Some observers thought the Sony BMG spyware scandal would be the end of the music CD. The record company admitted to planting spyware on millions of copies of hit music CDs and agreed to recall the affected CDs and pay damages to people whose computers were ruined. Music fans swore never to buy another CD.
And, yes, most of the record stores closed, but the music CD is still alive. It’s still a vital music format — a niche format, at this point, but still very important.
In a similar way, the Fukushima disaster is not the end of nuclear power. But it marks the beginning of the inevitable decline of current nuclear technology.
The decline of nuclear power was coming in about 8 years anyway, as uranium shortages will force partial shutdowns at nuclear power stations. With the post-Fukushima slowdown, the shortages may be delayed until 2035, but they are on the way eventually, even if no more nuclear power stations are built.
Nuclear power has never been cost-effective on its own merits. Electric utilities make a profit on nuclear power only because of funding from weapons programs. This year, the U.S. Department of Energy is preparing to set aside $36 billion for new nuclear capacity in the United States. At the same time, the price of uranium is artificially low because of the availability of military surplus uranium, which may last for another six years. Without these subsidies, no nuclear power station could be built.
New nuclear reactors will be built in the United States, just because the Department of Defense needs them for its nuclear weapons program. But the nuclear weapons manufacturers don’t need very many nuclear reactors. If they can arrange for one new reactor every four years, that will be enough. Don’t be surprised if some of these new reactors are built on, or adjacent to, military installations.
Even before the events at Fukushima, nuclear power was a high-risk, low-yield investment. The CEO of Exelon, which owns nuclear power plants, said as much in a conference call to investors last week. Even if you want “clean” electricity, he said, natural gas is a better investment right now.
It’s significant that there was no mention of solar. For peak-hour electric generation, which is really the reason why we add generating capacity, solar is already less expensive than nuclear. Some observers expect solar prices to fall by 20 percent between now and next year. It will not be a shock if the cost of solar electricity falls by a factor of 3 before any of this year’s nuclear reactors come online. If you’re an investor, which looks better: a solar installation that reaches its break-even point after about 6 years, or a nuclear installation that doesn’t start earning revenue for at least 9 years, and may never break even?
Cost, rather than the potential for disaster, is the main reason why the current generation of nuclear reactors is on the decline. The way the cycle of innovation usually goes, engineers won’t start designing the second generation of nuclear reactors until it’s obvious that the first generation is failing. (The nuclear industry divides current reactor designs into four generations, but they really all belong to the same generation by any objective point of view.) This is similar to the way we didn’t get clean-sounding audio cassettes and LPs until about 1986, when it became obvious that the CD was taking over the music market. Engineers tell me that a nuclear reactor could be made at least twice as efficient, and safer too, by making it physically larger. That kind of improvement might be enough to make nuclear power competitive again, but the design challenges won’t be taken seriously by the industry, I am afraid, until the current designs are pushed out of the marketplace.