2) Not in a free market world

Lawrence Solomon
National Post
December 28, 2000

In my last column which dealt with nuclear power’s inability to respond to another OPEC oil crisis, I made one central point: Nuclear power plants take too many years to plan and build, and are, in any event, too prone to system- wide failure to be part of any sensible defence against a third OPEC oil crisis. As I noted, all the nuclear reactors that have been built in North America were planned or under construction prior to the first OPEC oil crisis. Although North American utilities and North American governments proposed hundreds of new nuclear plants after both the 1974 and 1979 OPEC oil crises to free us from dependence on Arab energy supplies, all were cancelled before they could be built.

Morgan Brown, an employee of Atomic Energy of Canada Ltd., does not dispute the historical fact of nuclear power’s failure to rise to the challenge of either OPEC oil crisis. In fact, he does not directly dispute almost anything in my column — most of his “corrections” correct points I did not make. When he does directly dispute my evidence, he is entirely mistaken.

Japan is the only developed nation in the world with significant ambitions for new nuclear power plants, but even this highly oil-dependent nation has dramatically scaled back its plans. According to International Energy Outlook, an official source, after the nuclear plants already under construction are completed, Japan’s nuclear industry will go into decline, with more plants being retired after 2010 than constructed. As for the rest of the world, less than 8% of the nuclear capacity the International Atomic Energy Agency predicted for us in 1974 materialized. Yes, Mr. Brown is able to point to a reactor here and there that may get built: I did not write otherwise. And yes, in South Korea and other countries where citizens have few rights, corners can be cut to shorten the construction time. But these scattered instances do not make for a vibrant, growing industry. The number of nuclear reactors in the world has peaked. In 20 years, according to the U.S. Department of Energy, that number will be cut in half.

Mr. Brown not only misrepresents the big picture, he gets the small details wrong as well. He claims only eight out of 20 reactors in Ontario — not nine of 21 as I stated — have been shut down for an extended period of time. The reactor he disowns is the Douglas Point reactor on Lake Huron, started by his company in the 1950s, completed in 1968 and trumpeted as “Canada’s first full-scale nuclear-electric generating station.” AECL planned to make money by selling Douglas Point power to Ontario Hydro; then, after proving the economic viability of the Candu reactor, it planned to sell the station itself to Hydro.

Instead, the Douglas Point station lost money almost every year, and Hydro refused to buy it for $1. AECL finally decided to shut it down in the early 1980s, after recognizing that even two OPEC oil crises in five years could not justify running this loser any longer.

Mr. Brown also misleads in portraying the number of failed reactors in the United Kingdom. The International Nuclear Safety Center, operated by the Argonne National Laboratory for the U.S. Department of Energy, lists nine nuclear power reactors in the U.K. that have been permanently shut down. Mr. Brown obtains his smaller number of five by neglecting to count reactors shut down more than nine years ago, and he further minimizes the loss of nuclear capacity by adding a reactor whose construction was too far along to cancel by the time a free market in power arrived in the U.K.

When competition came to the U.K.’s power sector, the efficiency of the already-built nuclear reactors improved impressively — this was one of the many benefits of deregulation. But the chief benefit of the U.K.’s deregulation was in exposing the colossal cost of building new nuclear power plants, thus ending the nuclear industry’s dreams of never-ending expansion. As the London Observer wrote in an editorial titled “Nuclear fantasy” that appeared Nov. 12, 1989, on the eve of deregulation:

“It has taken the cold stare of the City [London’s financial district] to penetrate the veils of secrecy and deceit that have long enveloped the nuclear industry.

“Privatization has proved that nuclear power is hopelessly uneconomic and saddled with decommissioning costs that no private company could accept without huge guarantees from the Government. Yet, from the 1950s to a few months ago, anyone who breathed the slightest doubt about its viability was met with a blizzard of faulty figures and downright lies.”

In Ontario, because we do not yet have privatization and deregulation, money-losing Crown-owned companies such as Mr. Brown’s AECL — which has never sold a reactor to any Western democracy — remain free to maintain the fiction, against all evidence, that nuclear power retains a bright future. The London Observer’s advice for Britain in 1989 applies equally well to Canada today, where Ontario’s unreliable reactors threaten the province with blackouts: “Had the truth been known long ago, Britain’s energy policy would not now lie in ruins. For decades, the promotion of energy conservation and research into clean sources of energy has been neglected, while money was poured in its hundreds of millions down the nuclear drain … The country should construct an energy policy based on the real world, rather than a nuclear fantasy.”

No deregulated energy system anywhere in the world has chosen to build nuclear reactors, and for good reason. The last 20 U.S. reactors took many years to build — typically more than a decade — and cost US$3-billion to US$4- billion each, or about US$3,000 to US$4,000 per kilowatt of capacity. In comparison, new high-efficient gas plants using jet-engine technologies — the choice of today’s free markets — are built in 12 to 18 months and come in at US$400 to US$600 per kilowatt. Wind turbines now come in at about US$1,000. In a free market economy, or one that strives for energy security, there is simply no room for nuclear power.

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