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Current
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July 2007
New Power Executive
is the energy industry's premier biweekly publication dedicated
to assessing market strategies and trends, technologies, and policy
and in the regulated and unregulated electric and gas sectors.
Nuclear Politics
By Diane Borska, president, the Borska Group Inc
For anyone considering plans to invest or otherwise participate
in the next cycle of nuclear construction, the upcoming presidential
election should be of some interest. While the Bush administration’s
support of nuclear power is well-known and spelled out in the Energy
Policy Act of 2005 with the promise of loan guarantees and investment
tax credits, it is the next administration, which could be led by
Democrats, that will actually preside over the administration and
distribution of said financial incentives. By the way, the actual
appropriation of funds and detailed structure of the loan guarantees
and tax credits promised in EPAct have yet to be completed and an
anxious industry is hoping these issues will be resolved by year’s
end.
This week’s much-ballyhooed CNN-YouTube debate among the Democratic
presidential hopefuls, which I must admit I found immensely entertaining
if not informative, revealed the perspective of several candidates
on nuclear power. One intrepid You-Tube video maker from Ann Arbor,
MI, directly confronted the issue, linking global warming mitigation,
energy independence and nuclear power. John Edwards was first to
respond, stating emphatically “I do not favor nuclear power,”
explaining he feels the capital intensiveness, the time-consuming
construction-licensing cycle and the unresolved waste disposal problem
render nuclear an unacceptable alternative. He then urged development
of wind, solar and cellulose-based biofuels. In contrast, current
frontrunners Barak Obama and Hilary Clinton offered lukewarm support.
Obama, while first expressing support for solar, conceded that “we
should explore nuclear power as a part of the energy mix,”
explaining “there are no silver bullets to this issue.”
Clinton’s response was the most thoughtful, suggesting she
has spent some time on these issues. While first emphasizing the
potential role of energy efficiency – explicitly distinguishing
between fuel efficiency for cars and energy efficiency for buildings
– she cast nuclear in the light of innovation and technology.
“I’m agnostic about nuclear power. John (Edwards) is
right, that until we figure out what we’re going to do with
the waste and the cost, it’s very hard to see nuclear as a
part of our future. But that’s where American technology comes
in. Let’s figure out what we are going to do about the waste
and the cost if we think nuclear should be part of the solution.”
A quite pragmatic perspective for this point in the race, and a
rather encouraging sign, I think. While Bill Richardson, former
energy secretary and governor of New Mexico, was not asked to respond
to this question, his views on nuclear power are well known. Responding
to a press question about the future of nuclear power, Richardson
also responded with his support for renewables,but clearly stated,
“The future in nuclear power is one that has to be on the
table. The nuclear option has to be on the table – not, however,
at the expense of investments in renewable energy and technologies,
which I believe hold more promise. But because nuclear power emits
hardly any greenhouse emissions, and because its technology is improved,
you have to look at it as an option...And nuclear power still has
to resolve problems in waste, cost, safety, although its safety
is improved. “And then Richardson raised a key and critical
point for industry to consider, offering some real advice.”
And nuclear power still has a lot of problems with the public, which
the (nuclear industry) needs to explain, which it has not done so
adequately. Politically they’ve sheltered themselves with
one party. So they need to build alliances with environmental leaders,
with local officials; they sort of sit in a bunker.” I think
Richardson really hit the nail on the head with this comment, giving
industry fair warning about the hard work it really needs to do.
Hmm… Could/should the nuclear power lobby get behind a Clinton-Richardson
ticket?
The Republican candidates will subject themselves to the CNN-YouTube
format this Fall. Hopefully, energy policy will be among the accepted
video questions there as well. However, generally speaking, the
Republican candidates have offered more explicit support for nuclear
power (why is that?). On the stump, Giuliani, Romney and McCain
all express a strong link between nuclear power and energy security.
Undeclared but potential
frontrunner Fred Thompson’s views are not as well known at
this point, but rumors are flying that former energy secretary and
Areva USA board member Spencer Abraham will play a key leadership
role in his campaign.
While candidates from both parties square off on the nuclear question,
and the industry has been taken to task to do a better job building
bridges with the Democratic Party, the industry was handed some
unexpected support from an interesting policy analyst recently.
Jesse Ausubel, director of the Program for the Human Environment
at the Rockefeller University, published a scholarly article in
the International Journal of Nuclear Governance, Economy and Ecology,
2007, 1, 229-243, that has the both the pro and con nuclear power
blogosphere absolutely on fire. Entitled “Renewable and Nuclear
Heresies,” Ausubel’s work analyzes the amount of energy
that renewable energy sources – wind, hydro, solar, biomass
- can produce in terms of watts of power output per square meter
of land use. Comparing this with the watts per meter produced by
nuclear power, he concludes, “Nuclear energy is green. …
Considered in watts per square meter, nuclear has astronomical advantages
over its competitors.” To fully appreciate the impact of his
conclusion, one must first understand Ausubel’s green cred.
As one of the main organizers of the first UN World Climate Conference
in Geneva in 1979, Ausubel can claim credit for substantially elevating
the global warming issue on both scientific and political agendas.
During 1979-1981 he led the Climate Task Force of the Resources
and Environment Program of the International Institute for Applied
Systems Analysis near Vienna, Austria. Given his seat at the forefront
of the policy debate on climate change during the last 25-plus years,
Ausubel’s perspectives garner notice in the green policy community.
Ausubel’s main premise is that technologies succeed when economies
of scale form part of their evolution. He lays out a compelling,
albeit arguable, analysis to demonstrate that there are no economies
of scale that benefit renewables. His claim is that more renewable
kilowatts require more land in a constant or even worsening ratio.
In his analysis, Ausubel considers each renewable energy source.
In a hyperbolic analysis of hydro power, he points out that hypothetically
flooding the entire province of Ontario, Canada, about 900,000 square
kilometers, with its entire 680,000 billion liters of rainfall,
and storing it behind a 60-meter dam would only generate 80 percent
of the total power output of Canada’s 25 nuclear power stations.
Put another way, he concludes that each square kilometer of dammed
land would provide the electricity for just 12 people.
In his analysis of today’s increasingly popular wind power,
Ausubel points out that while wind farms are between three to 10
times more compact than a biomass farm, a 770-square-kilometer area
is needed to produce as much energy as one 1,000 megawatt electric
(MWe) nuclear plant. To meet 2005 US electricity demand and assuming
round-the-clock wind at the right speed, he says an area the size
of Texas would be necessary.
Beyond just defining these limits on renewable resources, Ausubel
also offers some very valuable advice to the nuclear power industry.
Commenting on the enormous amount of venture capital being invested
in wind, water, solar and biomass energy sources, Ausubel sees nuclear
industry expertise as not keeping pace with the kinds of innovation
being underwritten in the renewable space. “In order to grow,
the nuclear industry must extend beyond its niche of electric power
generation,” says Ausubel. He suggests that the nuclear industry
form alliances with methane suppliers to produce green power in
the form of hydrogen for powering electricity-generating fuel cells,
not only in vehicles but in other grid-independent sources. Such
technologies will succeed when economies of scale form part of their
conditions of evolution, Ausubel explains. In contrast, there are,
he suggests, no economies of scale involved in simply erecting more
and more wind turbines.
With his analysis, Ausubel has made an effort to change the stakes
in the energy policy game. While this work has enraged many in the
green community, it offers very valuable perspective and balance
to the creation of sound energy policy. Let’s hope all those
present at the policy table read and consider it.
Areva appears to be taking a page from the GE playbook in more ways
than one.
Diane Borska can be reached at dborska@borskagroup.com
or call 617/592-7301. Check out her market advisory and competitive
intelligence firm at www.borskagroup.com.
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