Offshore wind beats nuclear on costs too

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Wind energy has been caught in the shadow of nuclear power during political discussions on emission free electricity generation to combat global warming. One new report now concludes that wind power should be the main actor in clean climate strategies. Wind is not only more benign environmentally, says the report, but it also costs less in the short term and is far more promising economically in the long term.

Using Japan as a case study-a country with limited land suitable for wind development and which has one of the world's largest and most ambitious nuclear programs-the report finds that offshore wind farms could generate electricity at almost half the cost of "breeder reactor" nuclear plants that use plutonium. The report, "Wind Power Versus Plutonium: An Examination of Wind Energy Potential and a Comparison of Offshore Wind Energy to Plutonium Use in Japan," was issued in mid January by the Institute for Energy and Environmental Research (IEER), a small non profit group of scientists, based in Washington.

"The situation for plutonium relative to wind power in Japan is about as favourable as it can be," says to Marc Fioravanti, author of the report and a consulting engineer with IEER. More than a quarter of Japan's electricity is generated from nuclear fuel, while there is only about 40 MW of wind in the ground. The government's long term electricity goals call for installed nuclear capacity to be increased by 28,000 MW by 2010, to a total of 70,000 MW. But "offshore wind energy is much more economical than the use of plutonium as a fuel in Japan's nuclear reactors," Fioravanti says. He bases his research partly on preliminary projections of Japan's offshore resources as well as data gathered from various wind projects in Europe.

Fioravanti notes that although his analysis is based on Japan, it can be applied to other countries because the cost of plutonium is similar worldwide. "Wind energy could play an important role in the energy supply of many countries, including those that have large greenhouse gas emissions-namely western Europe, the United States, China and Russia," he says. Indeed, nuclear's prospects for retaining a significant share of worldwide electricity generation are uncertain. Growth is optimistically projected at 2.7% a year in total electricity demand through 2020. But this includes programs which have already stagnated. Over the long term, only the developing nations and Japan are projected to have net additions. In other regions, countries that are operating older reactors and have other more economical options are expected to let their nuclear capacity fade as current units are retired.

The IEER report comes as the nuclear industry, as well as many traditional energy officials, are promoting nuclear and plutonium as a crucial "low emissions" component in the fight against greenhouse gases. Last autumn the World Energy Congress, the largest energy industry organisation, focused on global warming at its annual meeting for the first time, concluding that nuclear power is better positioned than renewables to play a major role in that battle (Windpower Monthly, November 1998).

Plutonium is seen as a key nuclear fuel of the future because high grade uranium ore is becoming increasingly difficult to find and because spent nuclear fuel also contains a high proportion of plutonium. In Japan's near term energy strategy, plutonium will be used in two nuclear plants starting this year and in another 16 to 18 plants by 2010. In these plants, the plutonium is in a form known as MOX-mixed uranium oxide and plutonium oxide. If plans stay on schedule, Fioravanti finds that using MOX will be about 40% more costly than offshore wind.

save two billion

Generating electricity from offshore wind plants instead of power stations that use MOX would save Japan hundreds of millions of dollars or even as much as $2 billion by the year 2010, the report says. Some 12,000 MW of wind can be developed in Japan to generate the same amount of electricity as MOX, 39 TWh per year. Another recent study suggests that the winds off Japan's coasts could generate up to 40% of the country's energy needs (Windpower Monthly, February 1999).

The IEER report estimates that in Japan the projected costs of offshore wind should be about the same as on a moderate land site-below $0.06/kWh. Electricity generated from MOX in today's nuclear reactors costs $0.07-$0.08/kWh, or possibly more. Breeder reactors are not established commercially, but their output will be about twice as high as from current nuclear plants, the report estimates, from $0.11/kWh to as much as $0.15/kWh.

"It is time to leave plutonium behind in the century in which it was created," says IEER's Arjun Makhijana, noting that "tens of billions of dollars" have been poured into nuclear development in Japan. Makhijana, who holds a PhD in nuclear engineering, is the author of two books, "Nuclear Wasteland" and "Mending the Ozone Hole." "IEER's analysis shows that wind energy is a significant part of the answer to a better energy future." He says that even after five decades of development, plutonium is still not a mature technology, and that cost projections for breeder reactors continue to rise.

Meanwhile, he says, wind costs will likely continue to decrease as demand rises and as large scale production is established. He cautions that current technology for offshore plants is limited to relatively shallow water, and tapping offshore potential more fully will depend upon technology development. Fioravanti argues that the increased cost of offshore construction and connection to transmission lines on land are likely to be largely offset by more favourable winds, lower site acquisition costs, and reduced environmental impacts. Indeed, other studies have found the rate of fall of wind energy's cost by 2006 to be significantly steeper than that for all the thermal technologies (Windpower Monthly, February 1999).

Lyn Wallace of the American Nuclear Society says that while IEER's estimate for the cost of MOX is reasonable, the cost of plutonium is not so easy to gauge because no breeder plants are operating commercially outside Russia. Wallace also says that 70% of the cost of a nuclear plant is in building it, and that 30% of that cost is interest. Thus if the cost of the fuel increases, there is little effect on the cost of the plant. But plutonium's future is in grave doubt, the IEER report says. It notes the nuclear industry's technical problems and accidents-from the closure of the world's largest breeder reactor in France to the likelihood that the new German government will cancel commercial contracts for plutonium separation for breeder plants.

The report scolds Japan, which has little in the way of indigenous fossil fuel, for not developing more wind power. "Its expenditures on plutonium have been hundreds of times larger than on wind energy development-a difference that cannot be justified based on the experience of these two programs or on the potential of these two resources," says the report. Further spending of ratepayer and taxpayer resources on electricity from separated plutonium, including costs on reprocessing the fuel, are "unjustified and represent a gross misallocation of energy development money," concludes the report.

Peter Evans, a Japan expert at Cambridge Economic Research Associates, notes that Japan's energy policy would have to change profoundly before the IEER scenario is possible. He says it has been almost impossible for wind to compete in the three rounds of solicitations that have so far been held since deregulation was started three years ago. Major companies already have land and environmental permits and it is those companies that are submitting the winning bids. Most are planning fossil fuel power plants. The country's nuclear industry is huge and has political clout. He notes, too, that offshore wind might not be so straight forward as anticipated. Japan's powerful fishing industry has been successful in getting compensation from the nuclear industry and would be likely to get similar reimbursement from offshore wind.

Moving it forward

The IEER recommends the use of hydrogen as an energy carrier in the long term for various technical and environmental reasons, in particular energy self sufficiency. On the basis of present costs and projections, hydrogen derived from wind energy is far superior economically as well as environmentally to that derived from plutonium.

On the global level, the report advocates that the International Energy Agency and the UN Environment Program, in collaboration with national governments and other agencies, undertake a comprehensive survey of global offshore wind potential. Given the need to reduce greenhouse gas emissions, government policies should be aiming to create a long term stable market for wind energy.

In Japan, there are some glimmers of hope for renewables. Recently, the Central Research Institute for the Electric Power Industry, the country's utility research group, expressed an interest in green power. The fact that the Kyoto treaty was inked in Japan also bodes well, symbolically, for clean energy. The government has technically established a strong role for renewables in the country's energy future-although Japan officially characterises nuclear power as a "renewable." Now more than ever, it could ultimately be the issue of cost that determines the energy mix. Before the recession and with demand growth of as much as 4-5%, energy security was the highest priority, says Evans. According to the IEER report, the priority now is bound to be efficiency and cost consciousness-and that is a good omen for wind.

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