IEA and the Disaster of “Low Nuclear” Usage

This isn’t bad:

Nuclear energy remains vital to cope with rising energy demand, mainly in emerging economies, fight global warming and avert increased damage to the environment, the IEA warned on Wednesday.

Here’s another bit from the same Agence Presse Francais story:

The IEA also warned that global nuclear generation capacity could fall by 15.0 percent by 2035 if countries such as Germany and Belgium pressed ahead with cutting their nuclear output in the light of the nuclear accident at Fukushima in Japan in April.

This is exactly right. In a Dow Jones story, EIA even calls it a warning:

But the report's "Low Nuclear" scenario is still only a possibility, rather than a certainty, said Fatih Birol, the IEA's chief economist.

"We made the low nuclear scenario to show governments the consequences" of the policies they are considering in the wake of the Fukushima disaster, Birol told Dow Jones Newswires in an interview. It is intended as a warning, he said, without naming any particular governments.

Well, the AFP story calls out Germany and Belgium by name and the report mentions them, too, but perhaps Birol wants to be more subtle. Focusing on this is good for the nuclear energy business, but it probably sells short what the EIA report is and does.

What the EIA does is provide an Annual Energy Outlook report which presents a number of reference scenarios and cases showing what might happen over the next 25 years in the energy market given different variables. One of the variables – which is called the Low Nuclear Case – reduces nuclear energy capacity by half by 2035. And indeed, doing so has exactly the dire outcomes AFP and Dow Jones says it does.

This story from Dow Jones avoids the issue of warnings, allowing the EIA itself to say that later on:

The crisis at Japan's Fukushima atomic facility could result in a 15% fall in nuclear power capacity by 2035 if countries reconsider existing policies, the International Energy Agency said Wednesday.

This would result in increased costs for coal and gas imports for power generation and higher emissions of climate-warming gases, it said.

But it still should be stressed that the IEA also says no such thing will happen – in most of the other scenarios and cases. The New Policy scenario sees nuclear energy capacity increasing 70 percent. In introducing this scenario, the report directly says (no link – IEA would like to sell this report):

In the New Policies Scenario, generation from nuclear power plants worldwide increases by almost 2000 TWh over the Outlook period, more than the nuclear output in North America and OECD Europe combined in 2010. This increase comes predominantly from non-OECD countries, with China alone accounting for over two-fifths of the global increase. In India, nuclear power generation grows almost ten-fold. In Russia, it grows by two-thirds. About 60% of the nuclear capacity added in the OECD replaces ageing nuclear plants that are retired in the Outlook period; in total, capacity increases by only 16%.

And elsewhere in the report, the report mentions that most countries have reaffirmed their commitment to their nuclear energy industries.

That’s the thing about the future – you can say almost anything about it – ands IEA does, sometimes drastically different things, from year to year. And that’s fine: after all, the accident in Japan happened between two reports.

The IEA reports are highly informed, but still, they cannot be anything but provisional. It’s the nature of the work. (The OECD, by the way, is the Organization for Economic Cooperation and Development, a sort of international chamber of commerce.)

Now, having said all that, the point these stories make is more than valid. if nuclear capacity were halved in the next 25 years, IEA cannot project a plausible way to achieve key policy goals – about global warming and carbon emission reduction – and the price of electricity will certainly face upward pressure. Moreover, renewable energy source will take up some of the slack, but coal will take up a lot more.

And IEA says the cost to replace nuclear capacity and meet new demand will be somewhere in the neighborhood of $1.5 trillion. (after a few billion, why just hand out blank pieces of paper?)

While it was certainly pleasing to watch EIA set the table for a lot of press attention, I think it’s fair to say that most policymakers understand what nuclear energy is and does – what policy goals it helps achieve – and how much electricity it can produce. So the somewhat dire tone taken – while justified by the report – reflects what is explicitly a prediction not a reality.

No one wants to alarm anyone, you understand.

Although the report is not available to the general public, you can still get a lot of information here.

Unusual angle on the Doel nuclear facility in Belgium. But not by name.