In a market economy, private investors are the ultimate arbiters
of which energy technologies can compete and yield reliable profits,
so to understand nuclear power’s prospects, just follow the
money. Private investors have flatly rejected nuclear power, but
enthusiastically bought its main supply-side competitors—decentralized
cogeneration and renewables. Worldwide, by the end of 2004, these
supposedly inadequate alternatives (see inset: Gales of Change)
had more installed capacity than nuclear power, produced 92 percent
as much electricity, and were growing 5.9 times faster and accelerating,
while nuclear power was fading.
The world’s nuclear-plant vendors have never made money,
and their few billion dollars of dwindling annual revenue hardly
qualifies them any more as a serious global business. In contrast,
the renewable power industry earns $23 billion a year by adding
12 gigawatts of capacity every year: In 2004, eight gigawatts of
wind; three gigawatts of geothermal, small hydro, biomass and wastes;
and one gigawatt of photovoltaics (69 percent of nuclear’s
2004 new construction starts, which photovoltaics should surpass
this year). Photovoltaics (PV) and windpower markets, respectively
doubling about every two and three years, are expected to make
renewable power a $35-billion business within eight years. And
distributed, fossil-fueled cogeneration of heat and power added
a further 15 gigawatts in 2004; it does release carbon, but 30
percent less than the separate boilers and power plants it replaces,
or up to 80 percent less with fuel switching.
Windpower’s 50-plus gigawatts of global capacity—half
of U.S. nuclear power capacity—paused in 2004 due to Congressional
wrangling, but is expected to triple in the next four years, mainly
in Europe, which aims to get 22 percent of its electricity from
renewables by 2010. One-fifth of Denmark’s power now comes
from wind; German and Spanish windpower are each adding as much
capacity each year (two gigawatts) than the global nuclear industry
is annually adding on average during 2000–2010. No country
has had or expects to have economic or technical obstacles to continuing
major wind expansion. The International Energy Agency forecasted
in 2003 that in 2010, wind could add nine times as much capacity
as nuclear added in 2004, or 84 times its planned 2010 addition.
Eight years hence, just wind plus industry-forecast PVs could surpass
installed global nuclear capacity. The market increasingly resembles
a 1995 Shell scenario with half of global energy, and virtually
all growth, coming from renewables by mid-century—about what
it would take, with conservative efficiency gains, to stabilize
atmospheric carbon.
Whenever nuclear power’s competitors (even just on the supply
side) were allowed to compete fairly, they’ve far outpaced
central stations. Just during 1982–1985, California utilities
acquired and/or were firmly offered enough cost-effective savings
and decentralized supplies to meet all demand with no central fossil-fueled
or nuclear plants. (Alas, before the cheaper alternatives could
displace all those plants—and thus avert the 2000 power crisis—state
regulators, spooked by success, halted the bidding.)
Today’s nonnuclear technologies are far better and cheaper.
They’re batting a thousand in the more competitive and transparent
processes that have swept most market economies’ electricity
sectors, and are emerging even in China and Russia. A few Stalinist
economies like North Korea, Zimbabwe and Belarus still offer ideal
conditions for nuclear sales, but they won’t order much,
and you wouldn’t want to live there.
No wonder the world’s universities have dissolved or reorganized
nearly all of their nuclear engineering departments, and none still
attracts top students—another portent that the business will
continue to fall, as Nobel physicist Hannes Alfvén warned, “into
ever less competent hands,” buying ever less solution to
any unresolved problem than in the days of the pioneers. Their
intentions were worthy, their efforts immense, but their hopes
of abundant and affordable nuclear energy failed in the marketplace.
In 2004, decentralized cogeneration and renewables, excluding big
hydro dams (any over 10 megawatts), added 5.9 times as much worldwide
net capacity as nuclear power added, and raised annual electricity
production 2.9 times as much as nuclear power did. By the end of
2004, these decentralized, nonnuclear competitors’ global
installed capacity totaled 411 gigawatts*—12 percent more
capacity than global nuclear plants’ 366 gigawatts—and
produced 92 percent as much electricity. Thus the “minor” alternative
sources actually overtook nuclear’s global capacity in 2003,
rivaled its 2004 and will match its 2005 output, and should exceed
its 2010 output by 43 percent. They already dwarf its annual growth.
Official and industry forecasts indicate they’ll add 177
times as much capacity in 2010 as dwindling nuclear power will.
And they’re dwarfed in turn by demand-side opportunities,
not graphed here because reliable global implementation data aren’t
available. So the big question about nuclear “revival” isn’t
just who’d pay for such a turkey, but also, why bother? Why
keep on distorting markets and biasing choices to divert scarce
resources from the winners to the loser—a far slower, costlier,
harder and riskier niche product—and paying a premium to
incur its many problems? Nuclear advocates try to reverse the burden
of proof by claiming it’s the portfolio of non-nuclear alternatives
that has an unacceptably greater risk of non-adoption, but actual
market behavior suggests otherwise.
*About 266 gigawatts of mostly gas-fired decentralized cogeneration
(emitting 30–80 percent less CO2, depending on fuel), 47
gigawatts of wind, 47 small hydro, 37 biomass and waste, 10 geothermal,
and 4 photovoltaics.
Amory Lovins is cofounder and CEO of Rocky Mountain Institute.
A consultant experimental physicist educated at Harvard and Oxford,
he has advised the energy and other industries for more than 30
years, as well as the U.S. Departments of Energy and Defense. Lovins
co-authored the recently released book Winning the Oil Endgame:
Innovation for Profits, Jobs, and Security (Rocky Mountain Institute,
2005). |
