Thursday, July 28, 2005

'New Math' and the New Economics Foundation

Recently, the New Economics Foundation, published a study examining energy choices in an age of global warming. But when you take a closer look at the study and its methodology, it's easy to surmise that the authors already knew what their conclusions would be before they ever started crunching the numbers.

Here’s NEF’s summary of nuclear in the study:

Nuclear power is being promoted as the answer to climate change and energy insecurity. But, as a response to global warming, it is too slow, too expensive and too limited. And in an age of terrorist threats, it is more of a security risk than a solution. Instead, the characteristics of a flexible, safe, secure and climate friendly energy supply system apply to renewable energy. In comparison, it leaves no toxic legacy and is abundant and cheap to harvest both in the UK and globally.
Let's start with the assertion that nuclear is “too slow, too expensive and too limited” to help battle climate change. The study states on page 35:
The PIU [Performance and Innovation Unit] suggests a planning/construction period in the order of a decade for each nuclear plant – a figure that may prove optimistic in the light of the controversy of planning applications and past experience of delays in construction.
It's clear that estimate is based on the experience in the U.S. post-Three Mile Island when anti-nuclear activists used the legal system as a weapon against new plant construction. Today, with a streamlined review process in place at the NRC (the breakout of the Early Site Permit: ESP and the Combined Construction and Operating License: COL), the US nuclear industry estimates that five years is a more accurate estimate -- especially when looking at current construction timetables in Asia.

Now let's turn to the issue of whether nuclear capacity can be built quickly enough to effect climate change:
The earliest that new nuclear capacity could be introduced means it can’t tackle climate change. Twenty years was considered to be the earliest that a new generation of nuclear reactors of this type could be introduced, whereas the scientific community say that action to reduce greenhouse gas emissions is urgent with the next decade.
So renewables (what NEF offers as the solution) need to come to the rescue within the next decade to save us from disaster. However, we know that nuclear energy avoids more emissions than all sources of renewable energy in the U.S. combined.

Yet renewables, which account for only a quarter of the emission free electricity in the US are expected to scale up electrical production so quickly, that they'll be able to save the world in just a decade. It's also important to note that the vast majority of renewable capacity is actually hydropower, a type of renewable energy that may very well have reached its practical limit.

The simple fact is that electricity demand will increase so quickly -- as much as 50 percent in the U.S. over the next 20 years -- that we're going to need to rely on each and every source of energy in order to keep up. That's why it has always been the position of the Nuclear Energy Institute that nuclear energy needs to be a part of a diverse energy portfolio.

Once again, we see anti-nuclear extremists creating the same old straw man, and setting up the same old false choice: That the world needs to choose between nuclear energy and renewables. But any serious observer of the energy business knows that we're going to need nuclear energy, renewables and other sources of energy like clean coal if we're going to both protect the environment and spur economic growth at home and internationally.

Now let’s turn to the issue of expense, an area where this "radical think tank" uses a radical and unsupported methodology to massage the figures.

The costs presented in the study primarily cite data from the U.K.'s Performance and Innovation Unit. This group (aka the Strategy Unit) conducted an energy review back in 2002 to help the UK policymakers frame map out that nation's future energy infrastructure. As I scrolled to the bottom of the page of the energy review, I found a table on what the estimated costs of every fuel are in 2020. According to these figures, nuclear will be competitive with every other fuel source.

Which leads us to my biggest beef with the NEF study. The NEF uses the numbers from the PIU to put in their own table on page 39. But what they then do is create their own estimate of what nuclear really costs, and refuse to apply the same econometric model to any other fuel -- including renewables.

In other words, the study picks the worst case scenario for nuclear and the best case scenario for renewables. In serious economic research circles that's fundamentally dishonest, and not a sound basis for guiding international energy and climate change policy.

Here’s a lesson from Data 101 that every freshman economics student understands: Stick to one and only one source when talking about the same data! For the study to be fair, the same methodology used for nuclear should apply to all other energy sources. Doing anything else is just a bald attempt to massage the numbers and decieve people who don't take a close look at how the study has been conducted.

Now for the last part of the sentence with nuclear being “too limited.” This is the best.
Given current nuclear output one estimate from a body representing the renewables industry suggests that uranium reserves will be depleted in around four decades.

That body is the World Council for Renewable Energy -- and you know they would never be biased against nuclear energy. Now check out this quote:

Uranium is plentiful, easy and cheap to store, and likely to remain cheap. This means that nuclear power is essentially an indigenous form of energy.

Guess who stated this? The aforementioned PIU! It's in their energy review. Find it by scrolling down to the nuclear section. While reviewing the study, the NEF used so much data from the PIU analysis that I often got the two mixed up. But when it came to uranium supply, PIU references were nowhere to be found.

I guess a reference source like the PIU is only good when it is in favor of the technology one is promoting. If people really want to know what the “Energy choices in an age of global warming” are, they should look at PIU’s The Energy Review, and not bother with willful distortions of their findings and conclusions.

Back in the 1960s, it became vogue in education circles to promote "New Math" as an improved method to teach elementary school children. Ultimately, it was junked when it became clear that the new methods came at the cost of teaching important basic computational skills.

Anyone who reads the NEF study ought to keep the ill-fated experiment with "New Math" in mind, as any college student who attempted to replicate its methodolgy would soon find themselves booted from the Econ program and back into liberal arts.

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2 comments:

DV8 2XL said...

" It's also important to note that the vast majority of renewable capacity is actually hydropower, a type of renewable energy that may very well have reached its practical limit."

It may come as surprise to some that there is still a significant amount of undeveloped traditional hydro potential left in North America. The National Hydropower Association (U.S.) river basin studies show a potential of 73,200 MW of additional U.S. hydroelectric capacity in 5,677 undeveloped sites. The situation is the same for Canada, including the Far North where eight major rivers draining into the Artic Ocean are considered ripe for exploitation. Of course this is emphasizing engineering feasibility and some economic analysis, but no environmental considerations. Despite the widespread belief that hydro is the ideal clean source of renewable energy the bald fact is that it is hugely destructive to local environments and can and does create disruptions to the hydrology of an area several orders of magnitude greater.

As a consequence the process of approving a new major hydro project is as onerous, if not more so, than approving a new thermonuclear plant.

Jim Hopf said...

Concerning the cost comparison between nuclear and renewables, the following article may be of interest:

http://www.energycentral.com/centers/news/daily/article.cfm?aid=5828553

It basically says that wind power is not coming on line fast enough to meet the mandatory generation percentage target. As a result, the cost of renewable energy credits (ROCs) have reached 40 pounds/MWh (~7 US cents/kW-hr). Thus, apparently "cheap" wind power requires a full, 7 cent/kW-hr subsidy. If you want to generate a significant fraction (~20%) of your power with it, any way. Imagine if nuclear were included in the ROC market!

As for uranium supplies, this will simply never be an issue, and will never measurably constrain the growth, or longevity, of nuclear. My thoughts on this are outlined at:

http://www.americanenergyindependence.com/uranium.html