The Fukushima Meltdown and the Global Renaissance of Nuclear Energy

Martin Schulz
Senior Research Fellow

March 23, 2011 (Wednesday)

The Fukushima Meltdown and the Global Renaissance of Nuclear Energy

Never before has a nuclear power plant exploded in front of the eyes of the world. This, and the fact that it has happened in one of the most technologically advanced countries with a sterling reputation for reliability and safety will certainly cause a major setback for the development of nuclear power as a low-carbon technology.

Japan’s nuclear disaster struck at a time of international renaissance in nuclear power generation. Major emerging countries, with China and India at the forefront, were counting on the technology to better balance their huge energy needs while keeping CO2 emissions as low as possible. Developed countries have unearthed their mostly dormant nuclear development plans in order to use nuclear power as a “bridge technology” until sustainable alternative energy sources are widely available and more cost-efficient. On the industry side, companies have advanced technologies towards scalability that would allow a much wider use of micro-reactors as on-site power sources. Governments in Europe, the US and Japan have included nuclear power technology in their national strategies to support (and sell) infrastructure development in emerging countries (along with high-speed trains and medical technology). They provide public credit guarantees and have extended the range of public R&D on nuclear power generation.

The nuclear disaster at Fukushima will not only cause many of these plans to be put on the backburner, it will most likely stop the expansion of nuclear power generation in many countries, including Japan and the USA, and restart a major debate about the safety and controllability of nuclear power anywhere. These debates will have to take a wide range of factors into consideration, including national security strategies, the availability of other power sources, and the problems with traditional power sources such as coal, which produce all sorts of hazardous emissions too. The debates will also evolve very differently along the lines of historical experiences with hazardous technologies and the ability of governments to control technology and industry in general.

This “current topics” article will therefore provide a short overview of the main factors that might influence the debate – starting with the “irrational side” of risk perception, before further investigating additional challenges in emerging countries and the direct lessons to be learned from Fukushima.

Extremes of Nuclear Risk Perception: Opposing Poles in Neighboring Germany and France

To assess the scope of the evolving debate around possible lessons of Japan’s nuclear disaster, it is worthwhile to first focus on the most extreme positions concerning national nuclear power strategies. At one end of the nuclear power sustainability debate stands Germany, where the population is very reluctant to accept risk scenarios that only account for the “known unknowns” (in the words of former US Secretary of State Rumsfeld). The German public regularly discounts expert advice and government conclusions on the safety of nuclear power, and remains concerned with unforeseen risks of a technology that “cannot be controlled.” At the other end of the debate stands Germany’s direct neighbor, France, where nuclear power is the main pillar of national energy strategy. The French public has rarely questioned this strategy, even during earlier incidents such as Chernobyl. Where do these differences come from?

Germans are certainly still very aware of the nuclear disaster of Chernobyl in 1986, which blew a radioactive plume over the country and left significantly elevated radioactivity levels in some regions and foods that remain even today. But the skepticism seems to be much more deeply rooted than this. An important reason might be that German’s have learned through hard experience that “unthinkable,” or “black swan,” developments can materialize almost as easily as foreseeable obstacles. Every student in Germany has to try to relate the horrors of the holocaust that Germany brought into the world with the peaceful, often pacifist, society they live in. Since this is almost impossible, they seem to wonder: if a national strategy can bring the holocaust to the world, perhaps it can bring nuclear Armageddon too?

Another reason seems to be political. France has a much more centralistic organization than Germany. In France, a strong central bureaucracy is able to guarantee strict oversight of the nuclear power industry while it also seems to be quite capable of silencing local discontent before it turns into a national debate. In Germany, strong federalism and regional devolution turn every single power plant into a political issue with possibly nationwide repercussions.

And finally, the German debate stresses the importance of independent and self-reliant energy production much less than France; Germany does not even seem to feel too uncomfortable with its high dependency on Russian gas imports. As a major international trader with a central role in Europe and very limited military might, Germans seem to have accepted their dependency on international energy sources more than others.

For these reasons, ten years before Fukushima, a German social democrat government had already decided to shut down all nuclear plants by 2021. But necessities of electricity generation are catching up fast; the country, after all, still produces 29% of its electricity at nuclear power plants (as much as Japan). Necessities of CO2 reduction and related costs, as well as a relatively long accident free stretch in nuclear power generation, allowed the current government to extend the lives of existing plants by an average of 12 years. Immediately after Fukushima, however, in an about face, the government reversed this decision again. It has put all nuclear industry plans on hold for a three-month moratorium and will probably terminate its seven oldest plants after that. This back and forth in a country that has a stable government and few particular risks for nuclear power generation, such as earthquakes and tsunamis, shows how emotional and unrelated to actual risks the debate about nuclear power (risks) can become.

At the opposite side of the debate about the sustainability of nuclear power supply stands France. Perhaps no other country in the world is more “nuclear” than Germany’s direct neighbor. More than 75% of electricity is produced by nuclear power, and every French person is said to live within 150 miles of one of the 58 reactors (four more than in Japan, whose population is more than twice France’s). Even during the Chernobyl crisis, France did not encounter any major questioning of its nuclear power strategy, and the government is anxious to keep it that way.

But the French government is well aware that keeping the public’s trust in a potentially hazardous energy source cannot be achieved by ignoring concerns or trying to divert the discussion. The government’s reaction to Fukushima was therefore fast and proactive. While some French nuclear power officials at first tried to play down the meltdown as a manageable “accident,” the French Embassy in Tokyo was the first to advise French nationals to leave Tokyo. The president of the French Nuclear Safety Authority was also the first to rate the Fukushima disaster a 6 on the International Nuclear Event Scale of 7, while the IAEA stuck to Japan’s rating of a 4 for a long time. Transparency and swift corrective action when problems occur are of utmost importance in the French strategy of sustaining nuclear energy as a viable option in a rich country.

Emerging Countries Face Additional Challenges

The emerging country that is most directly affected by the Fukushima accident is Japan’s neighbor, China. As during earlier nuclear incidents in Japan, the Chinese government first tried to brush off any concerns with the usual comments that China’s nuclear reactors are newer, the technology already more advanced, and government oversight is stricter than in private-industry Japan.

But the situation changed very quickly. In “online” China, all news and devastating images from Japan spread instantaneously, became mixed with rumors about possible radiation spills, and, lacking better government information and reactions, resulted in a run on a rumored health precaution: (iodized) table salt. Panicked shoppers cleared all supermarket shelves of salt within days. Top government officials therefore changed course and, as in Germany, promised a sound review of existing nuclear installations, declared a moratorium on all new plants until new safety regulations are in place, and started to provide more transparent information.

China’s government already faces all the difficulties countries with mature nuclear power programs have – with some additional challenges. It has a very concerned population, strong local governments, the necessity to build power plants in high-risk areas (including earthquakes and floods). But China also has a history of opaque regulation, corruption and weak control of public corporations, which makes reviews and tighter safety standards much more challenging. It is therefore paramount that China convincingly tightens governance in its nuclear industry. Basically, China will have to take a page from France’s playbook of strict public control, a high degree of transparency, and swift action during incidents.

It will be especially challenging to hire and train enough experts for the National Nuclear Safety Administration to police a system which is expanding rapidly into multiple sites in distant parts of the country, as China’s is. A rapid transition of plans towards the latest generation of nuclear technology will also be a stretch, especially because the country is planning to develop some of the technology and most of the infrastructure on its own. And finally, the government will have to produce plans on what to do with the nuclear waste that is currently raising the gravest concerns at Japan’s Fukushima site; a challenge that has not been sufficiently tackled by any government so far. For China, these obstacles are not just a matter of exploding costs, as in countries with mature nuclear programs, it is a race against time that cannot be won by pulling resources out of the development of other traditional or alternative power sources because those will be needed as well.

But China will ultimately not waver from the direction of its nuclear strategy because it has to deal with a set of challenges that keep it staunchly in favor of nuclear power. Emissions (smog) from other power sources, in particular coal, are a major source of health concerns that can outweigh risks of radiation leakages. The cost of life in coal production alone goes into the thousands each year. Alternative energy sources such as hydropower have either reached their limit or will never be able to catch up fast enough with the country’s rate of growth. China’s government will therefore have little choice but to try to stick to its current plan to increase nuclear output from 10 to 86 gigawatts by 2020. After Fukushima, however, this will become either much more costly or more time consuming – perhaps both.

The situation in India is not much different. There too, speed is of the utmost importance in building up its power supply infrastructure. However, so far India does not intend to develop all technologies on their own, and so they can import and apply the newest technologies more freely. But following a long line of scandals and corruption cases among its utilities, it might be even more challenging to provide the necessary governance upgrades in India. With growing concerns, India’s major newspapers have already pointed out that not even long-existing earthquake safety standards for regular buildings seem to be known by regional governments – which would seem to be the minimum prerequisite for enforcing much more challenging safety standards.

Other International Policy Responses

Many countries in Eastern Europe, as well as Turkey and Russia are in the midst of fast-track buildups of their nuclear power capacities. They are therefore leaning towards the French position of not considering any major changes to their nuclear programs while promising reviews, accepting the need for more transparency, and tightening the grip of government regulators. For most of these countries, independent sources of power generation have very high priority while most forms of alternative energy still remain out of reach. The EU Commission could provide a great service to these countries by developing convincing safety standards and enforcing their application, but such oversight is not yet seriously on the agenda, and the stress tests that the EU will conduct this summer have already been brushed off as lacking because they are voluntary and non-binding.

In the US, the 1979 Three Mile Island nuclear accident basically froze the nuclear power industry. The 1986 Chernobyl accident further reinforced American skepticism about nuclear power. No new licenses were granted for 30 years. But the Nuclear Regulatory Commission now has to extend licenses for old reactors, some of the same technology as Fukushima’s, and it is reviewing 20 license applications from a dozen companies for new plants. The industry expects up to eight new reactors by 2020, adding to the current 104 plants in the US. In addition, the current Democratic government, with support from the Republicans, is a strong supporter of nuclear power as a non-oil, low-carbon technology. It has offered $18.5 billion in loan guarantees for new nuclear plant construction and might add another $36 billion. Hundreds of millions of dollars are earmarked for nuclear energy R&D.

After Fukushima, however, license extensions for old reactors are running into strong local opposition. Many safety standards that have often been criticized for being just marginally above possible worst-case scenarios (such as the old GE reactors in Vermont which are only earthquake-proof up to a magnitude of 6.2) will have to be upgraded, which will mean the end for many old reactors. Even more problematic for the US is the fact that the nuclear power industry has followed the same nuclear waste “disposal” policy as Japan. They have accumulated used fuel rods in pools in the reactors over decades, which will certainly become a concern since these pools were the Achilles’ heel of Fukushima. It seems very unlikely that the US public will take on these challenges in order to save a little on their electricity bill or their CO2 output.

Overall, in the richest countries the nuclear renaissance may have ended before it ever really began. In catch-up countries, such as in Eastern Europe, plans will likely go ahead with little interruption, but costs and government control of private contractors will increase significantly. This will likely make the industry less interesting for private investors, and make other power sources, enhanced energy saving policies, and green technologies much more attractive. In most emerging countries, nuclear development plans will probably go ahead, but not as planned. They will likely require major reviews and upgrades that will prove to be as costly as they are time consuming, which in turn presents major obstacles for current development plans and favors other technologies in those countries as well.

Lessons from Fukushima

Even after Fukushima, it is unlikely that Japan will give up on its nuclear strategy. Concerns about energy independence rank too high and too much has been invested into the technology by major companies. It is also unlikely, however, that a new nuclear power plant will ever be built in Japan again. Local opposition had made it almost impossible to build new reactors in a timely manner even before Fukushima. After Fukushima, it is hard to imagine a community that would accept the construction of a new plant. Policy will therefore be stretched between a pro-nuclear policy at the center and renewed resistance in the localities that actually have to host nuclear plants. As in Germany, the government will therefore effectively have to give up on nuclear development at home while industry will focus on exports and overseas investment, which certainly has not become easier or more profitable for Japan’s nuclear developers.

Much will depend on the analysis and scrutiny of what actually went wrong in Fukushima. This debate will likely revolve around five main issues:

• Risks. Most of Japan’s nuclear plants are built at high-risk locations. Japan is the most earthquake-prone nation in the world; it has even lent the term “tsunami” to the world. A review of local risks and necessary upgrades to deal with them will probably cause setbacks for many planned projects, but it will also show that risks are manageable at most other locations. All reactors, after all, survived the huge earthquake well and security systems were only wiped out by the following tsunami. There is even still a good chance that the Fukushima disaster, while getting out of control after nature hit with full force, will remain a contained local disaster (with huge costs for the region, of course).
• Governance. Japan is famous for effective governance, strong concerns for safety, and excellent quality. But Japan’s domestic nuclear power industry has long been short on these virtues. Reviews will stress a long line of issues of over-confidence, planning mistakes, cover ups, and regulatory neglect. Other countries can try to avoid these, although most emerging countries will certainly find it a stretch to actually achieve such lofty goals (especially if they try to do so in just one particular industry).
• Costs. As in many other industries, profits in the nuclear power industry are private while risks (or costs when something goes wrong) are socialized. In Japan, costs of the Fukushima disaster have potentially eradicated any gains from nuclear power generation for decades or centuries. In many countries with mature nuclear programs the cost of risks for local communities will appear to be too high to be acceptable after Fukushima.
• Technology. Unlike most other industries, nuclear power plants rarely become upgraded while they operate for many decades. Fukushima was 40 years old. Reactor cores cannot be swapped out, and the costs of scrapping facilities when new and safer technologies are available are much too high. So choosing the latest available technology is paramount, and paving the way for effective modularization seems to be important too. The future of any country’s nuclear power industry will depend on how much it can offer on these accounts.
• Sustainability. During the Fukushima disaster, potentially the biggest danger lurked in the pools of spent uranium rods. Over the decades, almost 12,000 used fuel rods, each containing around 300kg of uranium, had accumulated in Fukushima. In reactor No. 3, which saw the heaviest explosion, 514 used fuel rods had been stored, with a large number of them containing MOX fuel, which includes highly dangerous plutonium. After the cooling systems had failed and the reactors’ housings had blown off, many of these used nuclear fuel rods started to heat up again, producing the risk of a meltdown in open air. Though most of the risk came from recently used and still “hot” fuel rods, the avoidance of such scenarios requires convincing solutions for nuclear waste disposal.

The Future of the Nuclear Power Industry

It is important to consider the adverse reaction of the German public or the “salt-run” in coastal China when assessing the coming debate about the future of the nuclear power industry. Such public reactions to the images of Fukushima might seem overly emotional or even irrational to some, but the Germans’ position will resonate strongly with citizens and local governments that are directly affected by new or existing nuclear plants. It will become much harder to find acceptable sites for new plants, and scrutiny of potential risks in existing plants will increase. After Fukushima, related costs will seem unacceptably high in many rich countries, including Japan and the USA, which will most likely stop the expansion of nuclear power generation. Fukushima will also start a major debate about the safety and controllability of nuclear power anywhere, which will slow down the expansion of nuclear power use even in emerging countries.

The only effective way to deal with these concerns is the French way of strict regulation, effective governance, and a high degree of information and transparency. In such a strict environment, whether nuclear power remains a viable and cost effective source of energy will very much depend on local conditions; in many rich countries it probably will not. In many catch-up countries, where energy independence is an important objective, nuclear power will remain an important “bridge technology.” In most emerging countries, which have to consider many alternative health hazards and risks, nuclear power will almost certainly remain an important pillar of national energy strategy. But in these countries it will also become one of the most challenging technologies because high safety standards, excellent governance and tight oversight would have to be enforced in a high growth environment which rarely produces such qualities.