Jul 1, 2014

Lessons from a failed energy revolution: the real reasons of the nuclear failure

Cassandra's legacy....The nuclear industry started, literally, with a bang; with the first nuclear bomb of Alamogordo in 1945. But nuclear reactors are older than that. The Alamogordo warhead used plutonium produced by the first nuclear reactor in history, the "Chicago Pile" which had started operating in 1942. It had been built exclusively to produce plutonium for military purposes, just as the other reactors of the same period. These early reactors generated a lot of waste heat and it was soon clear that this heat could be used to produce electric power. That was the origin of the concept of "atoms for peace", popular in the 1950s.

In the mid 1950s, the first commercial reactors for the production of electric power appeared and, subsequently, nuclear energy production grew rapidly, to the point that it seemed possible to create an energy system based entirely on nuclear sources, at least for the production of electricity. It was a moment of great optimism and the age of electricity "too cheap to meter" really seemed to be around the corner. 

But, in the 1970s, something happened that brought the expansion of the nuclear industry to a screeching halt. From the mid 1980s onward, the number of new reactors has been barely sufficient to replace the old ones, with the total production of nuclear energy slowing down its growth and showing a decline during the past few years (image on the right from Wikipedia). The nuclear industry failed its objective of becoming the world's main source of electric power; a market that was instead kept by fossil fuels; in particular by coal.

Various interpretations have been proposed to explain the decline of nuclear energy. Often, several different causes are said to have acted together as you can read, for instance, in "Ten Blows that stopped nuclear power." By far, however, the most popular interpretation seems to be that the nuclear industry was killed by the growing environmental movement. It is an interpretation that pleases both nuclearists (it gives them someone to blame) and environmentalists (who see themselves as a powerful force in the issue). 

These explanations make some sense. But do you really believe that as many as ten causes all acted in the same direction to explain such a clear trend as the nearly complete stop to the construction of new reactors? And do you really think that theenvironmental movement could have such a success in bringing on its knees a supposedly healthy industry, considering the success that the same movement is now having, for instance, in stopping the emissions of greenhouse gases from coal plants?

Rather, I propose here that there is a clear single cause that brought nuclear power on its knees in the 1970s. It was, simply, that nuclear energy stopped being subsidized by the US government. At that point, building new plants became unprofitable and the expansion of nuclear power stopped.

The question of the subsidies needs some explanation, because the nuclear industry often claims it needs none. A list of subsidies is given in the 2011 report by Doug Koplow, who, however, seems to have missed what was probably the historically most important subsidy to the Western nuclear industry: the sale of plutonium to the US military to be used for military weapons. These sales generated revenues of the same order of magnitude as those resulting from the sales of electricity and were a major source of profit for the owners of nuclear plants (for an estimate of these revenues, see note at the end of this post)

With the expansion of nuclear power, profits from plutonium sales increased in proportion. But, in 1977, the US senate approved a law forbidding the reprocessing of plutonium from nuclear plants. In a sense, it was a badly needed decision, since the growing production of plutonium was creating an economic and strategic disaster. The risk of nuclear proliferation increased with the amount of plutonium produced and the number of warheads in the US and in the URSS military systems was growing out of control with more than 30,000 nuclear stockpiled in the US alone. That gave to the concept of "overkill" a whole new meaning (image source). Apart from the strategic problems it created, plutonium purchasing was also a considerable financial burden for the US government, at that time in a serious financial difficulties generated by the ongoing oil crisis.

The disappearance of the revenues from plutonium sales was a major blow to the nuclear industry. It did not send out of business the existing nuclear plants, since the main cost of nuclear energy production is the plant itself. But, in the tight financial moment of the late 1970s, it became nearly impossible to find the large resources to pay for new nuclear plants with the perspective of a return on the investment only for the remote future (if ever). Coal plants could produce higher revenues at smaller initial costs and it is there that investments in energy production were directed. In a sense, we can say that the nuclear industry was a victim of the crisis of the industry that it was supposed to replace: the fossil fuel industry.

The (apparent) end of the oil crisis in the second half of the 1980s eased the world's financial situation, but it didn't help the nuclear industry, which had failed in developing lower cost technologies and still couldn't compete with fossils at the low prices of that period. The new crisis of the first decade of the 21st century reversed again the trend. Today, we see new claims about the need of going nuclear and some evidence of new nuclear plants being programmed. But this nuclear renaissance is slow to start and it may do little more than replace the obsolete plants which badly need to be scrapped.

An interesting point in this story is how stop to the nuclear subsidies was accompanied by the demonization the nuclear industry.  Up to the early 1970s, environmentalists had been generally neutral and often favorable to nuclear energy. Afterward, instead, the tide turned decisively against nuclear energy, with the fortunate slogan "Nuclear? No thanks" created in 1975. We have no evidence that the anti-nuclear campaign was masterminded by some secret agency (but it cannot be ruled out, either). What we can say is that the campaign was extremely effective and in turning nuclear power into the absolute bugaboo of all environmentalists.