Lawrence Solomon
National Post
September 29, 2006

‘If we don’t go nuclear, what type of energy will meet our future energy needs,” I’m often asked. “Do you think fringe fuels such as solar energy can take the place of nuclear? Or windmills? Bio fuels? Small dams? Tidal power? Burning garbage?”

My answer is “all of the above.” It rarely satisfies my questioner, who thinks I’m evading the question; neither does the question, which reflects a historical one-size fits-all bias, sit well with me.

For the last century, in most of the developed world, the only providers of power have been government-backed monopolies, both public and private. Being monopolies, they didn’t need to worry unduly about pleasing either their customers or their suppliers. Their primary concern was pleasing themselves.

Convenience ruled. When Ontario Hydro tired of managing its small hydro dams around the province, it dynamited or otherwise decommissioned hundreds of them. The far-flung dams were a hassle to run from afar, and also administratively expensive to manage from its Toronto head office. Hydro favoured big, centralized coal plants then, just as it would later favour big, centralized nuclear plants.

Likewise, other utilities in other parts of the continent closed down the windmills that once were common, and squelched independent power producers small and large who wanted to bring power to market. Among the larger concerns that they squelched was Fiat, the automotive giant, which in the 1980s manufactured home power plants able to run on any liquid or gaseous fuel.

The central planners at the state monopolies favoured a few large central generating plants over countless small ones, for administrative ease. Yet electricity production is inherently decentralized; different regions have different fuels at the ready, different industries have different power wants and, often, power-producing abilities of their own. The monopolies have had great success in suppressing decentralized power systems. But despite the restraints, small-scale power plants remained so attractive that they not only survived, they thrived, gaining market share against their heavily subsidized nuclear competitor.

Add up all the output from the world’s small-scale power plants and you find that they now total more than the world’s output from nuclear reactors. You also find that they are growing faster than nuclear plants – in 2004, they added about three times as much output, and six times as much generating capacity, as nuclear power added to the world’s electricity systems.

The gap will only increase in future. According to estimates from official bodies such as the International Energy Agency and World Nuclear Association, compiled by Amory Lovins at the Rocky Mountain Institute, within five years new nuclear additions will be dwarfed by any number of small-scale power technologies, including solar photovoltaics (the same technology that powers calculators). Small-scale cogeneration and wind power, which are becoming large players in the world electricity market, will each provide 20 to 30 times as much new capacity as nuclear plants.

In many countries, small-scale power plants have already made their presence felt big time. They now provide half of the electricity generated in Denmark, almost 40% of the generation in the Netherlands and Finland, 30% of Russia’s and between 15% and 20% of the electricity generated in Germany, Japan, Poland and China. Most remarkably, these large market shares came about despite resistance from the power monopolies: Some of them are token projects, built by the monopoly to preempt private competitors who were seeking permission to enter the electricity business, or in response to public pressure; some are public-private partnerships that had to surmount monopoly opposition; and some of them aren’t utility projects at all, but free-market power plants developed by businesses capitalizing on cost-saving opportunities to provide power for their own needs.

While many of the monopoly-built plants required subsidies, many more were economical yet rejected by the monopoly. Without the monopoly utility deciding who can produce power and who can’t, small-scale private producers would dominate the marketplace. Large buildings and shopping centres would routinely be generating their own power, just as they now produce their own heat. Just about the only technology that wouldn’t have a future in a de-monopolized, de-subsidized power system would be nuclear power.

Lawrence Solomon, author of the forthcoming book Toronto Sprawls, is executive director of Urban Renaissance Institute and Consumer Policy Institute, divisions of Energy Probe Research Foundation.; www.urban-renaissance.org.