Nuclear’s Exit by Gunter Pauli

This article introduces a creative approach to the exit of nuclear power as one of the
100 innovations that shape « The Blue Economy ». This article is part of a broad effort
to stimulate entrepreneurship, competitiveness and employment
.

The Market

There are 442 nuclear power stations operational in 30 countries generating 375GW of
energy. There are 16 nations constructing 65 nuclear plants for an additional 63GW. China is
building 27 new plants, Russia 11. The United States operates with 104 the largest number
of nuclear energy generators, well ahead of France (58) and Japan (48 taking the defunct
plants in Fukushima into account). Some 212 plants are older than 30 years and while there
is no absolute science on how long these nuclear centers are safe to operate, the German
Chancellor Angela Merkel set the stage by ordering all plants older than 30 years closed
indefinitely. The European Union operated in 2010 143 plants down from its peak of 177 in
1989.
The relative decline of nuclear had been cast in stone well before the Fukushima disaster.
Lithuania and Italy decided to exit nuclear altogether, while Finland laments that the 1.6GW facility being built by French (AREVA) and German (Siemens) industries is now 5 years behind schedule and has a +70% cost overrun. Solely the delays impose an extra annual bill of €1.3 billion on the consumers, without providing for the increased capital costs. The latestplant ordered by Georgia Power in 2010 is budgeted at $17 billion. The investment cost per kilo Watt hour (kWh) before March 11, 2011 was estimated at $7,000. However the additional safety measures that will be imposed are likely to increase the cost to $10,000 per kWh. It is said that new nuclear plants will be capable of providing base load energy at 5.9cents per kWh. The real cost – stripping nuclear of all its subsidies, depreciation advantages, insurance protection, financing support and waste disposal arrangements is closer to 25 or even 30 cents kWh. Nuclear energy not only enjoys limited liability covered by society, nuclear on top of this is not competitive.
Therefore it is no surprise that in spite of the massive subsidies and legal protection, in 2010, installed capacity for renewables, solely covering wind (193 GW), waste to energy (65 GW), hydropower (80GW) and solar (43 GW) globally surpassed nuclear (375 GW), well before the trilogy of disasters demonstrated that the impossible does happen. Now that the Pacific and Indian Ocean rims are off-limits for any new nuclear power project, the question is how will the world go forward in its quest to generate renewable and affordable energy?
By Gunter Pauli
The Innovation
The Blue Economy proposes that we use what we have and that we study the
co
mpetitiveness of each innovation without expecting subsidies. If in the end the subsidies
are offered does not matter, the key is to succeed in the acid test: are there renewable
energy solutions that are truly affordable. Over the past months I presented a portfolio of
technologies through the Blue Economy Innovations program. These breakthroughs have not
received much attention probably because these require a complex know-how. However if
deployed as a cluster, this handful of sources of heat and electricity will redraw and
strengthen the present landscape of renewable energies. The three innovations are: a)
vertical wind turbines placed inside existing high voltage transmissions masts (Case 11), b)
redesigning existing municipal waste water treatment (MWWT) plants to combine water
treatment with organic municipal solid waste to produce biogas (Case 51), and c) the
combined heat and power generation with double-sided PV wafers placed inside a recycled
container equipped with tracking optics eliminating all moving parts (Case 53).
If we are serious about embarking on a renewable energy strategy without the caveat of
incalculable risks related to nuclear, then we have to go beyond the present mix of solar,
wind, hydro and waste to energy. Whereas these four energies spearheaded the renewables
over the past three decades, we need to embrace additional opportunities that are immediate
and cheaper. It is here that a creative approach to the use of existing facilities like MWWT,
and pylons come into play.
Let us jointly run the numbers. If Germany were to complement 500 of its 9,600 MWWT with
highly efficient biogas generators based on the Scandinavian Biogas know-how
benchmarked in Ulsan, Korea, then the potential baseload supply could reach as much as
5GW at an estimated total investment cost of €10 billion. This capital expenditure is roughly 5
times lower than nuclear and the time between decision and on-stream electricity is limited to
two years compared to a decade, also five times better, thus offering a much better cash
flow. Biogas has a secure and predictable generation – no one doubts that organic waste and
waste water will be in permanent supply – and therefore provides stability to the grid.
If in addition, Germany could install inside one third of its 150,000 high transmission masts
vertical turbines designed by Wind-it (France), then it could generate another 5GW, at
approximately one tenth of the cost of nuclear or €5 billion in total.
There are 1,900 landfills in Germany. If only 20 hectares at 200 of these defunct portions of
the landfills were covered with the combined heat and power generators from Solarus AB
(Sweden) that generate per hectare equipped with 2,000 units (100 rows of 20) 1,830 kWt
and 1,360kWe, then the potential energy supply increases with another 5.44 GWe and 7.32
GWt. The heat can be used to reduce the largest consumer of electricity in households:
warming up water. If the life of these panels were more than 20 years, then the cost per kWh
is under one Eurocent!
T
he First Cash Flow
The daily demand for electricity in Germany is approximately 70 GWh with peaks of 80 GWh.
N
uclear energy represents +20 percent, or about 15 GWh. The calculations above indicate
that even with only a fraction of productive use of the existing infrastructure it is possible to
replace all nuclear (5+5+5.4 GW). However, benchmarked analyses indicate that the cost of
production for these three energy sources is at or below 2 cents per kWh. The present
transfer cost in Germany for nuclear to the grid is 5.6 cents per kWh. At such low cost,
financing represents no problem and considering the speed with which these systems can be
installed, one can even plan the phasing out nuclear within the next 3 to 5 years, provided
one involves the local decision makers in charge of operating landfills and MWWT. The
unions are all in favor.
T
he Opportunity
The obvious additional benefit is the generation of jobs. And the three technologies retained
a
re only a few of the broad portfolio of potential breakthroughs. Imagine that all railways and
freeways were equipped with the Wind-it technology? Imagine that all major waste water
plants of industrial food processing companies adopted a biogas strategy? Imagine that half
of German households were to substitute electric water heating with luminescent thermo-
syphons, reducing household consumption with 15 percent? Germany which is already a
world leader in the export of green technologies, could now even position itself as the world’s
largest exporter of green energy, strengthening its metal, machinery and renewable energy
sector which relies on a strong tissue of middle sized companies. However, the most
powerful shift in the design of an exit strategy for nuclear is that the price difference between
2 and 5.6 cents (3.6 cents per kWh) for the 15 GW of nuclear to be replaced, accumulates
each year into approximately €4.7 billion. This cash flow, generated by the system thanks to
the efficiencies possible by smartly exploiting an available infrastructure with simple
technologies could be sufficient to finance the exit of nuclear and the financing of the
additional capital requirements over a 10 year period.
Now that it seems that the cash is available, a consensus could emerge whereby energy
companies and the communities with a large exposure to investments in nuclear power could
be provided an exit based on the net present value of their assets – and actually get a pre-
agreed payment for discontinuing nuclear energy. And while the forced closure of the oldest
plants already knocked 20-25 percent of their value and the present uncertainty is likely to
cause a further downward pressure on their shares (TEPCO – the owner of the Fukushima
nuclear power stations already lost 75 percent of its market capitalization), it would not be
difficult for financial engineers to come up with a package solution that permits the exit from
nuclear through a win-win strategy, simple broadening the benefits for all, reducing risk and
embracing innovations that are mature for implementation.
S
ubsequently, Germany could even become the world’s financial hub, financing the exit of
nuclear based on consensus and cash flow. This is the ultimate objective of the Blue
Economy: respond to the basic needs of all with what we have, offer the necessary products
and services that are good for your health and the environment at a lower cost, while building
up social capital. It seems like we see how this can be achieved – quicker than we ever
thought.
GUNTER PAULI
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