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JG:
What is the status of nuclear power in comparison to other forms of energy production?

AL:
Micropower has already walloped nuclear in the marketplace worldwide. In 2004, micropower—combined-heat-and-power plus decentralized renewable sources—added three times as much output and six times as much capacity as nuclear added, because it costs less and has much lower financial risk. In 2010, the respective industries expect these competitors to add about 160 times as much capacity as nuclear power adds. (These are the latest firm data, but are consistent with the 2005 data now coming in.) So the small, fast winners are financed by private capital, while the only buyers for nuclear plants worldwide are central planners. I don’t think people who claim to be proponents of liberalized markets and conservative politics should have any interest in what central planners choose in places like Communist China. Rather, they should pay attention to what free markets are choosing, which is quite the opposite.

This is also important for climate protection, because if climate is a problem, we need the most solution per dollar and the most solution per year. So if you buy a new reactor—about the most expensive option—you get much less solution (such as coal displacement) per dollar than if you bought micropower or, even cheaper, end-use efficiency. Those would give you roughly two to ten times more climate solution per dollar and would also do so faster. They have greater ultimate potential. They are more reliable and resilient. And they are much more benign and politically acceptable. So on all counts, those are the most prudent solutions.

JG:
You have made comments that make it sound as if nuclear is falling out of favour and yet they are now discussing a $40 billion CAD investment into nuclear here in Ontario and further expansion throughout the US.

AL:
Who is ‘they’? In the case of Ontario it is the provincial government, which under your legal system can have about as many reactors as the government is willing to pay for. But I don’t think you will find private capitalists wanting to put their money at risk in such a venture subject to competition in the marketplace.

You said the mysterious ‘they’ intend to invest a lot of money in nuclear power in the US. Let me disabuse you of that idea. The only market actors professing any enthusiasm for new nuclear build are those who get transactional rewards—but none of those who would put their own capital at risk. In fact, the latest Nucleonics Week has a rather discouraging write-up worldwide on investors’ view of the prospects for nuclear revival. To be sure, the Bush Administration and a majority of the Congress have just given more than $13 billion USD of new subsidies to nuclear—about big enough to pay the entire capital cost of the next six plants to be built, if any. However, Standard & Poor’s then published two reports saying this would not materially improve the builders’ credit ratings, because most of the risks the market is concerned about are still there. I concur. The new US subsidies will have the same effect as defibrillating a corpse: it will jump, but it won’t revive.

Nuclear power has died of an incurable attack of market forces and is way beyond any hope of revival, because the competitors are several fold cheaper and are getting rapidly more so. The competitors I mean are not other central power stations (coal or gas-fired, or big hydro); rather, they’re micropower and efficiency—the big market winners, already bigger than nuclear power worldwide in both capacity and output.

JG:
Critics feel that should nuclear power play a major role in Ontario’s future energy mix, this will lead to various problems (i.e. financial, environmental).

AL:
They’ll hit the wall financially long before that happens, and then they will have to do something more sensible.

JG:
Ontario is already experiencing financial issues and cannot afford to wait to hit the wall.