A nuclear response to our energy problems
By Oleg Deripaska
Published: January 21 2009 19:23 | Last updated: January 21 2009 19:23
When you are trapped in the middle of an unprecedented storm, all efforts are focused on the short-term but essential task of simple survival. Long-term challenges, no matter how serious, are pushed into the background.
So it is no surprise, as the world tries to come to grips with the severest financial crisis for generations, that energy security and climate change have fallen down the agenda. This is doubly true when the dramatic rise in the price of oil that helped fuel these concerns last year has collapsed as the global downturn has reduced demand.
But the current crisis, though severe, will pass. The global economy will recover. When it does, we will find that the challenges of powering our homes, businesses and economies in a secure and sustainable way have not disappeared but have become more urgent. We must not be fooled into believing a temporary fall in the price of oil is an answer to the world’s energy problems.
Oil prices will not continue to fall even in the short-term. Opec, the producers’ cartel, has already indicated that it will continue reducing production. Perhaps even more important, the present financial difficulties seem also certain to reduce the amount of oil available in the long term.
Across the world, oil companies are cutting back on the capital investment needed to replace their ageing infrastructure. Lower prices mean less incentive, as well, to build new refineries and pipelines, to develop harder-to-reach oil fields and to invest in exploration.
The result is likely to be less oil and higher prices all at a time when world demand for energy will start to accelerate. And whatever the short-term problems in the global economy, the long-term trends for energy demand are all upwards.
Between now and 2050, the world population is forecast to grow from 6.6bn towards 9bn. China, India and the other emerging economies will continue to expand. They will need more power to fuel their industries. Their citizens will spend their new wealth on more travel and consumer goods.
Nor will the challenge of global warming go away. The scientific community warns we are running out of time to prevent irreversible changes to our climate. They call for huge cuts in the amount of carbon we are pumping into our atmosphere.
This is simply not possible if we continue our love affair with fossil fuels and continue to spread prosperity.
It is against this long-term background that we must continue to focus on the importance of nuclear energy. If we are serious about meeting the challenges of energy security and climate change, we cannot allow the ambitions of doubling nuclear capacity by 2030, expanding it to new markets and developing new types of reactors to fade.
Nuclear power, of course, should not be viewed as the only answer. We need to invest right across the board so we can obtain more energy from other low-carbon sources. But we have to be realistic about what these can offer. No renewable source yet has the capacity to generate the amounts of power needed to replace large fossil fuel plants.
As we enter a global recession, cost is also an important factor. The new generation of nuclear reactors is cheaper than its predecessors and produces energy at a considerably lower cost than other low-carbon energy sources.
Nuclear power, for example, can be as much as three times cheaper than wind and five times cheaper than solar power. The new generation of lead-bismuth-cooled fast reactors that we expect to come on stream in Russia after 2015 will make nuclear even more competitive, delivering safe, reliable and emission-free energy at the lowest possible cost.
What we also know is that nuclear power emits virtually no greenhouse gases. The complete nuclear power chain – including the mining of uranium, shipping fuel, constructing plants and managing waste – produces about the same amount of carbon dioxide as the full life-cycle emissions of wind and solar power. The current 440 nuclear power reactors worldwide would increase the annual amount of carbon pumped into the atmosphere by up to 600m tonnes if the power had to be generated by fossil fuels.
Our world faces enormous energy challenges, including growing global demand, doubts about oil supplies, extremely volatile prices and an urgent need to produce and use energy in ways that reduce greenhouse gas emissions. A big increase in nuclear power has to be part of the solution. It would be a bad mistake if the financial crisis led us to postpone the decisions and investment needed to provide the world with a viable source of safe, secure and environmentally friendly energy.
The writer is chairman of the supervisory board of Basic Element and was part of a group of business leaders co-ordinated by the World Economic Forum that made climate policy recommendations to the Group of Eight industrialised nations leaders in Hokkaido
Copyright The Financial Times Limited 2009