When the subject was oil, my students at the Asian Institute of Technology (Bangkok) were politely asked to study the situation in the United States. It told me everything I needed to know about the peaking of oil production, and I presumed that it would do the same for them. In the matter of nuclear, my future students in other institutions of higher or lower education will be told to study the situation in Sweden – assuming that they prefer a passing to a failing grade. Almost everything that needs to be known about that subject can be ascertained from a country that – beginning from almost zero – constructed 12 nuclear reactors in about 13+ years, which eventually supplied more than fifty percent of the country’s electric energy, at a cost that was almost the lowest in the world.
At some point last year, several contributions appeared that turned thumbs down on nuclear energy. Among these were one by Dr Benjamin Sovacool (2010), who provided a strange claim as to why a nuclear renaissance should be questioned. Similarly, Diana Powers (2010) discussed in the New York Times the work of Professor (of economics) John O. Blackburn of Duke University (USA), who was assisted by a graduate student named Sam Cunningham. The conclusion Blackburn and Cunningham arrived at was that a crossover point has been reached for the cost of electricity generated by nuclear and Solar Voltaic systems. The figure they gave was sixteen cents per kilowatt-hour (=16 c/kWh) for both. A diagram in their work showed the cost of nuclear rising, and that of solar falling.
Under the heading of cost, Dr Sovacool has some interesting information for amateurs and non-thinkers. His levelized cost figures include 3-7 c/kWh for hydro, 5-12 c/kWh for wind, 18-30 c/kWh for nuclear, and 20-80 c/kWh for solar voltaics. For what it is worth, his figure for solar voltaics does not match that cited by Ms Powers.
The important thing above is that hydro is the lowest cost source of electricity, which I make a point of accepting and telling my students to remember. Without knowing (or being interested in) the exact cost figure for hydro, I can use Swedish and Norwegian data to infer that nuclear and hydro have about the same unit costs for electricity. I get this because Norway has almost 100 percent hydro, and Sweden has approximately 50-50 hydro and nuclear, and since (before electric deregulation) Sweden and Norway had about the same (aggregate)Â electric cost, the cost of nuclear must have been approximately the same as the cost of hydro. The algebra for that contention is shown in my new energy economics textbook (2011). In addition, my cost calculation for nuclear is 9 cents/kWh.
What about the price of wind generated power. Again Sweden provides a lovely example. The Swedish utility Vattenfall – the 5th largest in Europe – deals in hydro, nuclear, soft coal and wind. According to the last published financial report of that firm, the first three of these made a profit, but wind made a loss. In case anyone is interested, Vattenfall is a boisterous booster of Carbon Capture and Sequestration (CCS), especially in Germany. What they make it their business not to discuss is that if they decide to go into CCS in a big way, only hydro and nuclear will guarantee a profit. As for the situation with wind, nobody in their right mind should expect this to always guarantee a profit, although it may be true that occasionally profits will be registered by wind parks in favourable localities. Tierra del Fuego, for instance, might be at the top of the list here.
Needless to say, I don’t need Dr Sovacool or Professor Blackburn or anybody else to tell me anything about the cost of nuclear. Remembering the economics triumph of the Swedish nuclear inventory, and since I teach energy economics and not physics, I believe that when it becomes necessary it will be possible to construct large (Generation-3) reactors in three years, though perhaps not in Sweden. When that happy day arrives, the economic superiority of nuclear cannot be denied – especially by the highest energy bureaucrat in Sweden, a PhD in technical physics, whose knowledge of academic economics hardly reaches the freshman level at Boston Public.
That brings us to the hysteria now being experienced throughout the world because of the earthquake and tsunami at Fukushima (Japan). For a few months I was stationed next to some sort of waterway near Yokohoma, and I vaguely remembering bad things happening, and the company in which I was stationed having to evacuate our camp. Later, in another company near Gifu Japan, I experienced a mild ‘shock’ of some sort which probably had a Richter value of about one. I was also once stationed in Kobe in a district which, according to one of my former students, was devastated by the Kobe earthquake of a few years ago. Nature has obviously created problems for Japan that do not exist in many other localities, but these problems have mostly been resolved over the years.
The question that needs to be asked then is why was the Fukushima nuclear complex located where it was, or allowed to remain there. That kind of tragic carelessness – or perhaps forgetfulness is a better word – reminds me that the neurotic kind displayed in earthquake proof countries or regions like Sweden, where highly educated and/or influential persons are encouraged to misunderstand or downgrade brilliant technological achievements, and to completely ignore details of the economic architecture that will be essential for maintaining the living standards of their descendents.Â
By. Professor Ferdinand E. Banks: The University of Uppsala (Sweden)
REFERENCES
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Banks, Ferdinand E. (2011). Energy and Economic Theory. Singapore, London and New
      York: World Scientific.
Powers, Diana S. (2010). ‘Nuclear energy loses cost advantage’. The New York Times.
     (July 25: Global Issues).
Sovacool, Benjamin K. (2010). ‘Questioning a nuclear renaissance’. GPPi Policy Paper No.
      8. Lee Kwan Yew School of Public Policy (Singapore)
