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Wednesday, September 9, 2009

A Fascinating Article On Where Nuclear Energy Is Headed

Split on the atom

By Ed Crooks and James Blitz

Published: September 9 2009 03:00 | Last updated: September 9 2009 03:00

When Vladimir Putin visited Ankara last month, one of the Russian prime minister's main objectives was to breathe new life into Turkey's long-held dream of developing civil nuclear power.

The planned reactor at Akkuyu on Turkey's south-east coast, conceived in the 1970s and now being developed by a Russian-Turkish consortium, is still delayed by haggling over the price. But Turkey has made clear it is firmly committed to acquiring nuclear generation capacity.

Shelving the project back in 2000, Bulent Ecevit, then the country's prime minister, said the world had turned against nuclear power. Now, as Tony Blair, the former UK prime minister, once said, it is back "with a vengeance".

If the world is to meet its demand for energy and address the threat of climate change, then plenty of other countries will, like Turkey, have to acquire civil nuclear technology for the first time.

As US president Barack Obama put it in a speech in Prague in April: "All countries can access peaceful nuclear energy . . . We must harness the power of nuclear energy on behalf of our efforts to combat climate change, and to advance peace" for all people.

Nuclear energy provides about 15 per cent of the world's electricity. Some 30 nations generate nuclear power; 10 to 20 are expected to join them in the next 10 years. At present there are 370 reactors in operation. The International Atomic Energy Agency, the United Nations watchdog, reckons that 1,400 new reactors may be built between now and 2050.

This expansion is creating a conundrum for western policymakers, one with which the US administration is now urgently grappling. Nuclear power may be necessary to help the world meet climate change goals and guarantee energy supply. But it also brings with it considerable security concerns. Detaching peaceful nuclear energy from devastating weaponry is sooner said than done. The fuel for most modern nuclear power stations - enriched uranium - in more potent forms is used for nuclear arms. Washington and its allies do not want the expansion in civil nuclear power to allow any more nations to diversify into atomic weapons.

In recent decades, India, Israel and Pakistan have all used the materials and technologies offered in "atoms for peace" programmes to make bombs. Today the fear is that Iran is doing the same. "Finding ways that we can allow civil uses to spread, while also stopping the spread of nuclear weapons is at the heart of the Obama agenda over the next 12 months," says one European official.

To understand why this issue is at the centre of the US administration's international programme, it is important to focus on the three key factors inspiring the nuclear renaissance.

First, there is security of supply. Driven by the development of emerging economies such as China and India, global energy demand could rise by as much as 45 per cent by 2030, according to the International Energy Agency, which represents rich energy-consuming countries. As concerns have grown about the future availability of fossil fuels, which will be increasingly provided by a small number of large suppliers, energy consumers have come to see the virtue in diversifying their sources of supply.

Second, there is economics. The economics of nuclear power are fiercely contested, and highly sensitive to changes in variables such as construction costs. What is unarguable, however, is that it provides an energy source not linked to the oil price.

Even for oil- and gas-rich countries, such as Iran and the UAE, another Middle Eastern country keen to build civil reactors, nuclear generation makes sense because it frees up more of their hydrocarbon resources for export. The earnings from those exports "would easily pay for investment in nuclear energy", says Hans-Holger Rogner of the IAEA. Given likely long-term oil and gas prices, "It makes economic sense."

Finally, there is the growing pressure to meet climate change goals. The US and its allies accept that the global struggle to cap greenhouse gas emissions means nuclear energy options must be available. Nuclear energy is almost free of emissions and, if growing energy consumption is not to lead to soaring concentrations of carbon dioxide in the atmosphere, it is likely to play an increasingly important role.

The IEA has estimated that to keep the increase in global temperatures to acceptable levels, the world's nuclear capacity might have to increase more than five-fold by 2050.

Growing international moves to put a price on carbon dioxide emissions, likely to be given fresh impetus at the forthcoming UN climate conference in Copenhagen in December, also make nuclear power look more attractive.

Opponents counter that even a large expansion of nuclear power would have only a small impact on the overall global level of emissions. Pro-nuclear experts acknowledge that, while it may not be a crisis-solving "silver bullet", it can be one of several "silver buckshot" that, combined, can make a difference.

"Critics say there are lots of problems with nuclear power - that it is too little too late, too dangerous and too expensive," Mr Rogner says. "But if we want to curb greenhouse gas emissions and we don't use nuclear power for base-load [continuous] electricity generation, what can we use instead?"

The progress of the global industry is by no means guaranteed. Several factors may impede it. Public opinion may harden against nuclear power. Private sector investors may refuse to commit the vast sums that will be needed. A worldwide shortage of skilled engineers and manufacturing facilities for essential components is likely to be the greatest obstacle to delivering reactors fast enough to meet demand. Practical solutions for the long-term storage of radioactive waste remain elusive.

Yet the most serious concern of all over the nuclear renaissance remains the link to proliferation. Power stations are not, in themselves, much of a risk - the problems lie in the uranium enrichment process, which can be employed to develop both civil and military versions of nuclear power.

"The world will be a much more dangerous place if more countries acquire enrichment and reprocessing facilities, because then we will have more potential nuclear weapons states," says Leonor Tomero, of the Center for Arms Control and Non-Proliferation in Washington.

The Obama administration and its main allies, therefore, believe they must strengthen the rules of the game before the next wave of reactors is built. The focus of their attention is a conference next May in New York, which will review the 40-year-old nuclear non-proliferation treaty. More than 160 countries will attempt to broker stronger rules that widen the use of civil nuclear power, while penalising those states that try to diversify their programmes into weapons production. However, suspicions and resentments between the members of the nuclear club and those aspiring to join it mean reaching an agreement will not be easy.

Securing tougher rules is only one part of US strategy. Other ideas being considered include an IAEA proposal to create a small number of huge nuclear fuel banks that will supply a large number of reactors. The merit of this idea is that it will mean most countries have no justifiable reason to enrich their own uranium in the way Iran is currently seeking to do.

Separately, other ideas are being promoted to ensure the safety of nuclear materials. In particular, the US wants to promote a nuclear security conference in Washington next March, one that aims to ensure nuclear materials do not fall into the hands of terrorists. "The idea here is that we should extend the IAEA's role so that it does more than just give advice to countries to ensure that their material is safe," says a UK official. "There will also be more of an obligation on states to be inspected and verified to ensure their security procedures are up to standard."

There are signs that some countries are prepared to stay out of uranium enrichment. The UAE, for example, has said it has no interest in acquiring fuel cycle capability, and is open to the idea of importing fuel from an international supplier.

But there is also resistance. Some states that may want to develop nuclear power, such as developing countries belonging to the Group of 77 and the Nonaligned Movement, say they need the confidence that a reliable supply of nuclear fuel will be available. A small number of fuel banks, they say, cannot provide that.

Others, including such leading emerging economies as Brazil and Egypt, have refused to sign the NPT's "additional protocol" that gives the IAEA the power to conduct unfettered inspections of a nation's nuclear facilities. Almost every country in the world, including Iran, has signed the NPT - except India, Pakistan and Israel. However, only 123 have signed the additional protocol and only 91 have brought it into effect.

There is some scepticism about the chances of a deal being reached at the NPT review conference in May, says Ms Tomero. Suspicion that the US and other nuclear powers are setting the rules to suit their own ends remains high. The last NPT review attempt in 2005 ended in a flop. Four years on, the stakes have been raised. If the 2010 conference goes the same way, the consequences will be grim - for the world's security, prosperity and climate.

The lucrative fusion of politics and business

In a few weeks Abu Dhabi will write nuclear history when it unveils the winner of a multibillion dollar tender. With the initial reactors set to launch around 2016, the Emirate will be the first Arab state to have nuclear power. Where Abu Dhabi goes, others will follow: Saudi Arabia, Kuwait, Qatar and Jordan have all voiced desire for nuclear power.

The budding new market has drawn considerable political and commercial interest. Political concerns may be of the highest order; how lucrative the nuclear business opportunities really are remains unclear.

The international interest in the Middle Eastern market far outstrips its commercial value, says Steve Kidd, of the World Nuclear Association. According to WNA estimates, outside of Iran only two nuclear reactors will be operating in the region by 2020 and just four by 2030. "It is not a lot compared to China where you could win contracts for up to 40."

One of the main reasons is clearly political. Nowhere is this better demonstrated than in France, home to some of the world's leading nuclear companies such as EDF, GdF-Suez and Areva. These firms - all among the bidders in Abu Dhabi - are key tools in President Nicolas Sarkozy's nuclear diplomacy in the Middle East: tough on Iranian enrichment ambitions, but open to selling know-how to those countries willing to abide by international rules. "It is the best way to show Iran that we are not against the Middle East having nuclear technology," says one French government official.

France also believes that there could be huge wider commercial gains to be had from nuclear deals, especially in defence and infrastructure. The Elysée has sent Philippe Marini, a senator, to the region to explore ways of bolstering French interests. The recent decision to open the share capital of state- owned Areva to sovereign wealth funds was one early result. "Civil nuclear power is clearly closely tied to political strategy," notes Mr Marini. Meanwhile, several Middle Eastern funds have struck deals with French companies.

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