Monday, August 24, 2015

Do we face nuclear disaster?

 One of the joys of blogging is eliciting comments from readers.  They are not always polite; sometimes they are downright rude, but at least you know they have taken the trouble to read what you have written, and been sufficiently moved to respond. 
Last month I wrote about the Eskom problem, and one of my friends commented that  what I had had to say made sense, but that I needed to consider our nuclear programme.  The cost seemed excessive, and did we have the skills to undertake such a massive project? So I duly thought some more.
We have a good idea how much our nuclear power programme is going to cost. It comes from the 2010 Integrated Resource Plan (IRP2010). The financial basis was a very thorough study by the Electric Power Research Institute (EPRI), who reported a probable nuclear cost of the order of R30 000 to R35 000/kW for a fleet totalling 9600MW, or an overnight cost of R290 to R340 billion. EPRI also gave some estimates for the costs of renewable energy. Those estimates persuaded the Department of Energy to launch its highly successful renewable programme.
The draft of IRP2010 was discussed in open meetings across the nation. During the debate, the antinuclear lobby raised a great fuss about the nuclear cost. When Cabinet finally approved the Plan, it agreed to an arbitrary increase of 40% in the estimate.  Thus today the official estimate is R400 to R475 billion in 2010 Rand.  There is nothing mysterious or hidden about it. It has been widely debated, and modified in the light of the public debate.
Yet this has not satisfied some vocal minorities. They have proposed a figure of R1 trillion.  There is no basis for this estimate.  It is a figment of someone’s imagination. Yet some believe the figure, and criticize Government for not releasing the basis for its own estimate.  In fact, it is the other way round – Government has been open about the way it estimated the cost; the opponents of nuclear power have refused to give any basis for their guess.
Ultimately, however, the price will be that which is recorded in a construction contract.  Until that happens, it is actually pointless to haggle about the estimates – they are estimates, subject to a wide range of assumptions, and they are all we have until the assumptions become realities.
Government wants nuclear for the best of reasons.  One of the few statesmanlike actions of our President was his pronouncement in 2009, at the Copenhagen climate change gathering, that we would cut our greenhouse gas emissions provided we got financial and technical help.  It triggered an avalanche of goodwill and promises of billions in aid. Our nuclear programme is a major part of the war on carbon. This underlaid the IRP2010 recommendations.
It is wrong to assume that Government is only in it for the possibilities of diversion from a huge programme.  Of course, with this Government, any time you get tens of billions of taxpayers’ hard-won funds being spent, leakage is always possible. But this is not something that is exclusively nuclear.  It doesn’t matter what technology we choose. We will need an extra 80 terawatt-hours (TWh) of energy annually by the end of the 2020’s just to cope with our growing population. 80 TWh translates into an average generation capacity of about 9 GW. The capital cost behind an average kilowatt of energy is about R25 000.  Gas, coal and hydropower are somewhat cheaper, nuclear and renewables more costly, but R25 000 is a reasonable average. So 9GW will cost about R230 billion, whatever the technology employed. 
There have been pronouncements of economic doom at the prospect of spending so much.  However, we have committed to funding R200 billion of renewable energy. That is only going to yield about 10TWh per annum – I did say renewables were capital-intensive, didn’t I? Thus far, there have been no suggestions of misdirection of the money spent on the renewables programme.  Perhaps Government can sometimes be trusted to keep its hands out of the till.
The choice of nuclear has been dictated by the desire to reduce our carbon footprint.  Gas would not make such a large impact.  Gas emits less carbon than coal for a given quantity of energy produced, but we have no gas.  Hydropower would be a low-carbon option, but South Africa has no hydro potential. We would have to import it.  There are proposals to develop the Inga project on the Congo, which could potentially yield 200TWh per year, but it is a long way away.
Some people believe that wind or solar could meet our needs.  The problem is that both cost more than nuclear to build.  Using the figures from the EPRI report, wind would cost about R15 000 per kW installed.  However, it only delivers its installed power about 25% of the time, so the effective cost per deliverable kW is about R60 000.  Similarly, photovoltaics cost about R20 000 per kW installed, but deliver the installed power about 20% of the time, so they cost about R100 000/kW deliverable. Other renewables suffer from a similar high capital cost per deliverable kW.
We have managed to fund our renewable energy programme with power purchase agreements, so the capital cost is effectively hidden from the consumer.  But if 10TWh has required R200 billion in capital, then if it were all renewable energy, it would cost  around R1.6 trillion in today’s money to build the 80TWh we need by the end of the 2020’s, a good deal more than the equivalent nuclear programme.
Renewables are supposed to cost very little to run – they get their energy for free.  However, it is easily forgotten how recently the technology has developed.  The first 2.5MW wind turbine, today’s standard size, began operation in 2005.  The faults in the design were such that the company which developed it went out of business in 2012.  It is hoped that our fleet of turbines will last 25 years.  The life of European machines is more of the order of 15 years.  It is argued that they were an earlier generation to designs that were still evolving (which is true), but they were also smaller and therefore less highly stressed than the modern machines. One of the financial risks of the renewables is whether they can repay their capital investment over a shortened life.
Similar remarks may be made about all other renewable options except hydro power.  In contrast, nuclear power has demonstrated a long and predictable life. In many cases, a sinking fund has been established to ensure safe decommissioning. The long life has meant that the sinking fund is more than adequate to fund the end-of-life costs.  This is certainly the case with our own Koeberg.
Government is not being pig-headed in pursuing nuclear.  We need power, and if the power has to be low-carbon, then we have very limited options.  Not having enough energy is disastrous to the economy. Every kWh not delivered when it is needed costs the economy about R75.  We need to add about a quarter to our generating capacity over the next 15 years.  Nuclear can achieve that.

1 comment:

Crispin in Waterloo said...

" would cost around R1.6 trillion in today’s money to build the 80TWh we need by the end of the 2020’s, a good deal more than the equivalent nuclear programme."

This is a key point, yet incomplete. Solar and wind require 100% back-up from some other source, either gigantic (expensive) batteries or generators running on another fuel. If the cost of backup is 250 Billion, that has to the total cost bringing it to 1.85 trillion.

I suggest considering the following: A windmill costing R20 million has been produced with conventional power. If it were instead manufactured from renewable power with its full cost accounted for, it would cost at least 5 times as much because that electricity is much more expensive to produce. Thus a windmill manufactured from wind energy would cost R100m, not R20m. That second generation windmill would produce electricity costing at least 3 times as much because the capital cost is so much higher. If all the inputs to the windmill were sourced from wind energy such as the housing, transport, schools, erection, servicing, decommissioning and recycling were also sourced from wind energy, the electricity would, like the windmill itself, cost 5 times as much.

A third generation windmill manufactured from the electricity produced by the second generation windmill would cost 5 times as much again - R500m because of the cost of energy. This is simply unaffordable even for the richest nations on Earth. "Cheap" wind power is only possible if there is a cheap source of energy with which to make them. That would be nuclear power and hydro.