Better living through nuclear energy
07 December 2016
Significant social and industrial development are fundamental added values that come when bringing in nuclear power to a country keen to advance, writes Luis Echávarri in an open letter responding to the cancellation of Vietnam's nuclear program.
After more than forty years of experience in the energy sector and as an expert in energy policy and especially in nuclear energy policy, I write to you regarding the recent decision to cancel the nuclear power program that Vietnam had been planning for several years. With full respect for the decisions that the Vietnamese institutions take on energy policy, I think it could be very useful to consider the added value that a nuclear program could bring to Vietnamese society.
Energy in the form of electricity is the foundation of economic and social development of all societies, and to establish an appropriate electricity infrastructure is an essential element in order to fulfill the aspirations of Vietnamese society for the future. International experience on energy policy implies consideration of balance between three basic elements: diversification, economics and environmental protection. Nuclear power is very well placed to satisfy these criteria.
Nuclear power contributes to the diversification of electricity resources because it is an additional type of electricity and it is totally independent from other sources. Uranium, the basic element necessary for producing nuclear power, is very abundant around the world with producer countries of very different characteristics. Taking into account the world annual consumption of uranium and the prospects for new build, the identified and inferred resources of uranium are enough for the coming two centuries at least. If the extra resources from technologies such as reprocessing and breeder reactors are added it is clear that there will not be any scarcity of this resource for an even longer timeframe. Additionally the price of uranium is not linked to the price of any other energy commodity.
Regarding economics, although the initial investment is very high, the cost of the electricity produced by nuclear reactors is, in most countries, very competitive with other electricity resources for those nuclear technologies that have already been proven. While renewable energies are intermittent and significantly more expensive than fossil or nuclear fuels, the real competition in economic terms for baseload electricity is between gas, coal and nuclear power.
New reactors are designed for 60 years of operation with a stable level of cost during this very long period of time. This is due to the structure of the cost of the electricity produced. If we compare the structure of the cost of a kilowatt-hour from a nuclear power plant with the same produced by a gas station we will see that in the case of nuclear power the cost of the necessary resource, uranium, is only about 5% of the total cost while the necessary gas is about 60% of the total cost. This implies that if the cost of uranium during that period doubles, the cost of a kilowatt hour is increased by a mere 5%, while in the case of a gas station a doubling of the price of gas implies an increase in the price of the electricity generated of more than 50%. For coal stations these figures are between nuclear and gas.
In relation to reducing emissions of carbon dioxide in order to prevent climate change, an essential element of energy policy today, especially after the Paris Agreement, the real competition is between renewables and nuclear power. These electricity sources are both carbon free in their operation and therefore both contribute to avoiding climate change in the electricity sector. It is important to consider that renewable energies and nuclear power do not compete between themselves because their characteristics are very different. Renewable energies are intermittent and therefore not useful for base load electricity generation. Additionally, since they are as capital intensive as nuclear power (per installed kilowatt), renewable energies are much more expensive since their operating hours of 2000-2500 per year on average are far fewer than the 7500-8000 per year that new nuclear reactors achieve.
As some key Asian countries such as China and India are doing, the conclusion of the above considerations is that a good balanced energy policy for electricity generation uses coal and gas when prices are reasonable, develops a renewable energy program to fight climate change, and develops nuclear power to enhance security of supply while fighting climate change. If this is the case, the key objectives of a rational energy policy - diversification, economic competitiveness and preventing climate change - will be met very well.
Spinoff effect
But these considerations are only part of the contribution nuclear power can give to a society that aspires to improve its economic and social development significantly in today's world. The most important contribution of nuclear power to a society like the Vietnamese one is the formation of a network of very well-qualified scientists and engineers that will increase significantly the technological capacity of the country in many sectors.
The development of a stepwise nuclear program implies, through the localization of many related activities, the co-development of local industry in areas such as construction, fabrication of components, engineering, safety and security, quality control and quality assurance, to the most stringent industrial requirements that exist today. The organizations, institutions and companies related to the nuclear program would benefit significantly from this experience, increasing their technology and their capacity to compete, producing at the same time a spinoff effect that would increase the capacity of many other industries of the country in other fields. I think that this effect that a nuclear power program produces, in addition to the generation of electricity, is a fundamental added value.
All these considerations are based on personal experience in my home country, Spain, where the development of a nuclear program has been a key factor for developing a very significant industrial sector, as well as on my personal experience as Director General of the OECD Nuclear Energy Agency during many years of collaboration with the most developed industrial countries. Based on this experience I think that in the case of Vietnam - a country that needs to develop its industrial sector significantly to compete in international markets - a nuclear program such as the one originally foreseen at the Ninh Thuan site could be the key element for improving significantly the welfare of Vietnamese society in the future.
Luis Echávarri
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Luis Echávarri was Director General of the OECD Nuclear Energy Agency from 1997 to 2014