Lovins addresses New Nuclear Power for DOD (Q&A 1 of 3)

In the energy biz, there's no one quite like Amory B. Lovins. I'll spare you further remarks on him, but suffice it to say, if his name is new to you, then you are but a mere toddler on the path of energy wisdom. We ran a post recently on the potential promise of new nuclear power generation approaches for powering DOD. Here is part of 1 of Amory Lovin's comprehensive three-part response to that post. Wait a second ... reading this article first will help, since Amory uses the term "micropower" as if you know exactly what he's talking about. It'll also give you a better intro to him than I have here.

Question 1 : Mr. Lovins, throughout your career as a thought leader on energy matters you've made it clear that nuclear power generation is a highly sub-optimal way to address our nation's energy challenges. Does the advent of new-design reactors alter your opinion in any way?

ABL: No. As a 40-year student of the empirical evidence on the cost and performance of nuclear power and its competitors, I see no prospect that any known form of nuclear fission (or for that matter, fusion) could become a cost-effective way of making new electricity. Even if the nuclear part of a GW-range power station were free, the other two-thirds of its capital cost would still be grossly uncompetitive with end-use efficiency and micropower (i.e., cogeneration plus renewables other than hydro dams over 10 MWe). The underlying analysis is published in "Nuclear Power: Climate Fix or Folly?" The results are summarized in the expanded version of my recent Foreign Policy paper "On Proliferation, Climate, and Oil: Solving for Pattern".

Despite 100+% subsidies, plus three years (Aug 05–Aug 08) of the most robust capital markets and nuclear politics in history, proposed new U.S. nuclear plants have been unable to raise any equity from the private capital markets—because they have no business case. Instead, the world in 2008 got 17% of its total electricity from micropower (vs. nuclear's 13%) and ~91% of its new electricity from micropower (vs. nuclear's less than 0). Micropower is walloping all central thermal plants in the global marketplace because it has lower levelized costs and lower financial risks, so it can better attract private investment. For example, in 2008, distributed renewables got $100 billion of private capital and added 40 GW of capacity, while nuclear power got and added zero; all renewables, including big hydro, even got more investment than all fossil-fueled generation did.

Of the 55 reactors listed by the IAEA as under construction, 12 have been so listed for over 20 years, 34 have no official startup date, most are late, 40 are in four centrally planned and nontransparent power systems (China, Russia, India, South Korea—China has 17 of the 21 starts in 2008–09), 55 were bought by central planners (nearly always with a draw on the public purse), and none were free-market purchases competed against or compared with their proper range of rivals. Thus new power reactors can be built only where and to the extent taxpayers can be forced to pay for them (as a few states now do—in advance, whatever they cost, whether they ever run or not, no questions asked...thus jettisoning all the bedrock principles of utility regulation, and creating the same moral hazard that just crashed the financial system). For those who reject a socialized electricity system and take market economics seriously, as I do, nuclear power is a nonstarter on economic grounds alone. Both conventional and "new" reactors and fuel cycles also have broadly similar proliferation, vulnerability, and waste issues, differing in many details but not in fundamentals. But those issues need not be addressed if the technology is clearly uncompetitive.

And he's not nearly done yet. Click HERE for Lovins' response to question #2.