Nuclear energy appeared poised for a renaissance in recent years as policymakers around the world scrambled to offer incentives for new power plant construction to meet low-carbon energy targets. But the catastrophic events unfolding in and around Japan’s nuclear power plants following last week’s earthquake and tsunami serve as grim reminders to both policymakers and investors that while nuclear may be a low-carbon energy source the risks associated with its deployment are high, some of them immeasurable, and many of them beyond human control.
World leaders who had clung to nuclear energy as the silver bullet that would allow their economies to enjoy unfettered “clean energy” growth may now need to reckon with the unthinkable: the global economy cannot sustain unchecked growth and at the same time meet the carbon reduction targets required to head off climate catastrophe.
In promoting nuclear energy in a February 22, 2010, posting on his Facebook page, Obama’s Energy Secretary Steven Chu maintained that “no single technology” can supply the country’s growing requirements for low-carbon energy. “The Energy Information Administration projects an almost 20 percent increase in overall energy demand and over 30 percent increase in electricity demand over the next 25 years under current laws,” reported Chu. “If we want to make a serious dent in carbon dioxide emissions—not to mention having cleaner air and cleaner water—then nuclear power has to be on the table.”
While Chu asserted that the Obama administration is supportive of investment in wind and solar, he noted that together these two sources of power currently provide only 3 percent of domestic electricity needs and, because of their intermittent nature, are unlikely ever to provide more than 20 to 30%. Meanwhile, he reports, nuclear energy “can provide large amounts of carbon-free power that is always available.”
President Obama has continued to enthusiastically embrace nuclear power as a central component of his clean energy policy and had planned to direct significant public monies to grow the sector. Most recently his proposed 2012 budget called for $36 billion in Federal loan guarantees for the construction of new nuclear reactors and $800 million for nuclear research, primarily for a new generation of small modular reactors, also known as “mini-nukes.”In February the Obama administration announced that a total of $8.33 billion in loan guarantees had been earmarked for the construction of two new nuclear reactors in Burke, Georgia. Yet whether these guarantees would have lured private sector investors was by no means a certainty, even before the crisis at Japan's nuclear power plants riveted the world. Private investors had become increasingly wary of the cost overruns associated with past nuclear power plant projects, untested new technologies, managerial and safety concerns, and the continuing environmental risks associated with the disposal of nuclear waste.
Indeed a number of critics of the deployment of new nuclear power plants have been warning for some time that government incentives represent a massive transfer of risk to taxpayers from the private sector as well as an inefficient use of capital, better spent on clean technologies that can deliver low-carbon energy solutions faster and at a lower cost.
In his paper “The Economics of Nuclear Reactors,” Mark Cooper, a senior research fellow for economic analysis at the Institute for Energy and the Environment, reports that “Wall Street and independent energy analysts estimate efficiency and renewable costs at an average of 6 percent per kilowatt hour, while the cost of electricity from nuclear reactors is estimated in the range of 12 to 20 pr kWh. The additional cost of building 100 new nuclear reactors instead of pursuing a least cost efficiency-renewable strategy, would be in the range of $1.9-$4.4 trillion over the life of the reactors.”
In his paper “Massive Nuclear Subsidies Won’t Solve Climate Change,” Peter Bradford, a former member of the U.S. Nuclear Regulatory Commission and a professor at Vermont Law School, maintains that the nuclear industry “and their congressional allies are praying toward the Mecca of failed industries: the federal treasury. As the economic risks of new reactors become ever clearer, the industry’s desire to offload them on the taxpayer grows apace.”
In the wake of Japan’s nuclear disaster that desire is likely to remain unfulfilled, at least for the time being. But if nuclear power cannot fuel clean energy growth and if Chu is right that renewables cannot fill the vacuum, what options are left? Indeed, Japan’s nuclear disaster may be telling us in no uncertain terms, what many ecological economists have been saying for years: we may have reached the limits to growth on our climate and resource constrained planet, and the implications for policymakers and for how we deploy capital in the coming decades will be huge.
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