regulatory regime. In the case of the United Kingdom, then-Prime Minister Tony Blair announced that nuclear power was “back with vengeance”…in May 2006, but it was some years before nuclear pre-development even began.

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With regard to construction, nuclear power has a history of delays…According to the World Energy Council, the significant increase in construction times for nuclear reactors between the late 1980s and 2000 was due in part to changes in political and public views of nuclear energy following the Chernobyl accident, which contributed to alterations in the regulatory requirements.

It is important to note the differences in construction of a wind farm (and many other renewable energy schemes) compared to conventional power stations. The European Wind Energy Association (EWEA) likens building a wind farm to the purchase of a fleet of trucks: the turbines are bought at an agreed fixed cost and on an established delivery schedule, and the electrical infrastructure can be specified well in advance. Although some variable costs are associated with the civil works, these are very small compared to the overall project cost.16 The construction time for onshore wind turbines is relatively quick, with smaller farms being completed in a few months, and most well within a year.

The contrast with nuclear power, and even conventional fossil fuel power plants, is significant. Looking at the net additions to the global electricity grid over the last two decades, nuclear power added some 2 GW annually on average during the beginning of this period, compared with a global installed capacity of some 370 GW today…However, this trend has stagnated or decreased since 2005. Over the same period, global installed wind power capacity increased more than 10 GW annually on average, rising steadily to more than 37 GW in 2009 and 35 GW in 2010. Solar PV has accelerated rapidly in recent years as well.

In 2010, for the first time, the cumulative installed capacity of wind power (193 GW), small hydropower (80 GW), biomass and waste-to-energy (65 GW), and solar power (43 GW) reached 381 GW, outpacing the installed nuclear capacity of 375 GW prior to the Fukushima disaster…Although renewable electricity generation (excluding large hydro) will remain lower than nuclear output for a while, it is catching up fast.

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Total investment in clean energy technologies increased 30 percent in 2010 to $243 billion globally, a nearly fivefold increase over 2004…China is the world leader, investing $54.4 billion in renewables in 2010 (up 39 percent over the previous year), followed by Germany at $41.2 billion (up 100 percent) and the United States at $34 billion (up 66 percent)…Italy more than doubled its renewable energy investments in 2010, to $13.9 billion, jumping in rank from 8th to 4th. Extension of a favorable feed-in tariff is expected to more than double Italy’s installed PV capacity in 2011 to around 8 GW—the government’s target for 2020…

Part of this rapid scale-up is due to the geographical diversity of renewable energy deployment. According to the Global Wind Energy Council, some 50 countries are home to more than 10 MW of installed wind power capacity, compared to 30 countries operating commercial nuclear reactors. Although the majority of renewable energy countries are in Europe, there is widespread deployment of wind power in Egypt (550 MW), New Zealand (500 MW), Morocco (286 MW), and the Caribbean (99 MW). Markets in emerging and developing countries now determine growth in wind power, and in 2010 for the first time, more than half of newly added wind power was installed outside of Europe and North America.

China in particular has become the global leader for new capacity in both nuclear and wind power. Forty percent of all reactors under construction are in China. The extent to which both technologies are expected to grow is unparalleled, although the installed capacity for wind power, at roughly 45 GW, is currently more than four times that for nuclear (roughly 10 GW).23 (See Figure 14.) Even with a 3–4 times lower load factor, wind is likely to produce more electricity in China in 2011 than nuclear power. China’s wind power growth is so dramatic that the country must continually raise its production targets, as they are repeatedly being met prematurely.24 China is not only a major implementer of wind technologies, but a global player in related manufacturing.

In the United States, no new nuclear capacity has been added since the Watts Bar-2 reactor in Tennessee was commissioned in 1996, after 23 years of construction. Meanwhile, the share of renewables in newly added U.S. electricity capacity jumped from 2 percent in 2004 to 55 percent in 2009…And although Germany provisionally shut down seven of its reactors after the Fukushima disaster, if the remaining 10 units generate a similar amount of electricity as they did in 2010, then in 2011 for the first time ever renewable energy will produce more of the country’s power than nuclear. Four German states generated more than 40 percent of their electricity from wind turbines alone already in 2010.

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Are Nuclear and Renewables Compatible?

“If someone declares publicly that nuclear power would be needed in the baseload because of fluctuating energy from wind or sun in the grid, he has either not understood how an electricity grid or a nuclear power plant operates, or he consciously lies to the public. Nuclear energy and renewable energies cannot be combined.” — Siegmar Gabriel, then-Federal Environment Minister of Germany…

From a systemic perspective, the key question is whether nuclear energy is in fact compatible with a power system that is dominated by energy efficiency and, in particular, by renewable energy. Experience in places where renewables account for a rapidly growing share of electricity generation, such as Germany and Spain, suggests that efficient “co-dominant” systems are not possible. The main reasons are as follows:

-Overcapacity kills efficiency incentives.
Large, centralized power-generation units tend to lead to structural overcapacities. Overcapacities usually lead to lower prices, which discourages energy efficiency.

-Renewables need flexible complementary capacity.
Increasing levels of renewable electricity will require flexible, medium-load complementary facilities rather than inflexible, large, baseload power plants. Johannes Lambertz, CEO of RWE Power, one of Germany’s largest electricity utilities, observed in 2010 that, “what is most important for the energy industry is the wise integration of renewable energies into the power generation market.”28 In Germany, the injection of renewable electricity has legal priority over nuclear and fossil power. But in October 2008, wind energy generation was so high that some non-renewable electricity had to be offered for “negative” prices on the power market because utilities could not reduce the output from nuclear and coal plants quickly enough—even though some 8 GW of nuclear capacity was off line for maintenance.29 Since then, negative electricity prices, legal in Germany since September 2008, have become a more frequent phenomenon: in the six months between September 2009 and February 2010, power prices in Germany dropped into the red on 29 days. Negative prices reached stunning levels: on October 4, 2009, one power producer had to pay up to !1,500 per megawatt-hour (15 cents per kilowatt-hour) to get rid of its electricity.

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- Future grids go both ways.
Smart metering, smart appliances, and smart grids are on their way, and received considerable emphasis in the economic stimulus packages of many countries in 2008. Under this entirely redesigned grid system, which is radically different from the top-down centralized approach, the user serves a generation and storage function. The consumer becomes producer and vice-versa, giving rise to the “prosumer.”

In many developing countries, where key decisions about grid infrastructure have yet to be made, it is critical to assess the implications of these basic system choices. Industrial countries illustrate the outcome of past strategic choices. Unfortunately, although there are numerous successful local and regional cases, there is no “good” example of a successful national energy policy that provides affordable, sustainable energy services. All countries have implemented policies that have serious drawbacks, and major “repair jobs” are necessary to address the defaults…