Why George Monbiot is Wrong About Nuclear Power
As the Scottish Govt wavers about it’s previously crystal clear stance on nuclear power – and powerful lobby groups circle – it’s worth reading this by Jonathon Porrit about why nuclear power is an expensive disaster we don’t need.
For some time now George Monbiot has astonished his colleagues by becoming a mouthpiece for the nuclear industry. He laid out his reasons for doing so in a Guardian Environment blog on 27th May (see here) and I’m afraid I’ve only just found the time to get around to answering the questions that he posed:
Answers to George Monbiot’s Four Questions:
1. What has the Committee on Climate Change got wrong?
A lot. The principal source for the Committee’s estimates would appear to be DECC’s own figures prepared for them by Mott MacDonald in June 2010 . The assumptions on which this analysis is based are heroic, to put it mildly.
As pointed out by Andrew Broadbent (of CES Social and Economic Research ), these figures have been challenged by a wide range of very different cost projections. Broadbent refers to the authoritative “World Nuclear Status Report” which suggests that nuclear costs would be much higher, and that it is certainly not “the most cost-effective” low carbon technology:
“Because of implicit and explicit guarantees, the private cost element of nuclear is uncertain and continues to escalate….. and the public subsidy portion is generally missing entirely, so that nuclear cannot be properly compared to alternatives, nor can the potentially enormous cost to taxpayers be properly vetted.”
Mott MacDonald produced a new report in May 2011 which pretty much contradicts its own 2010 report. As Broadbent points out:
“Its most important conclusion is that the relative costs of different energy-generating technologies actually depend on which technology is given priority by policy makers – ‘pushing deployment can affect the relative costs’, and ‘it is possible to find cases where offshore wind, CCS and nuclear are each lower cost than the other two’. This means that if renewables are deployed extensively, they may well be cheaper than nuclear – even if using the existing over-optimistic nuclear cost assumption. Why the Committee came to airbrush this vital conclusion, and choose not to point out that government itself has the responsibility for deciding whether to make renewable energy the most cost-effective option, can only be guessed at.”
This is not the place to go into the voluminous literature on hidden subsidies on nuclear power, but the Committee makes only passing reference to what is widely acknowledged to represent a critical distortion in cost estimates for nuclear. Perhaps the most egregious distortion relates to the indirect subsidy which the industry receives in the form of insurance liability.
In view of this, it is highly ironic that Vincent de Rivaz (Chief Executive of EDF in the UK) can regularly be heard calling for a ‘level playing field’ for different energy sources, knowing full well that every other electricity supplier carries its own third-party liability costs. I presume you would support Vincent’s calls for a level playing field, George, though presumably with your tongue rather less deeply embedded in your cheek?
And do you (or anyone, for that matter, on the Committee on Climate Change) actually understand the scale of this subsidy?
Recent research by Versicherungsforen Leipzig GmbH , a company that specialises in actuarial calculations, shows that full insurance against nuclear disasters would increase the price of nuclear electricity by a range of values – €0.14 per kWh up to €2.36 per kWh – depending on assumptions made.
A new paper from Zelenicka-Zovko and Pearce (for Queens University in Kingston, Ontario) summarises the full extent of that indirect subsidy – assessed at $33 million (in 2001 $) per reactor per year. They calculate what the economic value would be if that kind of indirect subsidy was transferred to solar PV in the form of equivalent loan guarantees. The conclusion is startling:
“By the year 2110, the money now slated for nuclear insurance premiums in the US could produce an additional $5.3 trillion if invested in solar PV loan guarantees.”
By the time you factor in all the hidden subsidies, the Committee on Climate Change’s figure of £96 per mWh has no more validity than any other competing estimate, and it is entirely disingenuous of the Committee to put it in the public domain without making clear just how spurious the figure really is. Members of the Committee (and yourself) would be well advised to re-visit the SDC’s 2006 Report on Nuclear Power:
“The new evidence we commissioned for this study suggests that it’s going to be very difficult to estimate the total costs for a new programme based on any new reactor design. All we have to go on are industry estimates, and our evidence clearly demonstrates, on the basis of historical performance, that considerable scepticism is warranted in assessing the reliability of estimates from the industry itself – or indeed from governments that are not acting in a genuinely impartial way.”
The Committee on Climate Change should really know better – as should you. The economics of nuclear power is a dark art, traditionally based on the industry’s own ludicrously biased projections, which are then massaged by vested interests inside Government to come up with something that sounds vaguely manageable to the general public. And I’m disturbed to see how easily the Committee on Climate Change has been co-opted into that process.
Predictably, investors know better. Which is why no reactor ever has been, or ever will be, built without massive public subsidy – a point readily conceded by most industry representatives.
Finally, the Committee’s estimate also makes no allowance for additional, post-Fukushima cost increases. Every energy economist I know acknowledges unreservedly that the cost of nuclear will continue to go up even as the cost of PV continues to come down. The ‘World Nuclear Status’ report from Schneider, Froggatt & Thompson contrasts the tumbling prices for PV with the annual cost increases of between 5-7% every year for nuclear, referring to the current position in a number of US States:
“Despite the disproportionately lower support historically, some analysts consider solar photovoltaic 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 cross-over’ of solar and nuclear costs in 2010 in the US 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 would deliver power for between 14-18 cents per kWh”.
You’ve been unsighted on the costs of PV for a long time, even as we move closer and closer to a world in which PV achieves full grid parity with other sources of electricity. I hope you have now had a chance to read the Ernst & Young Outlook on the UK solar PV industry which points to grid parity for PV here in the UK without any subsidy by 2020? It will happen well before that in Germany as a direct consequence of the far-sighted decisions they took many years ago. Ben Cosh, a former Downing Street Advisor, continues to point out the contrast here:
“It’s taken the Germans 10 years to build their industry to employ 133,000 people, and now they have massive purchasing power and control their supply chains. A typical Germany solar farm construction company locks in Chinese manufacturing capacity worth tens of millions of pounds many years in advance. This enables them to drive down costs and undercut British construction companies, currently by over 25%. A typical utility-scale solar farm takes 18 months to plan, and 3 months to build. Last year alone, the Germans installed 8 GW of solar PV, enough to power 1.4 million homes”.
Germany plans to generate 50% of its day-time electricity from solar by 2020 – with installed capacity of 52 GW. Despite the fact that solar PV has the potential to meet more than 30% of the UK’s day-time electricity by 2040, our target for 2020 is just 2.7 GW – not much more than the 2 GW that Germany installed in one month in June 2010.
It’s still not too late for the UK. But you’ve become a big part of the problem. Your inability (or unwillingness) to track solar cost trends has marooned you in a weird contrarian crusade to undermine the solar industry – even as you volunteer your services as a mouthpiece for the nuclear industry.
And I wonder if you can really still ‘be in love’ with nuclear now that you know rather more about the consequences of Fukushima? You indicated that the principal reason for this emotional spasm was that not a single person had been killed – which is indeed something to be thankful for. But what do you feel now about the 100,000 people evacuated from around Fukushima who are unlikely to return to their homes for many years to come? And don’t you feel just a bit weird falling in love with something that will cost the people of Japan anywhere between $100 billion and $200 billion?
2. Can Nuclear and Renewables Not Co-Exist?
For me, there are four main reasons why co-existence has become a foolish pipedream.
2.1. The Lobbying Position Of The Nuclear Industry Itself
Until the middle of 2009, the nuclear industry’s public position was a “both/and” position – with room for both renewables and nuclear. Since then, however, nuclear industry leaders have become increasingly vocal in arguing that if the UK Government persists with its target of generating 15% of energy from renewables by 2020 (which means at least 35% of our electricity from renewables), then the nuclear industry will suffer very severely.
Both EDF and E-ON are on the record in making this case with growing stridency. And I’m sure your sources inside DECC will have told you in no uncertain terms that what you hear in public from these companies is a pale shadow of the virulently anti-renewables lobbying that they’re doing behind the scenes. How else could EDF hope to recoup the £12 billion it’s already laid out to purchase nuclear sites here in the UK?
2.2. Financial Opportunity Costs
Nuclear power is the most capital-intensive of all supply options. With estimates ranging from £4 billion to £5.5 billion for a new nuclear reactor, there is a clear risk that other options will be frozen out by this level of capital commitment.
There will also be significant opportunity costs regarding energy efficiency – as well as renewables. I long ago came to the conclusion that “the market” will never sort out energy efficiency, and the continuing uncertainties regarding the Green Deal would appear to bear that out. By contrast, I believe that businesses should be regulated into dramatic energy savings in all non-domestic buildings (via the Energy Performance of Buildings Directive), and equally dramatic savings in our domestic housing stock should be secured via direct government subsidy – or investment in our sustainable future, as I prefer to see it.
Every billion that goes back to the nuclear industry, (including the £80 billion-plus that we UK taxpayers will have to find to deal with the legacy effects of our existing reactor programme) is a billion that isn’t going into retro-fitting our hopelessly inefficient housing stock – and simultaneously sorting out the continuing scandal of extraordinarily high levels of fuel poverty here in the UK.
Sometimes you’re so naïve, George. Do you really think a “both/and” world is available when Treasury is imposing a ruthless cap both on direct payments from tax revenues and on levies taken from consumer bills? With the economy the way it is, that combined pot will remain totally inadequate for years to come, and there is no doubt that nuclear will win out over renewables, efficiency and even Carbon Capture and Storage. The £300 million a year that it will get through the Carbon Floor Price (according to estimates by WWF and Greenpeace) is £300 million a year diverted from renewables and efficiency.
2.3. Political Opportunity Costs
The Sustainable Development Commission’s 2006 Report commented specifically on this:
“Were it to be decided to proceed with a new reactor programme (once an “acceptable solution” to the waste issue has been found), there is no doubt that this decision would command a substantial slice of political leadership from whichever party is then in power. Political attention would shift, and in all likelihood undermine efforts to pursue a strategy based on energy efficiency, renewables and more CHP.”
The market reforms announced last week provide ample evidence to that effect. Our entire electricity market system is now being rigged to provide a wholly unjustifiable continuing subsidy to the nuclear industry, while doing a lot less than is required to promote renewables and absolutely nothing to put efficiency at the heart of that reform process.
Even Tim Yeo (Chair of the Energy and Climate Change Select Committee and a keen advocate of nuclear power) has berated his own Government for drawing the wool over people’s eyes in a forlorn attempt to claim that it is sticking to its pledge that there should be no public subsidy for a new generation of nuclear reactors.
“Government must be upfront about the support it’s giving to nuclear, and not hide subsidies in a one-size-fits-all design for long-term energy contracts. It should not distort the market merely to save political face about the precise meaning of the Coalition Agreement for Government.”
2.4. Constraints In Upgrading The Grid
More and more industry specialists are concerned about what is sometimes called a “system clash” between a generation system based predominantly on a small number of nuclear reactors and large-scale gas or coal-fired power stations, and a system based on multiple renewable generators and more distributed local area networks. Greenpeace’s report (“The Battle of the Grids”) eloquently highlights just how problematic this already is in Europe, where it has become commonplace in a number of countries to switch off wind turbines during periods of plentiful electricity supply in order to give priority to nuclear and coal-fired plant.
The already complex task of integrating a multiplicity of decentralised renewable generators will be made all the more complex if the Government seeks simultaneously to bring on a new generation of nuclear reactors. The high capital costs and the nature of nuclear reactors means you need to run them all the time for both economic and engineering reasons. This is what the proposed ‘contracts for difference’ will do since they will purchase all of the available supply from the new reactors to ensure they are economic. If there are 16 GW of new nuclear, as the Government proposes, preference will clearly be given to purchasing from this source. That will both prevent the letting of contracts for renewables entering into this part of the market, and could easily lead to much cheaper renewables being turned off in order to keep the nuclear reactors running at times of low demand.
Finally, a recent report from the IEA (“Harnessing Variable Renewables: A Guide to the Balancing Challenge”, May 2011) has also shown that there is a much greater potential for grids to balance out intermittent renewable energy output than is usually assumed to be the case.
In conclusion, George, you should know better than to take the nuclear industry’s “both/and” rhetoric at face value. Indeed, I sometimes wonder if you read your own words as carefully as others do: “Power corrupts; nuclear power corrupts absolutely….. nuclear operators worldwide have been repeatedly exposed as a bunch of arm-twisting, corner-cutting scumbags”. (Guardian, 5/7) . That’s powerful posturing, George. It’s as if you’re trying to cover up your own embarrassment at ending up as a pawn of the nuclear industry by being ruder about them (on a personal basis) than any anti-nuclear activist would think of being. I hope that strategy works for you; it certainly doesn’t for me.
3. Are Renewables Always Better?
I believe the answer to that question, today, is a clear “yes”. I cannot guess what the situation might be in the future, and as you know, I’ve always supported the continuation of research into new nuclear technologies. It is indeed conceivable that at some stage in the future new reactor designs could prove to be so superior that we would be mad not to take advantage of such breakthroughs in the supply mix. We should continue to keep that door open.
However, I’ve heard so many promises of “better things to come” from the nuclear industry over the last forty years that I attach very little significance to the current wave of similar promises. As Schneider, Froggatt & Thompson tartly comment:
“When the Generation III+ reactor designs began to emerge, roughly a decade ago, they promised to be simpler and safer – but still cheaper – than previous designs. This is because they were being designed from scratch, and could respond to all the regulatory requirements of the day, rather than being modifications of existing designs. The common assumption was that nuclear plants could be built for $1000 per kW. Current estimates, however, are six times that”.
Your dewy-eyed references to the prospective wonders of Generation IV nuclear technologies demonstrate to me that you’ve gone soft in the head on this one – especially as you profess not to believe a single word from this particular “bunch of arm-twisting, corner-cutting scumbags”.
And what do these promises really amount to? Completely unproven assertions about cost and reliability. Right now (and for at least the next decade I would argue) proven renewable technologies offer a much more secure supply-side strategy.
Unfortunately, you’ve clearly given up the fight on that front, not only by consistently misrepresenting the costs (and benefits) of PV, but by regularly playing the oil industry’s favourite card (“their potential to supply much of our electricity is low”), and even by appearing to sympathise with the ranks of NIMBYIST aesthetes who are so offended by the visual intrusiveness of wind farms.
Here again, the contrast with Germany is telling. Keith Barnham at Imperial College has shown that Germany has already installed more wind power than the entire UK nuclear capacity, and every year it installs the equivalent of one new nuclear reactor. Our wind resource, as you know, is at least as good as Germany’s. Of course this is an expensive option, but no more so than a new nuclear programme would be.
You rarely comment positively on those studies and research programmes that set out to demonstrate how our energy future could be a 100% renewable energy future, achieved over a much shorter period of time than you or other nuclear advocates would have us believe. Yet you know as well as I do that 100% renewables (and geothermal) is where we need to get to eventually – so why not seek to get there just as soon as possible without yet another disastrous foray into today’s nuclear cul-de-sac?
There are two other reasons for always favouring renewables over nuclear. The first is one to which you rarely refer. It seems to me to be all-but-inevitable that there will be some terrorist attack on some nuclear facility somewhere in the world at some stage over the next decade. Many security experts are astonished that it hasn’t already happened.
The likelihood of this being a cyber-attack of some description has been greatly amplified by the “success” of the Israeli and US governments infiltrating their “Stuxnet worm” into the operating code of Iran’s nuclear power system.
Secondly, and very briefly, we have to address the issue of proliferation. As Tom Burke has put it, “atoms cannot be made to work for peace without making them available for war”.