In Age of Austerity, France Stays with Nuclear Power

First, an additional tidbit on our coverage of IEA’s World Energy Outlook 2011, where we learned that the rumors of nuclear energy’s demise are greatly exaggerated. Just consider this chart from page two of the “Key Graphs” part of the report. 

As you can see, the IEA sees nuclear’s future more in line with the measured growth of renewables rather than coal or oil’s steady decline.

In its report, the IEA imagines a world without (or actually, with very little) nuclear power. It’s called the “Low Nuclear Case” scenario. And surprise! It’s not the utopia some would have you believe.

The net result would be to put additional upward pressure on energy prices, raise additional concerns about energy security and make it harder and more expensive to combat climate change.

Of course, it’s a projection, so it has to be taken with a grain of salt. But the data coming in from countries that have scaled back their nuclear energy plans show that the IEA is onto something.

First, there’s Germany. As we’ve covered before, their nuclear moratorium has led to higher cost electricity, lost jobs and more emissions.

There’s some evidence that Japan’s shutdown of most of its reactors may be having a negative effect on Japan’s export-based economy. [Financial Times, subscript req’d. “Japan restarts first nuclear reactor since disaster,” Nov. 1, 2011.]

Concerns about stable supply of electricity are prompting some [Japanese] companies to shift production overseas. A rise in fuel costs for utilities to make up for a lack of nuclear power, leading to bigger electricity bills for consumers, is another factor undermining the economy.

A full nuclear shutdown would have a huge annual bill as Japan turns to more expensive fossil fuels.  

Using gas and oil to make up for the loss of all nuclear power reactors will cost more than 3,000 bn yen ($38bn) a year, based on imported fuel prices and utilisation rates in 2009, the government has estimated.

Another country has considered the pros and cons of nuclear power, but when asked about shutting down its reactors replied with an emphatic “Non, merci!”

The French government's fiscal belt-tightening effort won't touch the country's ambitious nuclear energy program, France's energy minister said Wednesday, as he also dismissed any need for France to reduce its nuclear dependency...French energy and industry minister Eric Besson said Flamanville, the follow-up Penly reactor and other French nuclear investments won't be affected "at all" by the country's austerity package.

"The plan is designed to reduce deficits, yet growth engines aren't touched, budgets for the future haven't been dented," Mr. Besson said two days after the government unveiled a €7 billion austerity package.

In fact, it turns out nuclear energy can be especially helpful in times of austerity. First nuclear energy creates jobs—not only in the industry itself—but in wholly unrelated fields.

Mr. [Henri] Proglio [chief executive of Electricité de France] said that 400,000 jobs, direct and indirect, in the nuclear industry would be threatened [if France shut down its reactors] as well as another 100,000 future jobs dependent on nuclear exports. Another 500,000 jobs in energy-intensive sectors like aluminum production could be outsourced to other countries as a result of higher energy costs, he predicted.

Lower cost electricity (generated thanks to nuclear energy) also leaves ratepayers/consumers with more money in their pockets, too. Money they can spend on other goods and services, spreading the wealth.

The French pay, on average, about 30 percent less for their electricity than their neighbors do, he said, ‘‘thanks to our nuclear establishment and hydropower.’’

Of course there is a way out. Something akin to the IEA’s Low Nuclear Case: build more fossil fuel plants.

Mr. Proglio told the paper that it was his ‘‘conviction’’ that France…would need to invest somewhere in the vicinity of $544 billion to build new fossil fuel power plants to replace lost generating capacity if it shut down its reactors.

That, he said, would have to be financed by a doubling of the price of electricity and would bring a 50 percent increase in France’s greenhouse gas emissions.

A doubling of electricity prices, hundreds of thousands of jobs lost and (lest we forget!) higher emissions. Sounds like the IEA is onto something in its projections of a world without nuclear power. And sounds like France has the right idea to not scale back nuclear energy during tough times. Something to keep in mind as more nations, including our own, face budget cuts.