Not Business But Personal: Nuclear Energy
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Olivia Comsa
Feb 6, 2013, 3:27:26 AM2/6/13
to euratom, Ilie Turcu, adrian rizea, Mircea Ionescu, Stiopol Mihaela, development-science-participation
http://www.energypulse.net/centers/article/article_display.cfm?a_id=2603
Not Business But Personal: Nuclear Energy
1.29.13 Ferdinand E. Banks, Professor
"Not personal but business" is one of the famous lines delivered by Al Pachino in the film 'The Godfather'. In this short contribution I move in the other direction, because nuclear energy happens to be an essential input for the maintenance of my standard of living. Without it I might have to play less indoor tennis, reduce my consumption of beef, and definitely will have to stop dreaming about long summer vacations on the French or Italian Riviera, or maybe even the Swedish west coast.
According to a European Commission report, Europe's nuclear reactors require an investment of 10-25 billion euros in order to ensure that a Fukushima-like disaster cannot take place. The expression stress-test is sometimes used when discussing the contents of this report, and in case you are not aware, it is the kind of 'lingo' introduced by liars and hypocrites in the United States (U.S.) and elsewhere in order to provide a scientific nuance for their silly condemnations of the U.S. financial system.
More numbers might be useful with regard to the present topic. According to the EU Energy Director, Güenther Oettinger, there are 145 reactors in the EU, and turning the 10-25 billion euros cited above into dollars, we find that that we are talking about 92-230 million dollars per reactor. It perhaps makes more sense to look at dollars per megawatt, because if we did, we immediately come to the conclusion that an average investment of e.g. $160 million per reactor would put the EU reactor inventory in apple-pie order. In these circumstances, introducing macroeconomic considerations, and being familiar with the unimpressive 'efficiency' (i.e. capacity factors) of alternatives for nuclear, makes it clear to me that 160 million dollars is nothing less than a bargain.
At the same time I want to inform one and all that if the writers of the above-mentioned report had come to the conclusion that EU reactors could be made earthquake and tsunami 'impervious' for a measly ten dollars a giga-watt (=1,000,000,000 watts), it wouldn't cause me to change the tone of this appraisal. In choosing between EU engineers and managers, and the kind of parasites and charlatans usually involved with humbug reports of the above kind, I put my trust in the former. More important, I happen to know a great deal about the lies and misunderstandings being circulated about the frailty of nuclear, and the reliability and economy of the so-called renewable assets that people like the Swedish energy minister want to take the place of nuclear. Unfortunately however, I do not know enough to convince her to leave nuclear policies to those of us who can add and subtract.
As you may or may not know, there have been three major nuclear accidents: Three-Mile Island (in the U.S.), Chernobyl and now Fukushima. Three-Mile Island was at least a partial meltdown, but I remember being told that there were no human casualties. Chernobyl of course was an unmitigated disaster, the details of which I have yet to understand, but after that disaster took place, in my articles and lectures, I proposed that similar nuclear installations within the (for Sweden) heavy 'fall-out' range of a possible nuclear accident should be removed, and in addition Sweden and other countries in the same situation should assume the cost of removal. Apparently, some of this is taking place, but it is not taking place as rapidly or comprehensively as it should. For instance, assuming that the reactor at Ignalina (Lithuania) is in the 1000-1500 megawatt class, its replacement by one of the latest (Gen 3) designs makes all the economic sense in the world, both for Lithuania and surrounding countries.
Probably because of the Chernobyl tragedy, the two Swedish reactors across from Copenhagen have been liquidated. Unless I am mistaken, Sweden is going to need the electric energy that has been lost, although the reactors providing it should obviously not be located across from Copenhagen and next to Malmö. The same kind of reasoning applies to Fukushima. The basic issue here in case anyone is interested is the blatant lack of all-inclusive and imaginative regulation, the kind of regulation that would have prevented those reactors from being wrongly located, and I have been informed that the Japanese government is now determined to ensure that Fukushima is the last nuclear regulation blunder in that country.
Chancellor Angela Merkel has also promised the faithful that she will take steps to ensure that Germany is not the victim of a nuclear accident. Of course, six months earlier she assured the German people that more nuclear was essential. The reason for her change in opinion was a poll, or estimate, or nightmare indicating that in order to remain at the head of the German government after the next election in that country, she would probably require increased assistance from environmentalists and various other anti-nuclear voters outside her party.
Many persons in Europe and elsewhere are unconcerned about this bogus democratic foolishness, however it happens to be true that renewables cannot possibly replace nuclear, and so to begin with a German nuclear withdrawal (if it takes place) would feature a very large increase in their import of electricity. Last year, at a conference in Stockholm, a Belgium researcher claimed that a German nuclear retreat could mean a rationing of electricity in Belgium. This caused me to immediately tell him and everyone standing next to him that what Belgium should do is to construct a 1500 MW reactor that produces electricity only for Germany, and for which Germans would have to pay the highest electric price in Europe. As for the rest of the electricity being produced in Belgium, it would be reserved for domestic households and industries. The same kind of reasoning has led me to recommend that Sweden should put an export tax on electricity, and not just for electricity being sold to Germany. Why should Swedish consumers agree to play the fool when mistakes with the production and deployment of energy could have perilous consequences for the Swedish economic future?
The next time I teach energy economics, I am going to stress that if a new nuclear facility costs between 4 and 5 billion dollars in China, then regardless of present costs elsewhere, 4-5 billion dollars should be thought of as the cost of a nuclear facility everywhere in the industrial world, though perhaps not the next day. The source of this wisdom is mainstream economic theory and economic history, and my students will be asked to unreservedly accepted it if they prefer a passing to a failing grade The logic here turns on the ability of intelligent people and countries to eventually correct mistakes made in the short run, and is one of the few aspects of neo-classical economics that I present with a clean conscience to everyone attending my lectures.
By way of closing, I would like to remind everyone that a high demand for electricity is an essential and unavoidable feature of economic development and/or developed economies. For instance, on a global level, electrical energy as a share of final global energy consumption increased from 15.5 to 17.3 percent during the period 2000 - 2009. Moreover, during the same period, in China, electric energy in final energy consumption increased from 11.7 percent to 18.4 percent.
Earlier in this discussion I said that a German nuclear retreat would begin with an increased import of electricity, but the leading energy economist in Germany, Jeffrey H. Michel, has indicated that in the course of such a withdrawal, some environmental goals/intentions would be dumped (2012). He notes that Herr Oettinger announced in a speech to Merkel's CDU that the EU must be "reindustrialised", and Europe's share of the global economic product should be substantially increased. The bottom line here is that without a resort to nuclear, reindustrialisation means that more coal plants will have to be put in operation. The number given by Michel is 17 new facilities between 2012 and 2020, and so it is my sad duty to inform friends and neighbours that Germany will not be the roll-model that many of those ladies and gentlemen assured me that it would become.
References
Banks, Ferdinand E. (2012). Energy and Economic Theory. Singapore, London and New York: World Scientific.
Michel, Jeffrey H. (2012). Durch klimatschutz mehr kohle. (Working Paper).
Not Business But Personal: Nuclear Energy
1.29.13 Ferdinand E. Banks, Professor
"Not personal but business" is one of the famous lines delivered by Al Pachino in the film 'The Godfather'. In this short contribution I move in the other direction, because nuclear energy happens to be an essential input for the maintenance of my standard of living. Without it I might have to play less indoor tennis, reduce my consumption of beef, and definitely will have to stop dreaming about long summer vacations on the French or Italian Riviera, or maybe even the Swedish west coast.
According to a European Commission report, Europe's nuclear reactors require an investment of 10-25 billion euros in order to ensure that a Fukushima-like disaster cannot take place. The expression stress-test is sometimes used when discussing the contents of this report, and in case you are not aware, it is the kind of 'lingo' introduced by liars and hypocrites in the United States (U.S.) and elsewhere in order to provide a scientific nuance for their silly condemnations of the U.S. financial system.
More numbers might be useful with regard to the present topic. According to the EU Energy Director, Güenther Oettinger, there are 145 reactors in the EU, and turning the 10-25 billion euros cited above into dollars, we find that that we are talking about 92-230 million dollars per reactor. It perhaps makes more sense to look at dollars per megawatt, because if we did, we immediately come to the conclusion that an average investment of e.g. $160 million per reactor would put the EU reactor inventory in apple-pie order. In these circumstances, introducing macroeconomic considerations, and being familiar with the unimpressive 'efficiency' (i.e. capacity factors) of alternatives for nuclear, makes it clear to me that 160 million dollars is nothing less than a bargain.
At the same time I want to inform one and all that if the writers of the above-mentioned report had come to the conclusion that EU reactors could be made earthquake and tsunami 'impervious' for a measly ten dollars a giga-watt (=1,000,000,000 watts), it wouldn't cause me to change the tone of this appraisal. In choosing between EU engineers and managers, and the kind of parasites and charlatans usually involved with humbug reports of the above kind, I put my trust in the former. More important, I happen to know a great deal about the lies and misunderstandings being circulated about the frailty of nuclear, and the reliability and economy of the so-called renewable assets that people like the Swedish energy minister want to take the place of nuclear. Unfortunately however, I do not know enough to convince her to leave nuclear policies to those of us who can add and subtract.
As you may or may not know, there have been three major nuclear accidents: Three-Mile Island (in the U.S.), Chernobyl and now Fukushima. Three-Mile Island was at least a partial meltdown, but I remember being told that there were no human casualties. Chernobyl of course was an unmitigated disaster, the details of which I have yet to understand, but after that disaster took place, in my articles and lectures, I proposed that similar nuclear installations within the (for Sweden) heavy 'fall-out' range of a possible nuclear accident should be removed, and in addition Sweden and other countries in the same situation should assume the cost of removal. Apparently, some of this is taking place, but it is not taking place as rapidly or comprehensively as it should. For instance, assuming that the reactor at Ignalina (Lithuania) is in the 1000-1500 megawatt class, its replacement by one of the latest (Gen 3) designs makes all the economic sense in the world, both for Lithuania and surrounding countries.
Probably because of the Chernobyl tragedy, the two Swedish reactors across from Copenhagen have been liquidated. Unless I am mistaken, Sweden is going to need the electric energy that has been lost, although the reactors providing it should obviously not be located across from Copenhagen and next to Malmö. The same kind of reasoning applies to Fukushima. The basic issue here in case anyone is interested is the blatant lack of all-inclusive and imaginative regulation, the kind of regulation that would have prevented those reactors from being wrongly located, and I have been informed that the Japanese government is now determined to ensure that Fukushima is the last nuclear regulation blunder in that country.
Chancellor Angela Merkel has also promised the faithful that she will take steps to ensure that Germany is not the victim of a nuclear accident. Of course, six months earlier she assured the German people that more nuclear was essential. The reason for her change in opinion was a poll, or estimate, or nightmare indicating that in order to remain at the head of the German government after the next election in that country, she would probably require increased assistance from environmentalists and various other anti-nuclear voters outside her party.
Many persons in Europe and elsewhere are unconcerned about this bogus democratic foolishness, however it happens to be true that renewables cannot possibly replace nuclear, and so to begin with a German nuclear withdrawal (if it takes place) would feature a very large increase in their import of electricity. Last year, at a conference in Stockholm, a Belgium researcher claimed that a German nuclear retreat could mean a rationing of electricity in Belgium. This caused me to immediately tell him and everyone standing next to him that what Belgium should do is to construct a 1500 MW reactor that produces electricity only for Germany, and for which Germans would have to pay the highest electric price in Europe. As for the rest of the electricity being produced in Belgium, it would be reserved for domestic households and industries. The same kind of reasoning has led me to recommend that Sweden should put an export tax on electricity, and not just for electricity being sold to Germany. Why should Swedish consumers agree to play the fool when mistakes with the production and deployment of energy could have perilous consequences for the Swedish economic future?
The next time I teach energy economics, I am going to stress that if a new nuclear facility costs between 4 and 5 billion dollars in China, then regardless of present costs elsewhere, 4-5 billion dollars should be thought of as the cost of a nuclear facility everywhere in the industrial world, though perhaps not the next day. The source of this wisdom is mainstream economic theory and economic history, and my students will be asked to unreservedly accepted it if they prefer a passing to a failing grade The logic here turns on the ability of intelligent people and countries to eventually correct mistakes made in the short run, and is one of the few aspects of neo-classical economics that I present with a clean conscience to everyone attending my lectures.
By way of closing, I would like to remind everyone that a high demand for electricity is an essential and unavoidable feature of economic development and/or developed economies. For instance, on a global level, electrical energy as a share of final global energy consumption increased from 15.5 to 17.3 percent during the period 2000 - 2009. Moreover, during the same period, in China, electric energy in final energy consumption increased from 11.7 percent to 18.4 percent.
Earlier in this discussion I said that a German nuclear retreat would begin with an increased import of electricity, but the leading energy economist in Germany, Jeffrey H. Michel, has indicated that in the course of such a withdrawal, some environmental goals/intentions would be dumped (2012). He notes that Herr Oettinger announced in a speech to Merkel's CDU that the EU must be "reindustrialised", and Europe's share of the global economic product should be substantially increased. The bottom line here is that without a resort to nuclear, reindustrialisation means that more coal plants will have to be put in operation. The number given by Michel is 17 new facilities between 2012 and 2020, and so it is my sad duty to inform friends and neighbours that Germany will not be the roll-model that many of those ladies and gentlemen assured me that it would become.
References
Banks, Ferdinand E. (2012). Energy and Economic Theory. Singapore, London and New York: World Scientific.
Michel, Jeffrey H. (2012). Durch klimatschutz mehr kohle. (Working Paper).
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