Asia’s Energy Temptation Reading Answers

Nuclear power supplies 5% of the world's energy from more than 400 plants. But with the exception of France and Japan, the rich world has stopped ordering new reactors. A technology that was once deemed both clean and "too cheap to meter" has proved to be neither. The industry's chief hope now rests on the poor world. Western firms with reactors to sell will be relying on Asia, where electricity demand is growing at 8% a year. New reactors are planned in China, Taiwan, Indonesia, South Korea, Pakistan, and India. It is good news for the reactors' vendors, but these countries are making a mistake.

The economic arguments for building new nuclear plants are flawed. The marginal costs of generating electricity from nuclear energy may be tiny, but, as the technology now stands, huge and uncertain costs are involved in building the power stations, dealing with spent fuel, and decommissioning. Many western governments which sang nuclear's praises now admit that gas and hydropower can produce cheaper electricity.

The economics of nuclear power in the poor world could prove to be worse still. As in the rich world, fossil fuels such as gas and coal are invariably cheaper. In China, the case for nuclear power may be a little stronger as domestic reserves of coal - though huge - are located far from some areas of growing electricity demand. But most developing countries, including China, are strapped for cash and need to increase electricity supply quickly to meet soaring demand. Nuclear plants fail on both counts: they are hugely capital-intensive and can take as long as ten years to build.

Those still charmed by nuclear power nowadays make three new arguments in its favor; that it is a defense against climate change, against another OPEC-administered oil shock, and against the inevitable exhaustion of fossil fuels. None bears close examination.

At present rates of demand, the world has enough oil to last for more than 40 years, enough gas for more than 60 years and enough coal for more than 230 years. Naturally, demand will increase; but so will reserves as companies explore more widely and costs fall. Since 1970 viable reserves of oil have almost doubled while those of gas have leaped three-fold. One distant day a crunch will come, but as it approaches fossil-fuel prices will rise, making alternative forms of energy, perhaps including nuclear power, competitive. That is no reason to spend on nuclear now.

An oil shock is a more worrying prospect, despite today's low oil price and OPEC's present inability to budge it upwards. After all, the cartel still sits on 75% of the world's economically viable reserves, and the politics of the Middle East can change at a stroke. However, even if an oil shock is a real danger, building nuclear reactors is not a good way to avert it. A higher oil price would have a relatively small effect on the supply of electricity — the only sort of energy that nuclear power can now provide.

Just over a tenth of the world's electricity (and 14% of Asia's) is generated from oil, and the proportion has fallen steadily since 1970. Besides, there are superior, non-nuclear, ways to prepare for an oil shock. Governments could take advantage of today's low oil prices to build up their stocks. Especially where congestion and pollution are serious problems, they could try to restrict the growth of car use or promote cars which guzzle less fuel. For governments keen to reduce electricity's remaining dependence on oil still further, there are usually cheaper alternatives to nuclear, such as coal or hydropower.

Climate change is a legitimate worry. Although still riddled with uncertainties, the science of climate change is becoming firmer: put too much carbon in the atmosphere and you might end up cooking the earth, with possibly catastrophic results. But here again, switching immediately to nuclear power is not the best response.

Cutting the hefty subsidies that go to the world's coal producers would help tilt the world's energy balance towards natural gas, which gives off much less carbon dioxide.

Developing countries subsidize electricity prices to the tune of up to $120 billion a year, according to World Bank estimates. If prices reflected the true costs of generation, electricity demand would fall, thus cutting greenhouse emissions.

Once the tough job of cutting subsidies is over, governments might want to reduce greenhouse gases further. Again there are carbon free energies that merit more subsidies than nuclear. The costs of many renewable technologies, such as solar and wind power, have fallen dramatically in recent decades.

Moreover, supporting nuclear power to ward off climate change, means swapping one environmental risk for another. Voters in many countries fear radiation like the plague.

The risks of nuclear accidents may be tiny, but when they happen they can be catastrophic. Renewables are not without their environmental disadvantages (wind turbines, for example, can be unsightly on hilltops), but are much cleaner than nuclear.

The billions of rich countries each year pump into nuclear research would be better spent on renewables instead. Having been invented, nuclear power will not disappear. The nuclear industry still has a job to do, running existing nuclear plants to the end of their lives as cleanly and safely as possible. For now, the case for nuclear power is full of holes. Asia should resist the temptation to throw its money into them.