IRP2 launched into world of uncertainty

In March this year, the South African Cabinet approved an adjusted Integrated Resource Plan (IRP2), containing a substantial nuclear energy component at a time when one commentator observed that what is happening at the Fukushima Nuclear Power Plant in Japan has brought the world to “the end of the nuclear era”.

The IRP2 comes at a time when Germany has decided to place a three-month moratorium on plans to extend the lifespan of its seven oldest nuclear reactors, and countries across the globe are re-evaluating the role of nuclear in their energy mix.

The Japanese nuclear crisis and the international reaction to it could not have come at a worse time for the South African government; however, to not have put an energy plan on the table would have cast a long shadow over the country’s mid- to long-term economic development prospects.

Germany’s Chancellor Angela Merkel came in for some heavy criticism, with the term “panic button” being used by a number of commentators and one saying she ought to have “kept a cool head because shutting down some… plants for inspection is an absurdity.”

Impact on COP 17

The latest developments are set to impact on the nature and prospects of the Conference of the Parties (COP 17) under the United Nations Framework Convention on Climate Change to be hosted by South Africa at the end of this year in Durban.

In recent times, there has been much talk of a nuclear renaissance as an important part of the solution to carbon dioxide emissions as a bridge technology until technically and economically viable renewable energy sources can be developed.

The initial plans to extend the life of reactors in Germany, which were originally commissioned during the 1970s and 1980s, were intended to ensure the country met its goal of reducing its emissions of CO₂ by 40% by 2020, relative to 1990 levels. The viability of such parameters has suddenly changed dramatically.

If the present moratorium goes over into permanent shutdowns, as many assume it may, the elimination of 43.6 terawatt-hours from an annual energy production of 544.5TW in 2008 would imply a greater reliance on coal and natural gas-fuelled power plants.

As Daniel Brebner of Deutsche Bank put it in a newspaper interview: “Nuclear power has suddenly gone from being part of the solution for future green energy to a dangerous relic of the Cold War era. Germany will have to cover the shortfall by importing more gas and thermal coal, playing havoc with CO2 greenhouse targets.”

Germany is not alone: Austria has called for a stress test for all Europe’s 153 nuclear reactors, based in 27 countries; Italy is said to possibly renounce its return to nuclear power; doubts are being expressed in Poland; and Switzerland has announced it is suspending its nuclear projects, with France becoming somewhat of a lone ranger in maintaining confidence in one of its leading industries.

Although United States President Barack Obama has to date insisted that nuclear power plants can be clean and safe, some commentators are convinced this is set to change.

Events in Japan could see the return of the huge anti-nuclear protests of the 1970s and 1980s to that country.

Even China announced in March that it was suspending approval of 25 reactors under construction.

The world presently has 442 reactors with another 65 under construction. They generate almost 14% of global electricity: 75% in France, 52% in Belgium, 35% in Korea, 29% in Japan and 20% in the US.

South Africa’s new IRP2 foresees the country moving toward a scenario where nuclear power will deliver between 23% and 25% of its electricity over the next 20 years. It remains to be seen if this will be possible in the dramatically changed environment surrounding nuclear power.

Against the background of all this, and the accompanying uncertainties, one could expect countries to be much more reluctant to commit to binding international agreements on CO2 emissions come the COP 17 meeting in Durban.

Broader economic implications

“The existential crisis for the world’s nuclear industry could hardly have come at a worse moment. The epicentre of the world’s oil supply is disturbingly close to its own systemic crisis as the Gulf erupts in conflict, Ambrose Evans-Pritchard wrote in The Telegraph.

Russian Minister of Finance Alexei Kudrin warned that the confluence of events in Japan and the Middle East could push the crude oil price to $200 a barrel in what he called a short-lived spike. If this should happen, it would put paid to hopes for a global economic recovery.

According to the Evans-Pritchard report, developments in Bahrain could provoke Iran to launch a proxy war by arming insurgents, expanding into a threat to Saudi Arabia’s Eastern Province. “Any threat to Saudi control over the Ghawar oil field would be a global game-changer.”

The confluence of all the factors in the present energy mix, particularly price pressure and the safety concerns surrounding nuclear, could lead to tremendous new pressures to allow exploration for gas to take place in areas such as the Karoo.

All indications are that there will be an increased reliance on coal in the more immediate future before carbon capture and storage is available.

“Much depends on whether shale gas fulfils its promise, or how soon we achieve a quantum leap in solar technology, or exactly when the world hits peak oil, and at what price,” wrote Evans-Pritchard.

Dr Euan Mearns stated on The Oil Drum website that Fukushima has shattered the faith of democracies in the safety of nuclear power.

If Japanese engineers had prevailed despite the worst that nature could muster, it would have vindicated the industry. “Alas, this is not the case. The future of the human global energy system has just changed course, with potentially far-reaching consequences for civilisation,” he wrote.

Piet Coetzer