Rio Tinto’s great big nuclear delusion

Rio Tinto energy chief Harry Kenyon-Slaney's faith in nuclear ignores the latest industry disaster stories out of Japan, China, the EU and US - and wind and solar's far greater cost-potentials.

Rio Tinto’s energy chief, quoted in The Australian Financial Review article this month 'The burning question of coal', believes “there will be a return to nuclear” and that China will lead it, stating that a joint venture has “quietly developed” between China’s state nuclear technology company and the Toshiba Westinghouse Corporation”.  

The problem is that that consortium hasn’t produced a third-generation nuclear reactor. In fact, nobody has and all the so-called Gen III-plus reactors under construction globally are behind schedule and over budget – including those in China. 

Kenyon-Slaney is living in hope as Rio is invested so heavily in uranium – a mineral which peaked in 2005, well before Germany decided to exit nuclear and Japan idled their entire reactor fleet.

It would be comical if it wasn’t so serious, but Kenyon-Slaney’s nuclear industry just can’t put a foot right. Delays are mounting up in the west, and OECD countries and huge resources are being spent keeping old ageing reactors online. The expenditure that could be better directed is immense.

As a well-known supporter of serious action on climate change, including decarbonisation of all sectors, I have on numerous occasions written about nuclear energy. Following those articles, supporters of nuclear energy have often asked, if I’m serious about climate change, why would I oppose nuclear (a low emissions source of electricity)? In this column I’ll answer that question. But, first I’ll give an update on a few of the latest nuclear industry disaster stories from around the globe.

Japan

The Fukushima disaster clean-up bill will now exceed $112 billion*.

Another problem is the failed plan to construct an underground ice wall to stop radioactive water from flowing into the Pacific Ocean – Tokyo Electric Power has all but admitted it’s a complete failure.

Elsewhere at the Fukushima site, another reactor that wasn’t destroyed during the earthquake-tsunami had a leak in its spent fuel rod pool, which almost spiralled out of control, which would have created yet another calamity.

Broad public support for restarts is non-existent across Japan – even the country’s first lady, the wife of the pro-nuclear Prime Minister has come out against further use of the technology. In order to rally public support some proposals have been floated, including retiring the oldest 25 per cent (14 units) of reactors – or even as much as 33 per cent (16 units) – to try and convince the public that government and regulators are taking safety seriously. Measures like this are unlikely to sway public sentiment.

The direct cost of importing fuel to substitute for the lost production from Japan’s nuclear reactors is estimated to be about $38 billion per year, while some analysts have put the entire trade deficit, now running at $120 billion, down to direct and indirect costs of having the reactors shutdown. Additionally, in 2012 Japan abandoned its fast breeder reactor program after wasting $13 billion dollars on it since 1984. 

Europe

Europe’s nuclear industry is struggling. Many reactors are currently off-line for much longer periods than scheduled, Germany and Switzerland are phasing out their reactors and most countries –including Spain, Austria, Sweden and Italy – won’t be building any reactors.

Areva, the world’s biggest builder of nuclear along with French utility EDF, can’t deliver on a new reactor project. Reactors under construction at Flamanville, France and Olkiluoto in Finland are years behind schedule and billions over budget. In the last couple of weeks, Areva has admitted that the Finnish project, originally planned to be online and delivering electricity in 2008, will now be delayed until late 2018. This is another way of saying 2019, 2020 or ... never. 

United States

All four nuclear reactors being constructed in the US are suffering costly delays. The reactors rated at 990MWe (2100MWe gross) under construction in Georgia and South Carolina were supposed to begin power generation in 2016. These four reactors are reported to cost $28 billion. Georgia Power says that “it remains cheaper to finish building the nuclear plant than to stop and instead build gas-fired power plant”, meaning that it would have been far better for consumers if they never started in the first place. 

The US reactor building delays are being downplayed but, as we know from previous experience, once builders/authorities announce one delay you can be sure that they will follow with many more. In South Carolina ratepayers are already paying more than 20 per cent of their bill for electricity from nuclear power plants that don’t even yet exist.

In the meantime, a number of nuclear plants have been shuttered due to failures including serious radioactive leaks, or inability to compete with renewables in the US wholesale electricity market.

China

The central government had ambitious plans to build a significant amount of nuclear power plants, but since Fukushima their local Gen II designs being used on every project have been scrapped for future projects, and Gen III designs. These Gen IIIs have never been built anywhere, and are the only acceptable options for future projects. And here’s the problem: just like in France, Finland, Georgia and South Carolina, China’s projects are significantly over budget and behind schedule, adding millions of dollars of cost for every additional day without power generation. Back in 2010, China claimed that it would build 80GW of new nuclear by 2020, but the reality is it is likely to add just 20GW, around 75 per cent short of their target.

So why should we be against nuclear?

If the post-Fukushima Japan reactor shutdown delivers an accrued trade deficit over four years of ~$400 billion, as reported, and the clean-up is to cost $100 billion, then that $500 billion alone would have delivered a 100 per cent renewable Japan. Indeed $500 billion would buy 250GW of wind at today’s prices, but due to the massive scale of cash into the sector it would drive learning, scaling, and innovation to deliver in excess of 500GW – or 1½ times the wind energy capacity to provide the equivalent of all of Japan’s electricity.

And it would be similar for solar, where learning rates and reduction in costs – including balance-of-plant costs – are even greater with scale. At today’s prices $500 billion would buy 310GW of solar PV; enough to provide a third of Japan’s electricity. Taking into account continued and accelerated cost reductions in technology, such capital injections would lead to twice or thrice that figure –enough to more than power the entire needs of the Asian superpower.

So, if we want cheap and resilient power sooner, faster and as a viable opportunity for all people in all nations, then it is with renewables. But by taking a diversionary path to expensive options like nuclear we are delaying the point at which we inevitably achieve cheap renewables that can be deployed anywhere by anyone. 

So put simply, if the extraordinary amounts of money spent on the nuclear fuel cycle were redirected to renewables we would get a lot more electricity generated for every dollar invested.

*All figure are in Australian dollars. 

Matthew Wright is executive director of Zero Emissions Australia and a resident columnist at Climate Spectator.

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