Nuclear industry’s wishful thinking knows no bounds: No, Ukraine crisis is not going to boost nukes in Europe

Nuclear power hasn't worked out so well for Ukraine so far. There is no reason to believe it's going to help now either.

Nuclear power hasn’t worked out so well for Ukraine so far. There is no reason to believe it’s going to help now either.

Never let it be said that the global nuclear power industry lets a good crisis go to waste….the industry is now promoting the far-fetched notion that the conflict between Ukraine and Russia should lead to new development of nuclear power, especially in Eastern Europe.

There is certainly significant truth in the idea that the conflict could increasingly turn on energy issues in coming months and years–after all, Russia already has used shut-offs of natural gas to and through Ukraine as a political weapon in the past. But the idea is far-fetched because new nuclear power would be far too slow to make any difference to the region’s energy picture for the next decade at least, and nuclear power would do little to solve the region’s, especially Ukraine’s, reliance on Russian natural gas, which is used primarily for heating, not electricity generation. (We should note here that similarly cockamamie concepts emanating from U.S. energy fossil fuel interests, like building the Keystone XL pipeline or encouraging natural gas exports, can somehow occur quickly enough to make a difference for Ukraine or the current conflict generally are also industry-spawned fantasies).

Indeed, the fastest, cheapest and easiest steps Ukraine could and should take to reduce reliance on Russian gas is to improve its energy efficiency. Ukraine is one of the most energy inefficient nations on earth due to decades of subsidies that artificially reduce energy costs to the public and frequent failure to even collect on the energy bills that are charged to consumers and institutions. Buildings in Ukraine were not designed with energy efficiency in mind–quite the opposite–and the country is far behind in implementing even simple steps like switching to CFL or LED lightbulbs, much less improving its industrial sector.

That’s one big reason why our NIRS/WISE partners in Ukraine, Ecoclub in Rivne, have spent many summers retrofitting institutional buildings like orphanages and schools to be more energy efficient. Their hope always has been that once the improvements are seen–in both energy effectiveness and reduced costs–they would be emulated. But it requires a government-led effort to achieve the kind of efficiency savings the nation is capable of and needs, and to date corrupt Ukrainian governments have been far more interested in protecting and expanding subsidies to gain votes and garner favor with oligarchs than in improving energy efficiency. Hopefully that will change when a new government is elected in May–that’s certainly the kind of change the protestors still camped on the Maidan are hoping to see.

Renewables are also a potentially valid source of power in much of Ukraine, of course (as they are just about everywhere), but again, there has been little progress on renewables at a national scale. Ukrainian governments have instead invested, largely unsuccessfully in recent years, in building nuclear reactors to provide export power and hard currency rather than in modernizing the country’s own energy infrastructure. But a 2006 paper from many of Ukraine’s leading environmental groups, including Ecoclub, indicates some of the possibilities for the country.

Interestingly–to NIRS at least–we apparently have identified the Black Sea area, and especially now-Russian-dominated Crimea, as particularly fertile for wind power development. We don’t remember having done so, but the 2006 paper does say exactly that on page 28.

The reality that rapid and highly cost-effective improvements in energy efficiency and renewables would do far more than nuclear power to address Ukraine’s energy dependence hasn’t deterred the nuclear boosters at CNBC however, who breathlessly inform us that “Moscow has quietly taken the lead in the $500 billion market for nuclear exports, building the lion’s share of new facilities—and by extension earning influence and good will in key regions around the globe—as the U.S. sits on the sidelines.” Perhaps CNBC should read its own article, which states that the Russian share is only 37% of new nuclear projects. Or maybe lions don’t get the same share they used to…. And many of those alleged projects are  highly speculative.

CNBC adds, “The Russians view nuclear as an excellent export product,” said Barbara Judge, former chair of the U.K. Atomic Energy Authority, in an interview with CNBC. “They are using it as part of their plan to establish themselves as a geopolitical economic power.”

But, as Mark Cooper of the Institute for Energy and Environment at Vermont Law School points out, both Russia and China (which is–not yet anyway–aggressively exporting nuclear technology) “‘are subsidizing the bejesus out of their technology,’ which means privately owned U.S. companies can’t really compete.” Left unasked by CNBC is why such subsidies are necessary if nuclear is such an “excellent export product.”

One reason is that many of the countries Russia is selling to can’t actually afford to buy nuclear reactors, so Russia provides massive loans–many of which probably will never be repaid. And because the private sector worldwide rejects nuclear power on economic grounds–it is simply no longer economically competitive with competing electricity sources and grows even less so daily–those countries that actually succeed in building Russian-designed reactors (and our prediction is that most will never actually complete their plans) will find their electricity costs put them at a competitive disadvantage in world markets. That will lead to more countries dropping out of nuclear projects before they are complete, and a further erosion in the Russian trade balance. Ultimately, nuclear exports are likely to have a negative impact on the Russian economy.

Meanwhile, the UK itself seems to doubt the wisdom of its former official Barbara Judge. According to Reuters, “Britain is reviewing its nuclear cooperation agreement with Russian state firm Rosatom because of the Ukraine crisis, the Department of Energy and Climate Change (DECC) said.” European countries, despite the nuclear industry’s self-perpetuated mirage, tend to believe that nations that invade other nations for their own self-aggrandizement are perhaps not the most reliable partners in building and supporting a nation’s energy infrastructure. Perhaps Russia’s “lion’s share” of new nuclear facilities isn’t going to be so large in the end after all….

Michael Mariotte

March 25, 2014


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