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green@work : Magazine : Back Issues : Jul/Aug 2005 : Commentary

Commentary

Competitors to Nuclear: Eat My Dust

Private investors have flatly rejected nuclear power, but enthusiastically bought its main supply-side competitors — decentralized cogeneration and renewables.

In a market economy, private investors are the ultimate arbiters of which energy technologies can compete and yield reliable profits, so to understand nuclear power’s prospects, just follow the money. Private investors have flatly rejected nuclear power, but enthusiastically bought its main supply-side competitors—decentralized cogeneration and renewables. Worldwide, by the end of 2004, these supposedly inadequate alternatives (see inset: Gales of Change) had more installed capacity than nuclear power, produced 92 percent as much electricity, and were growing 5.9 times faster and accelerating, while nuclear power was fading.

The world’s nuclear-plant vendors have never made money, and their few billion dollars of dwindling annual revenue hardly qualifies them any more as a serious global business. In contrast, the renewable power industry earns $23 billion a year by adding 12 gigawatts of capacity every year: In 2004, eight gigawatts of wind; three gigawatts of geothermal, small hydro, biomass and wastes; and one gigawatt of photovoltaics (69 percent of nuclear’s 2004 new construction starts, which photovoltaics should surpass this year). Photovoltaics (PV) and windpower markets, respectively doubling about every two and three years, are expected to make renewable power a $35-billion business within eight years. And distributed, fossil-fueled cogeneration of heat and power added a further 15 gigawatts in 2004; it does release carbon, but 30 percent less than the separate boilers and power plants it replaces, or up to 80 percent less with fuel switching.

Windpower’s 50-plus gigawatts of global capacity—half of U.S. nuclear power capacity—paused in 2004 due to Congressional wrangling, but is expected to triple in the next four years, mainly in Europe, which aims to get 22 percent of its electricity from renewables by 2010. One-fifth of Denmark’s power now comes from wind; German and Spanish windpower are each adding as much capacity each year (two gigawatts) than the global nuclear industry is annually adding on average during 2000–2010. No country has had or expects to have economic or technical obstacles to continuing major wind expansion. The International Energy Agency forecasted in 2003 that in 2010, wind could add nine times as much capacity as nuclear added in 2004, or 84 times its planned 2010 addition. Eight years hence, just wind plus industry-forecast PVs could surpass installed global nuclear capacity. The market increasingly resembles a 1995 Shell scenario with half of global energy, and virtually all growth, coming from renewables by mid-century—about what it would take, with conservative efficiency gains, to stabilize atmospheric carbon.

Whenever nuclear power’s competitors (even just on the supply side) were allowed to compete fairly, they’ve far outpaced central stations. Just during 1982–1985, California utilities acquired and/or were firmly offered enough cost-effective savings and decentralized supplies to meet all demand with no central fossil-fueled or nuclear plants. (Alas, before the cheaper alternatives could displace all those plants—and thus avert the 2000 power crisis—state regulators, spooked by success, halted the bidding.)

Today’s nonnuclear technologies are far better and cheaper. They’re batting a thousand in the more competitive and transparent processes that have swept most market economies’ electricity sectors, and are emerging even in China and Russia. A few Stalinist economies like North Korea, Zimbabwe and Belarus still offer ideal conditions for nuclear sales, but they won’t order much, and you wouldn’t want to live there.
No wonder the world’s universities have dissolved or reorganized nearly all of their nuclear engineering departments, and none still attracts top students—another portent that the business will continue to fall, as Nobel physicist Hannes Alfvén warned, “into ever less competent hands,” buying ever less solution to any unresolved problem than in the days of the pioneers. Their intentions were worthy, their efforts immense, but their hopes of abundant and affordable nuclear energy failed in the marketplace.

In 2004, decentralized cogeneration and renewables, excluding big hydro dams (any over 10 megawatts), added 5.9 times as much worldwide net capacity as nuclear power added, and raised annual electricity production 2.9 times as much as nuclear power did. By the end of 2004, these decentralized, nonnuclear competitors’ global installed capacity totaled 411 gigawatts*—12 percent more capacity than global nuclear plants’ 366 gigawatts—and produced 92 percent as much electricity. Thus the “minor” alternative sources actually overtook nuclear’s global capacity in 2003, rivaled its 2004 and will match its 2005 output, and should exceed its 2010 output by 43 percent. They already dwarf its annual growth. Official and industry forecasts indicate they’ll add 177 times as much capacity in 2010 as dwindling nuclear power will. And they’re dwarfed in turn by demand-side opportunities, not graphed here because reliable global implementation data aren’t available. So the big question about nuclear “revival” isn’t just who’d pay for such a turkey, but also, why bother? Why keep on distorting markets and biasing choices to divert scarce resources from the winners to the loser—a far slower, costlier, harder and riskier niche product—and paying a premium to incur its many problems? Nuclear advocates try to reverse the burden of proof by claiming it’s the portfolio of non-nuclear alternatives that has an unacceptably greater risk of non-adoption, but actual market behavior suggests otherwise.

*About 266 gigawatts of mostly gas-fired decentralized cogeneration (emitting 30–80 percent less CO2, depending on fuel), 47 gigawatts of wind, 47 small hydro, 37 biomass and waste, 10 geothermal, and 4 photovoltaics.

Amory Lovins is cofounder and CEO of Rocky Mountain Institute. A consultant experimental physicist educated at Harvard and Oxford, he has advised the energy and other industries for more than 30 years, as well as the U.S. Departments of Energy and Defense. Lovins co-authored the recently released book Winning the Oil Endgame: Innovation for Profits, Jobs, and Security (Rocky Mountain Institute, 2005).


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