"Germany Shutters Nuclear Plants - The Start of a Trend?"

Sydney M. Williams

Thought of the Day

“Germany Shutters Nuclear Plants – The Start of a Trend?”

August 31, 2011

The fallout from Japan’s March earthquake is being felt across the developed world. The meltdown at Japan’s Fukushima’s nuclear plant has generated a re-thinking of nuclear power. Germany recently announced that they would be shuttering eight of their seventeen plants, with plans to close the other nine over the next ten years. While such moves are not unexpected given the severity of the damage in Japan – uranium stocks, for example, are down between forty and sixty percent year-to-date – it is a surprise that Germany, a world leader in renewable sources for energy, plans to completely vacate the nuclear power generation business. The economic impact could be substantial.

Germany, today an exporter of energy, plans to replace the roughly 25 gigawatts those nuclear plants produce with 23 gigawatts of gas and coal-fired plants by 2020. German law, according to an article in yesterday’s New York Times, requires that renewable energy be purchased first, even when it is more expensive, raising questions as to the viability of any new fossil fuel-powered plants.

The Japanese earthquake and ensuing tsunami last March, with their devastating effects on the Fukushima nuclear facilities, rattled the global nuclear power industry. Japan is a technologically advanced country, so that meltdown was more alarming to the developed world than the Chernobyl disaster of 1986. Reports that last week’s 5.8 magnitude earthquake in Virginia may have caused Dominion Resources’ North Anna nuclear power station to sustain “shaking that exceeded levels for which it was designed” only heightened the fears of those who already view nuclear power with skepticism. The accident and core meltdown at General Public Utility’s Three Mile Island thirty-two years ago was the reason no new nuclear facilities have been built in the U.S. since 1977. Nevertheless, 20% of U.S. electricity generation is nuclear derived.

According to Wikipedia, thirty-two countries have nuclear power generating facilities, collectively producing 14% of their supply. Five of the ten largest economies in the world – the U.S., Japan, Germany, the U.K. and France – generate between 18% (U.K.) and 75% (France) of their electricity production with nuclear plants. (Japan’s nuclear powered electricity generation is expected to be at 20% this fall, down from 29% before the tsunami.)

For years, countries have debated the merits of nuclear-powered electricity generation. Three years ago the Wall Street Journal had a front page article: The Case for and Against Nuclear Power.” Arguments were pretty obvious. Proponents argued, “We have no choice.” “Nuclear is a necessary alternative in an energy-constrained world…the economies make sense.” They pointed out that about a third of greenhouse gas emissions resulted from burning fossil fuels to produce power. Opponents argued that “the costs were way too high to justify the safety hazards, as well as the increased risks of proliferation.” The Fukushima incident added weight to the opponent’s view.

Certainly the events in Japan will not hasten the proliferation of nuclear power plants, except perhaps in Iran, which has other motives. However, it remains unclear whether the rest of the developed world will follow Germany. France, for example, would have a hard time abandoning their dependency on nuclear. But one could certainly expect a moratorium.

While growth in wind farms may gain attention, their costs and land usage is not insignificant. At Al Gore’s Solution Summit in January 2008, the former Vice President suggested that producing one million megawatts (about one quarter of U.S. consumption) would (only) require 3% of the land area in the “lower 48.” As the contiguous states consist of about two billion acres, Mr. Gore was speaking of about 60 million acres – about the size of Georgia. Alternatively, it has been suggested installing wind turbines off the east coast of the United States. The eastern coast of the U.S. is about 1500 miles long. According to Kurzweil Accelerating Intelligence, it takes about 333,000 wind turbines to generate a million megawatts. That would suggest the need for 222 turbines every mile, again a highly unlikely prospect.

Forty-four percent of the generation of electricity in the U.S. today comes from coal; twenty-three percent from natural gas and twenty percent from nuclear. Should nuclear decline, the question becomes which fuel will be the winner. The most obvious beneficiary would appear to be nuclear’s dirtier cousin – natural gas. It is a fuel in plentiful supply in the U.S., especially in shale formations. While environmentalists have raised concerns about hydraulic fracturing polluting water supplies, the burning of natural gas emits substantially less carbon dioxide than coal or oil. There are those who have looked upon natural gas as a “bridge” connecting environmentalists to the power generation business. It has become, in the words of Herman K. Trabish who writes for NewEnergyNews and greentechmedia.com, “the pivot point around which the energy debate revolves today: cheap gas means renewables struggle, but no gas means more coal.”

Even if the United States does not shutter any nuclear plants, it is hard to see the field expanding in line with GDP growth. While it is hard to imagine the rest of the world taking its lead from Germany, in this instance, it does seem there will be a lid on growth. It is also a setback to those who saw nuclear as a means of reducing carbon’s footprint. The shuttering of Germany’s plants is a reminder of the cost of environmentally-pure economies. They are a privilege of the wealthy. The developing world, not surprisingly, is first concerned about living – food, clothing and shelter. Today, their economies are gaining on ours. We, to remain competitive, will have to focus more on creating wealth than spending it. That may mean compromises in terms of adhering to strict regulation – a situation not yet realized by the current Administration that yesterday mentioned seven pending federal rules, each with economic costs in excess of a billion dollars. An increase in the costs of electricity only adds one more hurdle for business.