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

In this, the third and final post in a short series of Q's & A's with RMI founder Amory B. Lovins, we ask him to take what he's been recently saying and thinking about "new nuclear" energy technology and articulate it strictly from a DOD perspective. Lovins is no stranger to DOD, and played major roles in both of the highly influential Defense Science Board (DSB) Task Force on Energy reports (2001 and 2008). He's a thought-leading outsider who knows more about DOD and energy--where it's been and where it needs to go--than maybe all the readers and writers of this blog put together. That said, please read the following with a critical eye and see if it holds up for you.

Question 3: Are there any points in particular you'd like to call out re: the on nuclear energy generation potential for DOD?

ABL: Yes. Two major technical task forces evaluating DoD's energy options have carefully considered the various nuclear technologies at diverse scales that were vigorously suggested to them. Both pointedly declined to recommend military pursuit of any nuclear technology to power facilities. My 1Q2010 Joint Force Quarterly (JFQ) article "DoD's Energy Challenge as Strategic Opportunity" explains, with footnotes omitted:

"Nuclear power is sometimes suggested for land installations or even expeditionary forces, typically without discussing cost (grossly uncompetitive), modern renewables (typically much cheaper), operational reliability (usually needing 100% backup), or security. For these and other reasons, the 2008 DSB and JASON task forces didn’t endorse this option."

Some of the task forces' reasons are obvious. For isolated or grid-connected fixed installations, any mini-reactor would require 100% backup, as analysis of a Toshiba ~10-MWe unit proposed for the fly-in village of Galena, Alaska confirmed. Moreover, its economics would be dreadful. Unconservatively assuming the same $2,500/KWe capital cost at 10 MWe as at 50 MWe, a found that if the reactor (with capex upwards of 9¢/KWh) and its licensing (roughly comparable or larger under current rules), its installation and removal, and its decommissioning were all free, if O&M costs were half Toshiba's estimate for the 50-MWe design, and if NRC dropped the required security staffing from 34 to 4 guards, then the ~5–14¢/KWh operating cost alone might compete with diesel's, burning costly barged-in fuel; but to make even this work, the study had to make many absurd assumptions. I'm unaware of any remote installation for which a mini-reactor can be shown to be competitive.

Nor, inherently, can a mini-reactor's security of supply approach that of a properly designed network of diverse and distributed sources. The principles of resilient design, summarized in Ch. 13 of " Brittle Power", are no more compatible with a single power source than are the principles of least cost . Nuclear power does not earn a place in a "diversified" DOD energy supply portfolio simply by being different, any more than a financial portfolio should include one of everything on offer. Rather, a balanced portfolio includes only assets with a clear risk-and-return rationale.

The Naval situation is different, but not completely, as my JFQ article continued:

"After vast investment in hardware and a unique technical culture, nuclear propulsion has proven its merit in submarines and aircraft carriers. In 2006–09, Congressional enthusiasts announced supposed Naval Sea Systems Command (NAVSEA) findings that nuclear propulsion in new medium surface combatants could beat $70/bbl oil. However, the 2008 DSB task force discovered that NAVSEA’s actual finding ($75–225/bbl) had improperly assumed a zero real discount rate. A 3%/y real discount rate yielded a $132–345/bbl break even oil price; NAVSEA didn’t respond to requests to test the 7%/year real discount rate OMB probably mandates. Presumably the Secretary of Defense will reject this option and focus resources on making ships optimally efficient."

In short, as my JFQ article concluded, "The 2008 DSB and JASON studies are redirecting the military energy conversation from exotic, speculative, and often inappropriate supplies to efficient use, which makes autonomous in-theater supply important and often cost-effective...."

It's therefore disappointing to see that some in the Building, apparently unaware of the full competitive landscape, are now wasting still more time and money on nuclear power after both of DOD's advisory bodies rejected it for many compelling reasons. I hope the Congressionally mandated report the DOD Energy Blog mentions (4th paragraph: here), due 1 Jun 2010, will dig deeper than the current cheer-leading—originating ultimately from vendors desperate to find a cost-insensitive customer for technologies already rejected by the marketplace.

There you have it, sports fans. Amory's systems-based, economics-grounded response has substantially squelched my recently burgeoning enthusiasm for a new nuclear component to DOD's energy portfolio. I have to check my own cheer-leading tendencies sometimes. That said, if there's a man or woman among you who wants to attempt a public retort to these arguments, be my guest ... and good luck, you're going to need it!

Photo Credit: Edmunds.com