Archive for October, 2012

Lead:

• Sandy-Area Nuclear Reactors Remain Offline

Above the Fold:

• Alert At New Jersey's Oyster Creek Reactor Ends As Water Recedes
• Sandy’s Power Blackouts Could Last Beyond U.S. Election
• Obama Stresses Getting The Power Back On As Top Priority To Utility Execs

Opinion:

• DAMIAN REECE, TELEGRAPH: UK Coalition Must Clear The Way For Nuclear Projects To Get Started
• JAMES TULENKO AND DIEGO GARCIA: Dispelling The Myths About U.S. Nuclear Energy

People, Politics: 

• DOE: Guards at Breached Nuclear Site Cheated on Exam
• DOE Pushes Back Against GOP Energy Stimulus Jobs Creation Report

Business:

• CEO Thomas Fanning: Sandy Storm Confirms Southern Co. Strategy
• Ameren Rallies Support For Nuclear Plans
• Storm-Closed U.S. Nuclear Plants May Boost Natural Gas Use
• Investment Banker: Government Subsidies are Scaring Away Capital from Green Deals

International:

• Office of Nuclear Regulation: Third of U.K. Nuclear-Safety Concerns Unresolved
• Major Injection Of Capital Shows Appetite For UK Energy
• Russian Handoff Of Bushehr Reactor To Iranians Delayed
• Bulgaria Will Hold Referendum on Nuclear Plant January 27

Lead:

• Duke Delays Decision On Crystal River Repair: Final Verdict In Mid-2013?

Above the Fold:

• NRC Starting to Return to Normal Inspection Coverage After Sandy
• Nuclear Plants Get Through the Storm With Little Trouble
• Sandy Shutdowns Lower Nuclear Output by Most Since 2003

Opinion:

• THE DAYTONA BEACH NEWS-JOURNAL: Nuclear Energy Should Be In Florida's Portfolio

Business:

• China's Guangdong Mulls Investing In Romanian Nuclear Plant
• Hitachi Officials To Visit Anglesey Nuclear Project 

International:

• 4,000 Nuclear Jobs: Joy At Hitachi's £700 Million Power Plants Deal
• China Builds Its First Experimental Fast Neutron Reactor
• Chile Thinking Again Of Nuclear Energy Use

Lead:

• Sandy: U.S. Nuclear Energy Fleet Passes Biggest Readiness Test Since Fukushima

Above the Fold:

• Indian Pt 3, Salem, Nine Mile Shutdown: Oyster Creek Remains on Alert
• Entergy’s Northeast Nuclear Plants Safely Weather Hurricane Sandy
• Sandy Slashes Power to Millions, Nuclear Plants in Stable Condition
• Hurricane Sandy: Litmus Test for America's Utilities

People, Politics: 

• Al Gore Calls Sandy A ‘Disturbing Sign Of Things To Come,’ Urges Climate Action

Business:

• Plant Vogtle And A Nuclear Renaissance In The U.S.
• Hitachi Deal Fires Up UK Nuclear
• Hitachi Expects SNC-Lavalin Will Have Role In Building UK Nuclear Plants
• Video: Aris Candris of Westinghouse Electric on the Future of Nuclear Energy

International:

• Hitachi Horizon Takeover Marks A Shift In Technology Direction For The UK
• Nuclear Industry Council Launched to Support the UK Supply Chain
• Wylfa Nuclear Plant: Political Leaders Welcome Hitachi Deal
• AEC Chairman: Kudankulam Nuclear Project To Be Operational Shortly

Lead:

• RWE & E.ON Announce Sale of Horizon Nuclear Power to Hitachi Ltd.

Above the Fold:

• 16 Deaths, 7.5 Million Without Power In Superstorm Sandy's Wake
• Nuclear Plants Shut Down Units, Another Put On Alert As Sandy Pounds East Coast
• NRC: Constellation Shuts Nine Mile One Nuclear Reactor
• Nuclear Plant in N.J. on Alert as Sandy Tests Industry
• NRC Continues to Monitor Hurricane Sandy; Alert Declared at Oyster Creek Plant; No Plants Shut Down Due to the Storm
• ANS Nuclear Cafe: Spent Fuel Pool at Oyster Creek

Opinion:

• James Conca: Don't Politicize Sandy – Hurricane Normal Problem for Nuclear Plants

People, Politics: 

• Georgia, South Carolina Called 'Silicon Valley' Of Nuclear Energy

Business:

• Hitachi Extends Nuclear Push With $1.12 Billion U.K. Deal
• Hitachi Seeking Operator For UK Nuclear Project

International:

• UK Ministers Welcome Hitachi New Nuclear Investment Program
• Finland Builds Nuclear Storage Site As Obama, Merkel Lag
• Japan-Style Nuclear Safety Errors Abound, French Regulator Warns
• China and Japan Hit Nuclear Energy Play Button

Lead:

• Two NJ Reactors in Sandy's Path Likely to Shutter: Others Powering Down

Above the Fold:

• NRC: Dominion Reduces Output Of Conn. Millstone 3 Nuclear Reactor
• NRC: 'Backup Equipment Is Ready To Respond To Any Storm-Related Issues'
• NRC Inspectors Dispatched to Nuclear Reactors in Sandy’s Path
• Hurricane Sandy And N.J. Nuclear Plants: Keeping It Cool In High Winds
• Exelon Nuclear Stations Well Prepared for Hurricane Sandy
• Hurricane Sandy: More Than 100K Already Without Power

People, Politics: 

• Lobbyist Hired By Carlsbad, Eddy County Urging DOE To Pass WIPP Budget

Business:

• AREVA To Appeal CEZ Decision — Ask For Suspension Of Tender Procedure
• CEZ Rejects AREVA's Appeal To Remain In Temelin Tender
• Nuclear Energy Preparing For Retirements, Growth
• Kansai Electric Mulls Increasing Tariffs on Increased Fuel Costs

International:

• Russia Offers To Build Britain's Nuclear Energy Stations in Rolls Royce Partnership 
• UK Delegation Discusses Nuclear, Shale Gas Exploration At Pennsylvania Stop
• Kansai Electric To Submit Interim Report On Whether Ohi Reactor Sits Atop Active Fault
• IAEA Team Tours India Nuclear Plant

By William Tucker

David Brooks has caused a sensation with a column lamenting his loss of optimism about renewable energy amid the crony capitalism it has produced in the Obama Administration.

His jeremiad was touched off by the recent report in the Washington Post that former Vice President Al Gore has managed to garner $98 million out of his concern for climate change.  The former Vice President left office with a net worth of $2 million.  After a decade of investing in government sponsored renewable energy projects, he is now worth $100 million.  Rarely has there been such an example of “doing well by doing good” in Washington

“[Post reporter Carole] Leonnig reports that 14 green tech firms that Gore invested in received or directly benefited from more than $2.5 billion in federal loans, grants and tax breaks,” says Brooks.  In Silicon Valley, they used to say, “This is a $1 billion market.  If we can capture just 1 percent of this . . . .”  According to these figures, Gore managed to capture 8.5 percent of every dollar that went into federal loan guarantees.  Not bad for a guy who lost a tough election.

But the real problem here isn’t renewable energy.  It’s government involvement in the world of investment.  Venture capital is a world full of delicate risks.  The problem is that government has so much weight to throw around, it can’t help being the 600-pound gorilla in the room.  

How much money would you guess venture capitalists offered to fledgling companies last year?  The answer is $20 billion.  Now put that in perspective.  The federal government borrows $3 billion a day just to fund its $1.2 trillion annual deficit.   That means in a week the government is borrowing as much as venture capitalists invest all year.  If it starts throwing even a small portion of its budget into the venture world, it can’t help having an impact.

The Stimulus package dedicated $90 billion to spending on renewable energy projects.  That’s more than four years’ worth of investments from venture capital firms.  But the venture capital world is spread all over the country with thousands of experts making the decisions.  Government spending, on the other hand, is concentrated in one institution, the Department of Energy.  The decisions are narrowed to a much smaller cadre of policymakers and can’t help but become politicized.  The whole process becomes top-heavy.  $500 million in loan guarantees to one company?  That would be unthinkable in the private sector.  

A lot of the enthusiasm for government investment is coming out of the world of pundits and think tanks, where the idea has taken hold that America’s long history of innovation has been a matter of government funding.  Paul Krugman and Joe Stigletz, of course, think the government is the source of all good, but others have joined in as well and President Obama memorialized this with his “You didn’t build that” soliloquy.  

The latest big effort has come from the Breakthrough Institute, a California-based environmental group that actually supports nuclear power but also argues that government investing is the key to all technological innovation.  In a recent paper that has already found its way into President Obama’s stock speeches, Breakthrough tried to argue that it was the federal government and not Texas wildcatter George Mitchell that is really responsible for the innovations that led to the shale gas boom.  

Breakthrough turned up Dan Stewart, a former vice president at Mitchell Energy, who told them:  "They [the Department of Energy] did a hell of a lot of work, and I can't give them enough credit for that. DOE started it, and other people took the ball and ran with it. You cannot diminish DOE's involvement."

But Steward also gave this accounting of Mitchell’s two-decade quest to crack the shale barrier:  

We got the DOE and GRI involved in the Barnett in the early 1990s. [The Gas Research Institute is the private research arm of the gas industry.] Mitchell hadn't wanted to get them involved because we were trying to understand it and didn't want competition for the Barnett until we had a handle on what we were doing.

By the early 1990s, we had a good position, acceptable but lacking knowledge base, and then Mitchell said, "Okay, I'm open to bringing in DOE and GRI" in 1991.

DOE entire participation involved paying one-third the cost of the first horizontal well and contributing to the development of microseismic mapping techniques at the Sandia National Laboratory. "The DOE gave money to the GRI, and the GRI kept DOE updated," Stewart said.  But while the DOE was putting up money here and there, it was Mitchell who bore the brunt of the risks:

Mitchell had the money to invest in R&D. And he had the vision. He had people in the company saying this is bulls–t, this is wasting our money, you're using our retirement money on something that's no good. They'd say, "Dan, if Barnett is the best thing we have, then we don't have s–t."

(As you can see, Stewart talks like a Democrat.)

Interestingly, when CNN did a “fact-check” on Breakthrough’s claims, they found that the federal government had had its own ideas about how to go about “fracking” gas out of shale deposits.  

[O]ne series of tests in the late 1960s and early 1970s raises eyebrows today. In the ultimate "fracking," the U.S. government attempted three times to use nuclear bombs to open up subterranean gas formations in the Rocky Mountains — two in western Colorado and one in New Mexico. The tests produced less gas than predicted, and what was freed was radioactive.

Hmmm, nuclear fracking.  Wonder why the Department of Energy isn’t taking credit for that one?  

The crucial difference between government experiments and private venture capital is that entrepreneurs put their own money at risk while government investors are playing with house money that comes from taxpayers.  A government official may risk demotion or loss of their job for a bad investment (although don’t forget civil service protection), but private investors risk everything.  Therefore their decisions are much more circumspect and don’t involve $500 million commitments.  Nobody but the government has that kind of money to throw around.

In fact lots of progress is being made on renewable technologies, although much of it flies below the radar.  When was the last time you heard anything about fuel cells?  They’re the reverse hydrolysis where hydrogen and oxygen are combined to generate an electric current with water as the exhaust.  Ballard Power Systems, a Canadian company, has been working on fuel cells since the 1980s and is now powering Toyota’s American headquarters in Torrance, California with a hydrogen power pack.  Several auto companies are coming out with new models.  Hydrogen buses have been running in London for several years and students at the University of Birmingham recently built a fuel-cell-powered locomotive.  Hydrogen, of course, can easily be generated from nuclear reactors.

Left to develop at its own pace, renewable energy will make important contributions to make to our energy economy.  It’s the effort to rush the process through huge government investments that creates both the crony capitalism and the biggest disappointments.

By William Tucker

The New York Times’ ever reliable anti-nuclear reporter Matt Wald has taken the closing of the 550-MW Kewaunee nuclear reactor in Wisconsin and spun it into a tale of an aging fleet that will soon be seeing lots more closings because of adverse economics. 

“The conventional wisdom about nuclear reactors is that they are expensive to build but cheap to run,” begins the story, entitled “Aging and Expensive, Reactors Face Mothballs:”

But electricity on the wholesale market is so inexpensive, its price depressed by cheap natural gas, that some reactors may not have enough revenue to justify needed capital expenditures. Experts say that as a result, the nuclear industry may be nearing its first round of retirements since the mid-1990s.

This indeed would be depressing news, wouldn’t it?  But is it true?    

Wald’s conjecture rests on three premises:

1. High maintenance costs to reactors, coupled with low gas prices, are making existing reactors uneconomical.  “According to an internal industry document from the Electric Utility Cost Group, for the period 2008 to 2010, maintenance and fuel costs for the one-fourth of the reactor fleet with the highest costs averaged $51.42 per megawatt hour.  That is perilously close to wholesale electricity costs these days. “
2. Wind energy is so cheap that it is also undermining nuclear.  “Christopher Crane, the chief executive of Exelon, the nation’s largest nuclear operator, said his company’s reactors sometimes found themselves selling electricity at hours when the market price was negative, driven below zero by a surplus of wind energy late at night during periods of low demand.” 
3. Reactors are very much like old coal plants now being driven into retirement by gas prices and EPA regulations.  “Bruce E. Biewald, the chief executive of Synapse Energy Economics, a consulting firm in Cambridge, Mass., compared the nuclear plants to old coal plants now facing big capital expenses. The cost of new pollution control equipment has coal companies `writing off hundreds of millions of dollars right and left,’ he said. Much the same is now true for nuclear plants.”

Let’s take that last point first.  The country’s oldest reactors may be turning 40 but almost one-third of the nation’s 600 coal plants are more than 50 years old.  The Sixth Street Generating Plant recently retired in Cedar Rapids was built in 1921.  Another coal burner in the District of Columbia recently converted to natural gas was built in 1910.  Nearly all the coal plants scheduled for retirement are beyond the half-century mark.   

But it isn’t just age that is forcing these plants out of business.  Because they were built so far back, none of them have pollution controls.  Most were grandfathered in under the Clean Air Act of 1970 and have sailed along for 40 years polluting in the same old way.  The Clinton Administration fought a long battle trying to have these plants classified as “new sources” when they made major repairs such as replacing an old turbine.  This would have required them to meet new pollution standards.  For the most part, the Clintonites lost.  Only now that the EPA is enforcing new rules for cross-state pollution, mercury and carbon emissions are they finally being forced to make major improvements.  Not having any emissions to worry about, nuclear has none of these problems.

So what about those gas prices?

Gas prices are indeed extraordinarily low and have forestalled most new reactor construction.  Since building a reactor is still a ten-to-fifteen-year magical mystery tour through the Nuclear Regulatory Commission, there isn’t any point in investing $10-15 billion to compete with $2.50 natural gas.   But these gas prices are temporary one at best.  We are going through a very unusual period where fracking technology has created a glut while major markets have not yet developed.  Natural gas is now fetching $11 per mcf in Japan and companies on the Gulf and West Coasts are scrambling to build export facilities.  This will take at least five years to build and there may be political resistance but at some point the domestic and world prices will come more in line.  Natural gas may also end up powering vehicles.  Several auto companies have models running on compressed natural gas and the Fuel Freedom Foundation is pushing to have all cars converted to flex-fuel so they could run on fuels such as methanol, which can be manufactured cheaply from natural gas.  One way or another, $2 gas is a temporary phenomenon.  There is no chance the huge gap between oil and gas prices will survive the next decade.  If you’re a utility executive you have to think in these terms.  Eight years ago one-third of the nation’s gas generators were sitting idle because gas cost $8 per mcf.  No one is going to retire their nuclear reactors on the bet that it can’t happen again.

So what about those windmills?  Well, wind is certainly causing havoc in the utility industry.  For several years analysts have been predicting that windmills would make life extremely difficult for any kind of generation that couldn’t easily be ramped up and down – which means nuclear.  There are indeed instances where nuclear and other forms of generation are being forced to accept negative pricing because the wind is blowing somewhere.  But any sane system wouldn’t allow this to happen for very long.  Wind should be charged a premium because it is non-dispatchable and can’t be counted on from one hour to the next.  But political pressures to develop more wind – plus the production tax credit, which makes windmills profitable even if they generate no electricity – make this difficult.  All this hurts nuclear and others forms of generation as well. So yes, in a few instances the advantages given to wind may drive one of two marginal reactors out of business.  But people are going to be awfully sorry if major nuclear providers are retired and the wind stops blowing because be nothing to replace them.   

Political pressures may force a few reactors to close in hostile territories such as New York and Vermont.  So will a few plants such as Crystal River, which have suffered major damage.  But when Wald compares reactors to “old coal plants now facing big capital expenses,” it turns out he means capital costs for major uprates, which doesn’t involve major expenses.  Even Matt Wald finally admits this in his closing paragraphs: 

The stress [on reactors] comes after a decade of remarkable stability for the nuclear fleet, which, contrary to the expectations of some of its opponents, has shown some signs of prosperous maturity. According to industry statistics, 71 reactors have received permission to operate up to 20 years beyond their initial 40-year operating licenses and the applications of 15 more are under review. Another 17 have announced their intention to seek renewal, leaving only one with unannounced intentions.

In addition, engineers have reanalyzed existing reactors, made some minor adjustments and coaxed another 6,200 megawatts of capacity out of them, equal the output of another six or so reactors. Another 2,700 megawatts of “uprates” to increase the maximum power level at which some plants may operate are in the Nuclear Regulatory Commission’s approval pipeline. But Mr. Crane [of Exelon] said electricity prices were now so low that his company was re-evaluating whether it was still worthwhile to invest more in uprates.

Postponing an uprate and closing down a reactor are hardly the same thing.  Exelon’s fleet and others still have another few decades left in them.  That’s the real story.

*

By William Tucker

Greenpeace is without a doubt the most successful public relations firm in the world.  Every time you turn around, they are in the news.  Whether it's scaling the cooling towers of coal plants or hanging banners off the House of Parliament, the organization is one long photo op.

They have learned the first lesson of marketing.  You don't get anywhere unless you grab the public's attention.  Once you've done that, deliver your message in simple graphic form that is easily digested and long remembered. Have you ever noticed how when a radio or TV show wants you to call a number, they repeat it thee times.  I said three times.  That's three times.  That's what it takes to get through to people's consciousness.  And that's the lesson Greenpeace constantly invokes – constant repetition of a simple message, with periodic variation for novelty.

Much of this, of course, is aimed against nuclear.  Two weeks ago a contingent of 70 Greenpeace activists invaded a Swedish reactor to prove, I suppose, how a terrorist commando team might do it.  Most of them were arrested immediately but a few managed to hide out on the roof for a night, proving – what?   That if they had been armed with armor-piercing cannons they might have been able to breach the containment?  Oh well, it made good TV, which is the whole point.  

At the same time, another Greenpeace contingent was arrested while trying to enter South Korea to hold a seminar on the dangers of nuclear energy.  Korea, as you know, has adopted nuclear as the national technology and doesn't cotton to having foreigners coming in to try to undermine their economic success.  But there's nothing like a couple of arrests to keep a protest movement going and so we'll probably be hearing more about that one as well.

Now I have no doubt that Greenpeace is sincere in its abhorrence of nuclear.  I once interviewed Jim Riccio and a couple of Greenpeace executives at their headquarters in Washington.  Somehow they got the idea that I wanted to hear their spiel on the horrors of nuclear – probably because they had never met a reporter who didn't.  So when I started out the interview by asking, "What's wrong with nuclear?" all three of them jumped out of their chairs in horror.  

"What's wrong with nuclear?" they screamed at me.  "Did you ever hear of nuclear bombs?  Don't you know about Hiroshima and Nagasaki?". As with all dedicated activists, they make no distinction between bombs and electricity, which makes you wonder why they aren't trying to crash the party in North Korea instead – except that might be playing a little too much with fire.  

So there's no doubt Greenpeace's has a flare for drama.  One good publicity stunt is worth a thousand position papers.  But why shouldn't there be a little room for drama in SUPPORT of nuclear as well?  

Probably the key factor in people's inordinate fear of nuclear, for instance, is the "no safe dose" hypothesis, which says that even the tiniest exposure to radiation can kill you. Everyone in the health physics field knows this is not true but is afraid to say so for fear of being branded a "tool of the nuclear industry.". So how about a little dramatization?  Here are  few suggestions:

As Ted Rockwell and others have pointed out, the levels of radiation in the evacuation zone around Fukushima are no higher than they are in parts of the world that have unusually high levels of background radiation, such as the Ramsar region of Iran.  So how about an international delegation of nuclear scientists trooping off to Japan and demanding to be allowed to spend a week camping out in the evacuation zone?  If they get blocked by the authorities or arrested in the process, well so much the better.  Nothing succeeds better in demonstrations than a mass arrest.

The most dramatic evidence to date of the hormetic effect of small radiation doses has been the Taiwan apartments where 1800 people were accidentally exposed to radioactive cobalt in structural steel over 20 years and turned out to have a 96 percent reduction in cancer rates.  How about a big publicity stunt at the apartment complex – hanging a "Cancer-Free Zone" banner on the side of the building for the press to photograph?  

There are reports that wildlife is flourished so much in the Chernobyl evacuation zone that some rare species have now turned up that had all but disappeared from Europe.  How about capturing a few of them and bringing them back to Berlin or New York and putting them on display as the "Chernobyl Zoo?". Invite scientists to check them out for signs of excessive genetic damage or cancer.

Denver and the Rocky Mountains have the highest rates of background radiation and the lowest rates of cancer in the country, while New Orleans and the Mississippi have the lowest background and the highest rates of cancer.  Without doing New Orleans any disservice, how about holding a national drawing with a "Cancer Reducing Vacation to the Highly Radioactive Rocky Mountains" as the prize.

And while we're on the subject, several converted uranium mines out west are still struggling to make a living as health spas – a tradition that goes back to the Romans and high-radiation sulfur springs.  I visited one a few years ago – the Free Enterprise Radon Mine in Boulder, Montana.  There I met a clientele that had been coming back for twenty years and swore it had improved their health – even though they've been absorbing 40 times the EPA's "level of concern" for radon gas.  Their once thriving business has been decimated by the EPA's ridiculous assertion that radon exposure in homes is causing 20 percent of lung cancers.  (Something as uninspiring as cigarette smoke has no interest for the EPA.). Those mines could use a little publicity themselves.

Finally, since Greenpeace is so fixated on the idea of terrorists could invade a commercial reactor and melt it down, let's do this.  Almost every reactor in the country has a simulator that exactly mirrors the operation of the reactor.  Let's invite Greenpeace into one of those simulators and give them 24 hours to show exactly how they would override all the safety mechanisms and push the reactor to go into a runaway mode.  Then they can spend all the time they want trying to convince people there's something inherently vulnerable about a nuclear reactor.

Now I realize that all these efforts would cost money.  Greenpeace International gets huge donations from rich people all around the world.  It has 1000 staff employees, 43 different offices around the world and an annual budget of $150 million – half again as large as the World Health Organization. This is no small-time operation.  Yet they've had the monopoly on publicity stunts for as long as anyone can remember.  It's time to try running the ball the other way.

By William Tucker

The first bills for Germany’s campaign to give up nuclear power have come due and they are not pretty.  

This week the country’s four major grid operators announced a rate increase of 47 percent, from 4.5 cents per kWhr to 6.7 cents per kWhr next year in order to cover the costs of buying from renewable sources.  In addition, consumers will begin paying a value-added tax and higher fees for network access by utilities. All this is going to cost the average family of four about $325 per year.  

And that’s just the beginning.  Renewables are barely halfway to the goal of getting 40 percent of its electricity from renewable energy by 2020.  (The current 25 percent figure is highly dubious since not much of the old stuff has been shut down and new coal plants are actually being added to keep the lights on.)  Germany already pays the second highest electrical rates in Europe, almost twice what France pays with its 70 percent nuclear.  (Just who’s #1 we’ll get to in a moment.)  German industries are already complaining they won’t be able to compete anymore in the world market.

How many times do we have to go through this?  It has become clear over and over that renewables are hopelessly expensive and will likely remain so for the foreseeable future and beyond.  The only way they can survive is through ham-handed renewable mandates and extensive government subsidies.  

Spain paved the way to its current financial meltdown by deciding to become the “solar capital of the world” in the middle of the last decade.  The government subsidized a huge homegrown industry, with whole new towns springing up around new manufacturing plants.  The whole enterprise lasted about five years until high electrical rates started driving industries to France and the government ran out of money.  The subsidies disappeared and the entire industry collapsed, leaving ghost towns in its wake.  By the time it was over, Spain was on the critical list of Europe’s ailing economies.

Denmark has littered the landscape with windmills so that it is hard to go anywhere in the countryside without being in sight of a 40-story whirling tower.  The country claims that wind to provide 20 percent of its electricity but this is deceptive.  Wind generates a 20 percent equivalent of Denmark’s electrical needs, but only about half of this is actually consumed in Denmark.  The rest is dumped into Sweden and Germany at giveaway prices, leaving wind’s actual grid contribution at only 5 to 10 percent.  All this is made possible only because neighboring Sweden has lots of hydroelectric power available for immediate backup when the wind dies.  Norway also has lots of pumped storage to handle Denmark’s surpluses.  The result of all this is that Denmark is the only county with electrical rates higher than Germany.

The U.S. wind industry has experienced a similar boom built solely around the production tax credit.  This subsidy makes it profitable for large companies to put up windmills even if no electricity is ever sold.  Enron was the nation’s largest owner of windmills until it collapsed.  Later the Marriott Hotel chain became a major player.  Wind has also proved the easiest way to meet state renewable mandates and 80 percent of the generation built to satisfy these requirements has been windmills.  None of this is economical, of course, and is simply forced upon grid operators.  

Any sane grid operator would charge a huge premium for wind’s unpredictability, but of course this has been disallowed.  In fact, it’s the opposite.  In many systems, grid operators are being required to buy wind in preference to anything else, despite the disadvantages and costs.  Fossil fuel boilers are worn out by revving them up and down in order to accommodate wind’s vagaries.  The Bonneville Power Authority has been forced to accept wind even if it means adjusting hydroelectric dams to the detriment of migrating salmon.  One environmental fad follows the next and all this is done because wind supposedly represents the future.  Yet the whole industry now faces collapse because Congress has finally refused to extend the production tax credit.

Our own domestic version of Germany and Spain is California.  The Golden State created the California Electrical Crisis of 2000 by refusing to build anything medium-sized small industrial co-generation plants and pitifully small renewable projects from 1980 to 2000.  Since then it has stampeded into natural gas, so that 45 percent of its in-state generation now comes from this one source, double the national average.  Californians pay twice as much for electricity as surrounding states and Governor Jerry Brown is now wrestling with an annual budget deficit of $30 billion and a total state debt of $1/2 trillion.   Spain, with a 25 percent more population, has an annual deficit of $46 billion and a total debt of $1 trillion.  

So is anyone learning a lesson from this?  Heck, no.  This week Secretary of the Interior Ken Salazar announced the creation of 17 “solar zones” in six Western states – California, Arizona, Colorado, Nevada, New Mexico, and Utah.  Over 400 400 square miles of land will be covered with photovoltaic panels and high-gloss mirrors to generate 23,700 megawatts of electricity – when the sun shines.  Hundreds of miles of transmission lines will be required to bring it to population centers.  The power will probably cost twice as existing sources but utilities will either be mandated to purchase it (they already are in California), passing the costs along to customers, or the government will step in with the inevitable subsidies.  It will probably require all of Mexico to keep these 400 square miles of mirrors and panels clean of desert dust and sand.  

The Germans are already beginning to wonder if their nuclear phobia hasn’t been exaggerated.  In the vast reaches of the Southwestern desert, it may take a little longer to learn the same lesson.

By William Tucker

Last week the all-electric Tesla Model S and a gasoline-powered BMW M5 squared off at the Gingerman Raceway in South Haven, Michigan for an old-fashioned 0-to-100 mph drag race.  

The BMW, with a twin-turbo 4.4-liter V8 engine that cranks out 560 horsepower and 500 pound-feet of torque, was the clear favorite over the Tesla, whose 416 horsepower packs 443 pound-feet of torque.  To everyone’s surprise, however, the Tesla sprinted off the starting line and gained a car-length lead.  Although the BMW seemed to be catching up at the end, the Tesla was the first across the finish line.  

The result may have an impact on the President Election.  Why?  Because in his criticism of President Obama in the first debate, Mitt Romney listed Tesla among the “losers” in the President’ green portfolio.  The Tesla isn’t exactly a loser.  But unless nuclear gets into the picture, it may not turn out to be a winner, either.  

The Tesla is the brainchild of a group of Silicon Valley entrepreneurs who became so confident of their success in the last decade that they decided to tackle the auto industry as well.  Elon Musk, co-founder of PayPal, was the lead investor with Silicon Valley stalwarts Martin Eberhard, Marc Tarpenning and Ian Wright and JB Straubel in tow.  The idea was not only to develop a new car but to use Silicon Valley marketing techniques, aiming a luxury product at affluent “thought leaders” and then using this as a foothold to move down market into the consumer mainstream.  Musk provided most of the early investment and in 2006 he was joined by Sergey Brin and Larry Page of Google, former eBay president Jeff Skoll, Hyatt heir Nick Pritzker and the venture capital firm of Draper Fisher Jurvetson in a $13 million round. 

By 2007 private financing had provided $107 million, but the big enchilada came from the U.S. Department of Energy, child authorized a in a $465 million loan in 2009.  The money was not part of the auto bailout or the stimulus fund but came from a 2007 loan program for more fuel-efficient vehicles created by President George Bush, Jr.  By 2010, Tesla had sold 2500 models of the $94,000 Tesla Roadster and was claming profitability. In 2011 it introduced the $54,000 Model S – the on that beat BMW – and next year it is scheduled to start producing the $40,000 Model X, which will bring it into the mid-price range.

Tesla’s success in besting the M5 is sure to raise its profile.  But the question remains whether the federal government should be subsidizing a company whose main product so far has been a $94,000 sports car aimed at the very rich?  The Fisker, another EV experiment that also received Department of Energy funding, faced the same problems.  The company’s first model, the $104,000 Karma, was manufactured in Finland.  Fisker was supposedly ready to start manufacturing the down-market $40,000 NINA in Delaware earlier this year when things fell apart.  This was a legitimate “loser” also mentioned by Romney.  Whether Tesla can make the transition more successfully remains to be seen.  

But a lot has changed since 2006 and the whole future of the electric car is now being subject to question.  The Chevy Volt and Nissan Leaf have both sold miserably, with the Volt halting production for a time last month.  Last week Toyota scaled back its plans for a new electric model and said it will instead concentrate on the Prius – now the fourth best-selling car in the world.  And A123, the Wisconsin battery maker for the Volt, which also received $240 million in stimulus money, is now being rescued by renowned Chinese billionaire Lu Guanqiu.  Many people are starting to argue that compressed natural gas and fuel-cell vehicles running on hydrogen now look like a better bet.  

But an even bigger potential challenge emerged last month when researches at the Norwegian University of Science and Technology published an article in the Journal of Industrial Ecology questioning the whole EV enterprise. Electric cars, they wrote, "exhibit the potential for significant increases in human toxicity, freshwater eco-toxicity, freshwater eutrophication, and metal depletion impacts, largely emanating from the vehicle supply chain."  The problem is batter manufacture, which is energy intense and depends on lithium, copper and several other metals that must be mined.  Moreover lithium-ion batteries, unlike the old lead-acid variety, cannot be recycled, which creates a huge disposal problem.

The study did report a 24 percent decrease in the release of greenhouse using the current European fuel mix.  But in a controversial posting on Seeking Alpha, investment specialist John Petersen has extended the study by pointing out that it only looked at the 24-kilowatt battery pack, which provides a driving range of only 100 miles.  The 40-kilowatt battery breaks even and the 60- and 85-kilowatt units – which provide the 200-300 range that customers will obviously prefer – actually increase carbon dioxide output by up to 30 percent.  Petersen calls this “front-loading the carbon emissions.”

The conclusion brings to the fore the problem with so many “clean, green renewable” that rely on the electric grid.  Without nuclear, they remain as carbon-intensive as ever.  The electric car is a perfect example.  We are simply replacing oil with coal and natural gas.  The same thing emerges with energy storage.  The assumption is that if we develop commercial-scale storage technology – compressed air, liquid air, or giant batter complexes – it will improve the employment of wind and solar energy.  But as Bernard Cohen pointed long ago, storage works just as well for nuclear.  If commercial-scale storage were to be developed, it would allow us to carry over excess nighttime nuclear generation into the daytime.  This would be far more beneficial in replacing coal and gas than the smaller, intermittent contributions of wind and solar.  A national fleet of batteries in electric cars would benefit from nuclear in the same way.  

The advantages of nuclear power are so extraordinary that it they are constantly made plain in the marketplace.  Just look at Japan and Germany’s stumbling efforts to get rid of nuclear to see it in action.