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Hillary Clinton Advances Nuclear Sales to India

It was announced today, July 21, that India has promised the visiting U.S. secretary of state that two nuclear power plant sites will be reserved exclusively for U.S. bidders. It’s the payoff resulting from the immensely controversial U.S.-India nuclear deal that was finalized during the final year of George W. Bush’s administration, ending decades of nuclear embargo. And as such it’s being hailed as a small victory for U.S. diplomacy and an opportunity for hard-pressed U.S. business. Yet it’s a strange world in which a country, described until just the day before yesterday as a defiant nuclear outcast, suddenly is being welcomed into a nuclear club in which few restrictions apply.

Consider the history: following a nuclear weapons test in 1974, which the Indians disingenuously characterized as the demonstration of a "peaceful nuclear explosive" (as if such radioactive bombs were going to be used in civil engineering projects), nuclear suppliers strictly limited sales to India; India had used material in the test that had been produced in a Canada-supplied reactor, circumventing international safeguards. During the next decades, India refrained from further testing but also refused to endorse the principle of non-proliferation on grounds that it "disarmed the armed while leaving the unarmed free to keep arming." Why, asked Indian nuclear strategists, taking their cues from French theorists, would an Indian nuclear bomb increase the risk of war when, as all could see, U.S. and Soviet nuclear arsenals were deterring the two superpowers from going to war?

In the aftermath of the Indian and Pakistani nuclear tests of 1998, which resulted in both countries' openly becoming nuclear weapons states, efforts to maintain restrictions on nuclear trade with India gradually lost steam. Naturally companies that stood to make sales to India urged their governments to lift restrictions: they made that argument loud and clear, and it was hard to resist. But there was also a second argument, hardly if ever made explicitly, but perhaps in the back of some policymakers' minds--an argument not considered respectable in the United States during the previous decades, but now quietly gaining ground.

During the 24 years separating the first and second Indian tests--years in which, by the way, opportunities to keep the subcontinent nuclear-free were squandered--nobody in the United States wanted to indulge India's notion that possession of nuclear weapons would make the world more peaceful, not more violent. Pushed to its logical limit, a world in which every Tom, Dick or Harry had a nuclear arsenal, the idea seemed utterly insane. But ask yourself, confining your attention to the subcontinent, whether war between Pakistan and India is more or less likely now that both have nuclear arsenals. To judge from many recent events, notably the way both countries handled the terrorist attack in Mumbai last year, the honest answer would seem to be that their going nuclear has reduced the likelihood of war between them.

To look ahead, will the Iran story play out along essentially the same lines? Once it has acquired all the wherewithal needed to make an atomic bomb and actually makes one, will Israel then come out of the closet and openly declare itself a nuclear weapons state too? Will war between Israel and Iran then become absolutely unthinkable? And will that soon imply that U.S. companies can sell Iran anything they want?

 

 

Immelt ist Verschimmelt

To borrow a Yiddish expression with roots in German, the CEO of General Electric is confused. Writing in the July 9 issue of the Financial Times, Jeffrey Immelt argues that the U.S. government should adopt “an industrial strategy built around helping companies to succeed with investment that will drive innovation and support high-technology manufacturing and exports.”  Immelt seems to have forgotten that the U.S. government has already adopted that strategy: the stimulus bill provides more than 10 billion dollars in funding and loan guarantees for smart grid and green technology (among other things), of which GE undoubtedly will be the Number One beneficiary.

Not bothering to acknowledge that, Immelt proceeds to argue that the U.S. government should also subsidize companies like GE not just to make U.S. workers more competitive globally but also to make its workers in China, India and UK (to name the countries he happens to name) more competitive. In other words, the U.S. government should pay General Electric to undermine the fundamental objective of the stimulus bill and other economic legislation, which is to improve U.S. competitiveness vis-a-vis other countries, not reduce it.

Either Immelt is verschimmelt or, even by the standards of corporate barons, he has a lot of chutzpah.

 

ExxonMobil and Venter Team Up to Develop Algal Biofuels

At the beginning of 2007, at a conference in La Jolla, Calif., dedicated to biotechnology and biofuels, I was privileged to hear a banquet address by C. Craig Venter, the biotechnologist who cracked the human genome, beating the U.S. government. He made, I felt, a highly schizoid impression: on the one hand, charismatic, all-encompassing, omniscient; on the other . . . megalomaniacal mad scientist.

Perhaps ExxonMobil executives have been mulling over similar impressions, as they contemplate the potential of biofuels and biotechnology. But this week, as  the fortieth anniversary of the moon landing approaches, the company announced it is partnering with Venter’s Synthetic Genomics to develop liquid fuels from bioengineered algae. The $600 million that ExxonMobil is investing may be but a pittance for a company that earned $45 billion last year, but if Venter turns out to be of sound mind and delivers on his promises, this may someday be seen as another huge leap for humankind.

A Decentralized Model for U.S. Nuclear Waste Management

Writing in today’s issue of Science magazine, two well-respected academic experts propose a new national strategy for U.S. nuclear waste disposal. Drawing lessons from the 22-year failed effort to establish a permanent geologic repository at Yucca Mountain in Nevada, Rodney  Ewing (Michigan) and Frank von Hippel (Princeton) say it was an obvious mistake to try to force the facility down the throats of unwilling Nevadans. They also declare unfortunate the very long time it took the Environmental Protection Agency  to produce an environmental assessment, and the fact that the assessment was site-specific rather than generic to any proposed nuclear waste repository.

Taking cues from more successful planning for permanent nuclear waste disposal in Sweden, Finland, and France, Ewing and von Hippel propose that U.S. disposal policy should be regionalized. States in which nuclear power plants operate should develop their own permanent disposal plans, perhaps in combination with each other and perhaps in line with the Nuclear Regulatory Commission’s zones. EPA should formulate generic performance standards suitable for any facility.

Pickens Pares Plan

It came as little surprise this week when Pickens announced he would have to cut back plans for what was to be the world’s largest wind farm, a 4 GW plantation in Texas. With capital costs high and financiers jittery, Pickens was having a hard time getting the new transmission built that the farm would require. And, ironically, with natural gas prices sharply down and utilities relying more on gas to generate electricity, demand for additional wind capacity has drifted into the doldrums. But although this week's announcement may have been a foregone conclusion, it’s a suitable time to take stock of the Pickens Plan, the idea of ramping up wind generation to produce electricity and use the natural gas freed up by the additional wind capacity to power motor vehicles.

Obviously the  Pickens Plan is highly self-interested--the Texan owns the nation’s biggest network of natural gas filling stations and has huge stakes in gas distribution generally. Nevertheless,  when the plan was first unveiled last year, I advised readers that if they had to choose between just it and Al Gore’s latest ideas, they should go with the T Boone. The estimable Vaclav Smil, writing more recently, agrees: at least, as the University of Manitoba environmental scientist and energy expert observes, the Pickens plan is doable in principle. (Gore’s plan is “utterly unrealistic.”)

Taking stock in the pages of a Yale University environmental website, Smil likes the Pickens Plan’s “cascading simplicity" but worries about it "sheer grandiosity." Taken literally, it would require the country in very short order to go from having perhaps 200,000 vehicles fueled by natural gas to having tens of millions, with all that implies. At the same time, the country would have to build maybe 40,000 miles of new transmission lines to carry electricity from the Dakotas, Nebraska, Kansas, Oklahoma, and Texas to its industrial heartlands, though in each of the two most recent decades we have added less than 10,000 miles.

My fundamental concern is different. Though I agree with Pickens that we can and should sharply increase wind generation, I believe we should also ramp up natural gas production and imports and use the extra gas to replace coal generation of electricity, not primarily to power motor vehicles. Per unit energy, replacing coal with gas produces much larger dividends in terms of carbon reduction than  replacing oil with gas.

Broadly speaking, If our fundamental objective is to reduce dependence on unreliable foreign oil suppliers, then the Pickens approach makes sense. But in fact, contrary to widely held preconceptions, though the United States imports most of its oil, only a small fraction comes from the volatile Middle East.  As I see it, climate change--not oil dependence--is the most urgent problem facing us and the world. Though volatile oil prices have been a very serious problem, the answer to that is simple, clear, and not new: tax up the oil price to some predetermined level, and keep it there. 

 

 

 

 

 

Doubts Cast on Nuclear Renaissance

Quite a number of recent developments in the nuclear industry, most notably big cost overruns and delays on a Finnish reactor being built by France's Areva, have called into question whether a widely anticipated "nuclear renaissance" is really going to happen. As discussed here and elsewhere, rising construction and financing costs have meant that new reactor projects can get underway only with big government subsidies or pre-construction electricity rate increases. Because of uncertainties about when and how such support will actually materialize, Moody's Investor Services has cautioned potential investors in nuclear projects that risks may not be adequately taken into account. Even though Moody's believes that reactors may well be financially viable once operating, observes University of Vermont economist Mark Cooper, problems with permitting and financing may make it difficult or impossible to get nuclear power plants up and running in the first place.

Cooper is the author of a recent report "The Consumer Economics of Nuclear Reactors: Renaissance or Ripoff?", in which he highlights a fourfold increase in reactor construction costs in the last decade, which is uncomfortably reminiscent of the seven-fold increase seen in the first generation of nuclear construction. What's particularly troubling about the development--though this is a point Cooper does not explicitly make--is that the cost runups in the first generation are often attributed to radically tightened safety regulation and retrofit requirements after the 1979 Three Mile Island accident; in the last decade, no such event is available to explain why costs have gone up so much. On the contrary, the industry was supposed to have learned how to build plants in a more standardized manner, at more predictable costs.

Cooper argues that even if, in the future, it's made much more costly to emit carbon, nuclear reactors will not become a significantly greater part of our energy supply if decisions are made on a least-cost basis. Specifically, the nuclear option will remain for decades to come more expensive than efficiency, cogeneration, geothermal, biomass, landfill, onshore wind, and natural gas (though not coal with carbon capture or, possibly, photovoltaics).

There may, in a sense, be less to this argument than meets the eye. All serious students of the subject agree that energy efficiency is the cheapest and fastest way to address energy shortages and cut emissions: the best kind of new watts are what Amory Lovins has dubbed "negawatts." With the proper price incentives and regulatory requirements, greater energy efficiency ought to make it possible for us to keep total energy consumption at current levels. But if we want, beyond that, to reduce reliance on coal and oil, what are we going to use in their place? The only obvious candidates at present are natural gas, nuclear, and thermal solar--regardless of how expensive they may be relative to one another on average. Not any one of them will be best in every situation, but every one will have its niche.

Nonetheless, Cooper provides a compelling and disturbing analysis of the challenges the nuclear industry will have to surmount if nuclear is to become a bigger player or, in the long run, be a player at all. His lucid account of overnight, all-in, and busbar cost accounting is, by itself, worth the time it takes to download his report.

Setting the Record Straight on FutureGen and IGCC

Gregg Easterbrook is a well-regarded environmental writer and a long-term contributor to the ultra-prestigious Atlantic Monthly. But I hope he never is the one to decide whether I get my next job or publication, because I'm about to correct two mistakes he makes in today’s New York Times. In “The Dirty War Against Clean Coal,” Easterbrook takes the Energy Department to task for resuscitating FutureGen, its futuristic clean-coal project. “This is part of a Washington tradition,” says Easterbrook, ”beginning pie-in-the-sky projects that create an excuse to avoid forms of conservation and greenhouse-gas reduction that are possible immediately. Companies including General Electric have alrady perfected technology to reduce emissions substantially, called 'integrated gasification combined cycle' [IGCC] power."

In other words, instead of going for an unproved new technology, the Department of Energy should stick with IGCC. But there's a problem here. FutureGen IS an IGCC plant and always has been so visualized. (In addition to gasifying coal, it would separate and capture all carbon and permanently store it away.)

There’s another problem. “The first commercial gasification power plant, designed by General Electric for Duke Energy, is being build in Indiana,” Easterbrook continues. Actually, two IGCC plants have been operating for many years: Tampa Electric’s Polk plant near Tampa, and Duke Energy’s Wabash River plant near Terre Haute, Indiana. (We're not bragging, because it's not exactly breaking news, but both ieee tv and IEEE Spectrum visited the Polk plant two summers ago, and descriptions can be found both at IEEE TV and in Spectrum magazine.) Per watthour of electricity produced, the Polk plant's is easily the most expensive in the whole country.

As long as the record is being set straight, Easterbrook’s straw-man conclusion also is very misleading. Green power, that is to say wind and solar, “simply cannot grow fast enough to eliminate the need for coal,” he says. But nobody is talking about eliminating our need for coal. What we can do is sharply reduce our reliance on coal, and to accomplish that, we can turn not only to wind but also to nuclear and gas-generated electricity. Per watt, nuclear eliminates for all practical purposes 100 percent of greenhouse gas emissions; natural gas cuts them about 50 perent.

 

 

 

 

Setting the Record Straight on Solar and Wind Futures

A recent blog post reported on an NREL study that asked what would happen to U.S. electricity generation if the country actually reduces its greenhouse gas emissions system 80 percent by 2050: the answer was little impact on electricity prices, lots more wind, a significant about of concentrating solar system, but very little photovoltaics. Though I would prefer for the study and its author to speak for themselves, readers have raised a number of issues that deserve at least preliminary clarification.

(1) Two readers expressed disbelief that even with a carbon price of $80-100, electricity prices would rise by only a cent or two. One of them called this conclusion "laughable." Well, that is what the study found. Relying on reasonable assumptions about energy resources and costs, based largely on the Energy Department's Annual Energy Outlook (2009) and expert consensus about how prices will evolve over decades, the study found that electricity prices will go up only a cent and a half.

(2) Reacting to skepticism about NREL’s optimistic wind forecast, a reader opined that the study assumed "amortization of an installed base of wind power, economies of scale, and some learning curve." As I understand it, that's about right, and it goes not just for wind but for all the major generation sources surveyed.

The exception is for photovoltaics, where NREL injected estimates for building-integrated PV from a Union of Concerned Scientists report. NREL considered the whole future of central PV generation too uncertain to include at all.

So, what's called "Distributed PV" in the various NREL tables includes only building-integrated PV and no photovoltaic powerplant generation. That certainly flies in the face of general opinion that central PV will achieve "grid parity"—that is, it will be able to compete economically with other basic fuels in selling electricity into the grid--well before 2050. (The current expert consensus is that grid parity may be achievable in exceptionally favorable regions like southern Europe and the American Southwest by about 2015.)

(3) A reader complained that a DOE report projecting 20 percent wind by 2030 only supports a "foregone conclusion." Given the experience of countries like Germany and Denmark with wind, and the huge U.S. wind resource, that skepticism does not seem justified to me. The NREL report's pessimistic conclusion about PV, however, is indeed open to the criticism that it only confirms a built-in assumption. Solar PV is predicted to experience lesser growth than wind because NREL decided that prospects for central PV generation are so uncertain at present, nothing reasonable can be said about them. (But if that's so, why include PV in the report's model at all?)

(4) A reader complains that the costs of substituting renewable energy for existing generation are underestimates because "fixed costs have to be recovered over a reduced amount of production." Actually, many large coal and nuclear plants are fully paid for, so new renewable generation will be competing only against their operating costs, which can be quite low. (This is why Entergy and Exelon have been able to make a very profitable business out of buying up and refurbishing nuclear power plants.)

(5) The same reader's complaint about net metering is I believe better justified. Requiring utilities to buy electricity from customers at retail rates does indeed impost costs on all other customers. This is one reason why British regulatory authorities, for example, have been very hostile to net metering.

 

 

 

 

 

Experts See Big Future for Wind, More Distant Outlook for Solar

In a penetrating and provocative talk on the opening day of  an IEEE photovoltaics specialists conference, on June 8, the U.S. Department of Energy’s Samuel F. Baldwin drew attention to a recent report assessing what it will take in terms of generation to meet the country’s stated carbon reduction goals. Walter Short and Patrick Sullivan of the National Renewable Energy Laboratory modeled the U.S. electricity system to identify the main effects of cutting U.S. carbon emissions 80 percent by 2050, as the Obama administration has promised. The results are arresting. Average electricity prices increase only modestly, to 10.5 cents per kilowatt-hour from 9 cents/kWh. Carbon prices, however, range from $80 to $100, five or six times present-day trading levels.

The NREL linear programming exercise found that with carbon emissions just one-fifth of what they are now in 2050, renewables account for almost half of U.S. electricity, but most of that is wind—solar concentrators contribute a significant share, but the role of photovoltaics is still minor. As for traditional fuels, the amount of electricity generated by coal contracts sharply, by about a third, and natural gas's generation decreases appreciably; nuclear holds about steady but does not increase.

The NREL report tends to reinforce what has been an Energywise refrain--that when we talk about renewables, it's really just one renewable, namely wind. Photovoltaic electricity is further from "grid parity" than its proponents would like us to think, and even when a kind of theoretical parity is achieved, a truly big break into the market may still be years away. Pretty much the same message is found in a major report issued this week by the National Academies, “Electricity from Renewable Resources: Status, Prospects, and Impediments.”

The Academies report endorsed the view of an earlier Department of Energy study that wind could generate 20 percent of U.S. electricity by 2020, provided--it emphasizes--that transmission and distribution bottlenecks are adequately addressed. If renewables are to contribute another 20 percent of generation in the next two decades to 2040, concludes the report, wind will continue to be the main player. Solar concentrators will play a growing role, but not necessarily PV. 

 

 

 

 

Stimulus and Climate Bills Will Have Positive Impact on Jobs

Reports issued today assess the probable effects on employment of the U.S. economic stimulus bill adopted earlier this year and the climate bill that the House is expected to vote on soon. One, "The Economic Benefits of Investing in Clean Energy,” was done in partnership with the Center for American Progress; the other, "Green Prosperity," with the Natural Resources Defense Council and Green for All. University of Massachusetts economist Robert Pollin was principal investigator in both reports.

The basic findings of the two reports are that investment in clean energy will add a net 1.7 million jobs to the U.S. economy, that there will be large opportunities for low-income and less-educated people to get onto career ladders with training and better pay, and that the cost of living will be reduced for such people. The number of new jobs generated by the two bills (mainly as a result of private investment)  will be three times what we would get from the same investment in traditional fossil energy, said Bracken Hendricks of the Center for American Progress, in a press briefing today. Instead of investment funds going largely to support fossil development projects overseas, they would go to support job creation in the United States itself.

Regarding methodology, Pollin said in a press briefing today that his team relied heavily on Commerce Department industrial surveys and detailed Bureau of Labor Statistics labor market surveys, as well as government data on housing and transportation costs. For reasons explained in the reports, their estimates of job creation did not include manufacturers of energy-efficient appliances or the auto industry, said Pollin. The reports heavily emphasize energy-improving retrofits in buildings though, Pollin conceded, racially discrimination in construction hiring will remain a problem that needs to be addressed.

 

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