14 October 2021

In Global Energy Crisis, Anti-Nuclear Chickens Come Home to Roost

Ted Nordhaus

For years, the proponents of wind and solar energy have promised us a green future with electricity too cheap to meter, new energy infrastructure with little environmental impact on the land, and deep cuts in carbon emissions. But despite the rapid growth of renewable energy, that future has yet to materialize. Instead, many of the places that are furthest along in transitioning to renewable energy are today facing a crisis of power shortages, sky-high electricity prices, and flat or rising carbon emissions.

In California, Gov. Gavin Newsom has ordered companies owning backup diesel generators to operate them nonstop when electricity demand is high in order to avoid rolling blackouts. In Britain, exploding natural gas prices have shuttered factories, bankrupted power companies, and threaten to cause food shortages. Germany, meanwhile, is set for the biggest jump in greenhouse emissions in 30 years due to surging use of coal for power generation, which the country depends on to back up weather-dependent wind and solar energy and fill the hole left by its shuttered nuclear plants.

The proximate cause of all these crises has been surging natural gas prices as the world recovers from the COVID-19 pandemic. But the underlying problem is that despite huge bets on renewable energy over the last several decades, California, Britain, and Germany have chosen fossil fuels over carbon-free nuclear energy to backstop their electrical systems.

Germany and California have prioritized closing nuclear plants over decommissioning coal and gas plants. But with so much power still generated from fossil fuels, rapid declines in the cost of wind and solar have not translated into cheap electricity. Electricity prices, in fact, have tended to be highest in places with the greatest share of renewable energy. Public resistance to the growing land use impacts of renewable energy has further hobbled efforts to build out renewables and the infrastructure necessary to support them.

One might dismiss these inconvenient developments as hiccups in the early phases of a global energy transition. But in many ways, the early phases are the easiest: Wind and solar developers can cherry-pick the best locations with good access to existing transmission lines. There is a huge reservoir of existing, on-demand, fossil fuel power generation that can supply the lion’s share of electricity demand while also filling in for renewable energy sources when the sun doesn’t shine and wind doesn’t blow. Subsidies for renewable energy are manageable for taxpayers and electricity consumers as long as the share of wind and solar supplying the grid isn’t very high.

But as the share of renewable energy grows in places like California and Germany, the technical challenges associated with scaling up renewables become more difficult. Once the share of variable renewable energy (i.e., solar and wind) begins to approach 20 percent or so, it swamps the electrical grid whenever the sun is shining and the wind is blowing. Surges of wind and solar power at particular times of the day not only undermine the economics of other power sources on the grid but also undermine the economics of adding additional wind and solar. This phenomenon, called value deflation, is already eroding the economics of wind and solar in California and elsewhere—even at relatively low shares of grid penetration.

Sustained phases of low wind and overcast skies, as much of Europe saw this summer, create the opposite problem, with wind and solar generating far less electricity than normal. During those periods, grid operators need to have enormous amounts of backup generation standing by—essentially an entire second grid of capital-intensive fossil fuel plants that, under the best of circumstances, rarely need to operate but must still be built and maintained. Then there are seasonal variations in wind and solar that are larger still, requiring a vast overbuilding of wind and solar generation capacity in order to produce enough electricity during those times of the year when wind or sun is scarce. This, in turn, requires idling much of that overbuilt wind and solar generation when wind and sun are abundant.

On paper, the problems of renewable intermittency are solvable. In the spreadsheets and models of academics and clean energy advocates, the deserts bloom with megascale solar farms, while vast forests of skyscraper-sized wind turbines sprout in offshore waters. New transmission lines move power across hundreds or even thousands of miles from the sunny deserts and windy coasts to the population centers where it is needed. To store intermittent wind and solar power, the world’s hydroelectric dams are retrofitted to run backward and forward, using excess wind and solar power to pump water uphill to be released whenever power is needed. Industrial facilities, meanwhile, shift their production schedules to use electricity when it is available, while our refrigerators and air conditioners turn themselves off and on in response to fluctuating availability of wind and solar power.

The reality looks very different. Consider California’s energy challenges. The state boasts the highest renewable energy share of any U.S. state—and has among the highest electricity prices. It generates 23 percent of its power from solar energy and a further 7 percent from wind annually. It has committed to source 100 percent of its electricity from clean sources by 2045.

But California’s share of electricity from clean energy has been on a treadmill for most of the last decade, beginning around 2012, when the San Onofre nuclear power station in southern California closed down after regulators refused to allow the reactor to operate at reduced capacity to address issues related to the installation of a faulty steam turbine. Six years later, in 2018, the California Public Utilities Commission (CPUC) approved a deal brokered by state environmental groups with the local operator Pacific Gas & Electric to shutter the state’s last nuclear power station, the Diablo Canyon plant, by 2025.

Political leaders and the environmental community in California insist Diablo Canyon will be replaced entirely with renewable energy and efficiency measures. But even before the closure, the state has struggled to keep the lights on. Since the San Onofre plant shut down, it has waived rules intended to close California’s dirtiest natural gas plants because they remain critical to grid reliability.

This year, in anticipation of the Diablo Canyon closure, a draft proposal by the CPUC acknowledged it would need to add additional fossil fuel capacity to its midterm generation plan—and then walked that plan back in response to outrage from the state’s environmental community. Instead, the commission announced it would approve “temporary” gas plants that would not be part of the state’s formal generation road map.

But the fact that the state has not allowed its dirtiest natural gas plants to close for the better part of a decade makes clear that the new temporary gas plants are likely to remain running for years to come. Worse, the temporary plants the state plans to procure are substantially more polluting than the new permanent plants it had originally proposed. The benefit of the allegedly temporary gas plants, though, is that they have allowed California’s political leadership and environmental community to maintain the fiction that the state is still on track to achieve its climate goals. This fig leaf of environmental correctness was quickly followed by the order to fire up emergency diesel generators, which are just about the dirtiest source of electricity the state could possibly utilize.

All this is necessary because California is not remotely on track to fill the hole Diablo Canyon will leave with clean energy. New geothermal generation slated to come on line by 2026 is now delayed until at least 2028. New facilities combining solar generation and battery storage are also being developed much more slowly than the planners’ Pollyannaish assumptions, not least because of the unrealistic amount of battery storage required in the state’s generation plan over the next three years compared to current global battery production capacity.

Meanwhile, the economic value of solar generation continues to fall, and public resistance to the expanding footprint of the state’s renewable energy industry is growing. San Bernardino County, the largest county in California by area and home to much of the state’s prime desert locations for both solar and wind energy, placed a moratorium on new solar and wind development on more than 1 million acres in 2019.

Unfortunately, California’s electricity follies are hardly exceptional. Germany’s hundreds of billions of euros in renewable energy subsidies have bought it the costliest retail electricity in Europe. The need to fill the hole left by the nation’s shuttered nuclear plants and back up growing wind and solar generation has forced Germany to become even more dependent on domestically produced (and extremely carbon-intensive) lignite coal and Russian natural gas, resulting in largely stagnant—and lately rising—emissions. The former has forced the nation to delay its climate ambitions. The latter has left Germany’s economy and citizenry vulnerable to price gouging and blackmail.

Belgium, bowing to pressure from the country’s Green parties, is moving forward with plans to retire its nuclear power plants by 2025 without so much as a pretense of replacing them with clean generation. Instead, it will subsidize construction of new natural gas plants. Spain, meanwhile, just announced electricity price controls in response to spiraling natural gas and electricity prices, a move that threatens both its renewable energy and nuclear power sectors.

Even Britain, which has been celebrated as a poster child for effective clean energy policy in recent years because its carbon emissions have fallen the fastest of any major economy in the world, appears to be descending into an ever deeper energy crisis, in part due to its much-lauded decarbonization achievements. The country has cut its emissions significantly by replacing coal with natural gas and shifting 20 percent of its electricity production to wind energy. Meanwhile, Britain has struggled to update its aging nuclear reactors, which still account for 17 percent of the nation’s power supply. With a sustained lull in wind generation, a number of nuclear stations down for maintenance, and escalating natural gas prices, Britain, like other countries in Europe and Asia, is facing severe energy shortages, a situation that may get much worse in 2022 absent a fortuitously mild winter.

To speak of these failures is often seen by green energy advocates as an attack on renewable energy. It is not. There is no reason wind, solar, and other sources of renewable energy can’t play a significant role in modern electrical grids and the fight against climate change. Far more dubious, though, is the notion that wind and solar energy might be the sole or even primary source of energy for modern economies. The problem, in other words, is not that the countries now experiencing energy crises have invested considerable effort in scaling renewable energy. It is that they have done so largely to the exclusion of all other low-carbon energy technologies—and exacerbated this problem by simultaneously shutting down nuclear power plants.

In recent years, most energy analysts and even some green advocacy groups have moved away from the preposterous notion that the world might meet all of its energy needs via renewable energy technologies. But the consensus remains that the pathway to as much as 80 percent renewable energy, predominantly from ever cheaper wind and solar, is viable, well understood, and likely. The conceit, mostly unspoken, is that once the world gets there, we’ll figure out the rest, whether that be a bit of nuclear energy, fossil fuels with carbon capture, new geothermal technologies, or just good old-fashioned natural gas, offset by planting trees or some other “net zero” workaround. The future, after all, is a long way off.

Among purveyors of this new electricity math, “baseload power,” meaning large, centralized power stations that produce electricity day and night, is a thing of the past. Instead, wind and solar energy—arrayed across vast landscapes, connected by enormous networks of long-distance power lines, and assisted by yet-to-be-invented technologies capable of storing immense amounts of excess electricity for days, weeks, or even months until it is needed—would produce most electrical power most of the time.

But as experts and modelers have worked the problem over recent years, they have discovered that it is extremely difficult to cost-effectively run a grid with variable renewable energy without complementing it with technologies they’ve dubbed “clean firm generation.” To the untrained eye, many of the leading candidates for clean firm generation look a lot like the things that provide baseload power today: coal, natural gas, and nuclear energy. The difference is that in the models, these baseload plants would not run constantly as in the past but mostly sit idle, ramping up and down in response to the vagaries of the wind and the sun. In the case of coal and gas plants, they would also capture all their carbon.

In theory, nuclear, coal, and gas are all capable of playing this role. In practice, nuclear and coal are not terribly well suited to doing so. Both have huge upfront capital costs and significant operating costs that must be maintained whether they are burning fuel or not. In their present iterations at least, they are only economically viable when they operate most of the time.

Gas, though, is a different animal. Gas plants are cheap to build and easy to operate highly variably. Indeed, natural gas first gained a foothold in electrical systems for precisely this characteristic, as a generation source that was intended primarily to operate intermittently, in addition to baseload power generation during periods of peak demand. Little wonder, then, that the great expansion of wind and solar in the electrical systems of advanced developed economies has been accompanied by the expansion of gas, even in places where it has remained relatively expensive. Gas turns out to be the killer app for scaling renewable energy. The problem is that it isn’t clean and, in most of the world, it’s also not cheap.

An honest discussion of the path to a renewable energy future would acknowledge the critical role natural gas plays and is likely to continue to play for many decades to come. There is no shortage of gas globally and ample opportunity to develop new reserves in the coming decades. But that would require environmentalists and proponents of renewables to come to terms with fracking and pipelines in the near term, and carbon capture technology longer term, both of which they mostly oppose.

It will also require a reconsideration of the green movement’s long-standing NIMBY predilections. If there is a lesson to be learned from the current electricity crises, it is that even with a lot of gas, a power supply dominated by renewables is unlikely to be reliable and affordable without building a lot of things that many people are not going to like having nearby—including massive high-voltage transmission lines and industrial-scale wind and solar facilities with very substantial land use consequences.

Alternatively, environmentalists and policymakers might move beyond their singular obsession with renewable energy, which would open up other possibilities that will almost certainly be less costly, more reliable, and more effective at cutting emissions.

That starts with ceasing the closure of nuclear power plants. Before the 2011 Fukushima nuclear accident prompted a wave of nuclear plant closures across Japan, Europe, and the United States, nuclear energy provided 20 percent of electricity in the United States and more than 25 percent in the European Union and Japan. In addition to being clean, it was among the cheapest sources of electricity in all three places. And that clean electricity has proved impossible to replace with variable sources of renewable energy. In virtually every country that has closed nuclear plants, clean electricity has been replaced with dirty power, a testament to the unique capabilities of nuclear technology to produce vast quantities of always available electricity without carbon emissions.

In the United States, many leading green groups now give at least lip service to the idea of keeping existing nuclear plants open. In practice, though, what most of these groups have actually done in the face of pending nuclear closures—in New York, New Jersey, Ohio, and Illinois—has been to hold deals to keep plants open hostage to demands for still more subsidies for renewable energy.

By contrast, European greens—and governments such as Germany’s—remain fully unreconstructed on the question, pressing forward with nuclear closures and campaigning to block the European Commission from including nuclear energy on its list of sustainable energy, a designation that would acknowledge nuclear plants as a source of clean power, qualify them for a range of public subsidies, and make them eligible for investment by sustainable investment funds.

Beyond existing nuclear technology, several companies are working to license new advanced nuclear technologies at the U.S. Nuclear Regulatory Commission (NRC). These reactors, which use a range of different fuels and coolants, are typically smaller than conventional ones and can be fully manufactured (in contrast with conventional reactors, which are essentially large public works projects). Critically, they are also much better suited to ramping their output up and down, making them capable of operating more easily in concert with wind and solar energy.

Yet, in the U.S. Congress, draft budget legislation released recently by House Democrats contains significantly less support for advanced nuclear technology than wind, solar, and even carbon capture technology. This is despite the fact that advanced nuclear technology is still in its early stage, more in need of public support, and far more valuable to low-carbon electrical systems because of its ability to complement renewable energy.

Meanwhile, leading U.S. green groups are already gearing up to regulate advanced nuclear into obsolescence through the NRC’s licensing process before a single plant is built. Even though the reactors under development will be several orders of magnitude safer than already safe conventional reactors—which will make them by far the safest energy technology humans have ever invented—green groups are demanding regulatory measures far stricter than those currently required of conventional reactors.

At the same time, faced with a new generation of even safer reactors and the undeniable emissions benefits of nuclear energy, opponents have shifted their arguments, claiming that nuclear energy is simply too expensive. It’s an odd argument for climate advocates to make: For all other technologies, they insist that markets don’t properly value the benefits of cutting emissions, but when it comes to nuclear energy, markets apparently rule. The claim is also gaslighting of the highest order. The cost of building a nuclear power plant in any given nation today is roughly proportionate to the influence of the environmental movement in that particular place. China, South Korea, the United Arab Emirates, and Russia have all demonstrated in recent years that it is entirely possible to build cheap, reliable, and safe nuclear power plants when anti-nuclear peccadilloes are disregarded.

Nuclear plants in the West, by contrast, are difficult and costly to build because their opponents have made them so, insisting on regulation with no analogue in any other domain, including, ironically, nuclear medicine. They successfully campaigned to halt nuclear deployment decades ago, creating huge barriers to restarting the industry, reestablishing efficient supply chains and a skilled workforce, and gaining technological learning that can only be gleaned by manufacturing or building something multiple times. These latter factors have been key to falling costs associated with manufacturing wind turbines and solar panels, and there is no reason that won’t also apply to new nuclear technology if the world is willing to build enough of it.

Western greens have also long insisted that nuclear was uniquely unpopular with the public and thus not worth pursuing, even if it seemed, on paper, like an obvious and proven solution to climate change. But if the risks of nuclear energy have occupied a massively outsized place in the public psyche, the massive footprint of a full-scale buildout of renewable energy on actual landscapes and the people who live in and near them is proving to be no less daunting.

Nuclear energy is, without question, a complex technology that has been tragically misunderstood. But once you turn it on, producing power to meet most of the energy demands of modern societies most of the time is relatively simple logistically. Windmills and solar panels, by contrast, are simple and seemingly approachable technologies. But harnessing them to meet society’s energy needs—even some of the time—is a sprawling and complicated endeavor.

Ultimately, a future with a lot of nuclear energy—especially next-generation technology—is also one that can accommodate a lot of wind and solar. A future that forecloses the option of zero-carbon nuclear energy is one that, one way or another, is likely to require a lot of gas and even coal. In the face of its escalating energy crisis, Britain has just announced a crash program to build over dozen new nuclear reactors by 2035. Policymakers and green advocates across the West are facing, or soon will face, a similar choice: build more nuclear or accept a continuing and significant role for fossil fuels for many decades. The current wave of electricity crises worldwide is what happens when they pretend that choice need not be made.

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