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Energy Requirements and Issues

Summary

Electrical Power is a fundamental requirement of a modern technology society. Australia has enjoyed cheap and reliable electrical power for many years. However our energy needs are forecast to grow by 2% per year for the next 15 years to 2020. Meeting this demand requires building 1 GW of new generating plants every year until 2020. If Australia does not build this capacity we will suffer large scale blackouts if demand grows as it has historically. Our previous strategy of employing coal-fired Power Stations will increase our Greenhouse Gas emissions which contribute to global warming. Substantial investments in energy efficiency can mitigate this energy growth but it will require aggressive intervention on the part of the Australian Government. The cost of investing in this energy efficiency is comparible to the cost of building state-of-the-art Nuclear Power plants.

Nuclear Power is the cheapest form of non-Greenhouse Gas emitting electrical power production and when used at the world's Best Practice, supplies safe, cheap and environmentally clean energy.

Our Need for Energy

A modern technological society like Australia makes substantial use of energy to make our lives better and more enjoyable. Besides having direct benefits, access to cheap electricity and energy enables some aspects of sustainability, such as recycling, to thrive. For example steel-producing mini-mills require substantial amounts of electricity but do not need Coking Coal, Iron Ore and reuse waste products which would otherwise be dumped somewhere in the environment.

While we can do much to conserve energy, the fact is that Australia has increased its energy consumption by over 2% per year since 1970. Our total energy needs are forecast to increase by 50% in total by the year 2020. Meeting this demand requires building many large power-plants over the next 15 years. If we do not do this and our energy demand grows as expected, we will be faced with large scale blackouts. For example, the State of Victoria had a reserve energy deficit of 500 Megawatts in the summer of 2005 which was twice the 229 Megawatt deficit of 2004. This deficit will continue to grow without substantial new electricity generation capacity. However Australia currently produces more Greenhouse Gas per Capita than every other OECD country. If we build new Coal-fired plants we will make this situation even worse.

This is just Australia. The rest of World's use of energy will rise even faster. This is the inevitable consequence of the development of former third-world nations like China and India. Almost all Third World countries (and certainly China and India) intend to raise their standard of living to Western levels. Indeed if China's economic growth continues as it has for the last 25 years, it will obtain per-capita wealth comparable to Australia's current income in the decade of the 2040's. India will likely take a few decades more.

Both these Countries have populations of around 1 billion people and such developments will more than double the world demand for energy. Note that this will happen. It is not something we in Australia or even the USA or Europe could stop even if we wanted to. The "Developing World" will use energy at a rate comparable to what we did before the end of the 21st Century.

China has identified Nuclear Power as an important component of its future energy mix. India has long-term plans to develop a fully indigenous Nuclear Power program to meet its own vast energy needs.

It is quite possible to utilize Nuclear Power to provide the vast majority of an entire country's need for electricity. The French Nuclear Power program is the exemplar of this. In France, Nuclear Power provides 77% of the nation's need for electricity (the remainder being Hydroelectricity). France generates a surplus of electricity which it exports to neighbouring countries at a profit. It does this while costing the dismantling of its reactors and disposing of its waste products in the price of the electricity it generates.

The current electrical energy consumption for the entire planet is 1517 GW of continuous power. There are currently 439 nuclear power plants with a capacity of 371 GW. These provided 16% of the electrical power production of the world.

The Australian Broadcasting Commission recently aired an excellent investigation into Nuclear Power, entitled "Who's afraid of Nuclear Power?". You can download this program from this link.

Reducing our need for Energy

According to the Australian Bureau Of Statistics the total energy consumption in Australia has increased by 9% from 1998-99 to 2003-04. Electricity use has increased by 19% in the same period. In this same interval (1998-99 to 2003-04) the population in Australia has increased by about 6% and Gross Domestic Product (GDP) almost by 18%. Therefore the electricity use has increased in line with GDP. It is also interesting to note that in the same interval as above, electricity use per person increased by 11%, however total energy use per person has only increased by approximately 3%.

The table below was constructed using the information in table 17.19 of the Australian Bureau of Statistics, Year Book Australia 2006, Energy Use (see the link above).

Period Energy Use Per Person (GJ/person) Electricity Use per Person (GJ/person)
1999-99 258.1 35.7
2003-04 265.8 39.8

The Federal Government's White Paper on Energy Reform outlines that energy efficiency improvements in Australia have occurred more slowly than in other countries (see specifically the summary on energy efficiency and the chapter on energy efficiency). In fact, Australia's energy efficiency has improved at less than half the rate of other countries. Some of the factors that have affected improvement in energy efficiency include low energy prices in Australia, the initial investment required to change to more efficient use of energy, and a lack of information about energy efficiency. For more information download the NFEE Discussion Paper.

Energy Efficiency Opportunities in Australia

Again, the Federal Government's energy reform paper indicates that there is a substantial opportunity for Australia to become more energy efficient. It is estimated that energy usage in the residential sector could be decreased by 13%, in the commercial sector by 10.4% and in the industrial sector by 6.2%. These improvements in energy efficiency could reduce total greenhouse emissions by 10 million tonnes per year.

Cost of Improving Energy Efficiency

The National Framework for Energy Efficiency (NFEE) has released a study on the cost of employing energy efficiency and the energy and economic savings that can be achieved between 2001 and 2012. The study was conducted for the residential sector, the commerical sector and the industrial sector.

The results are graphed below:

The above graphs assume that current technology is used to increase energy efficiency. The information for these graphs can be found in the background report (v4.1 ) by the National Framework for Energy Efficiency, 2003, "Preliminary Assessment of Demand-Side Energy Efficiency Improvement Potential and Costs" in tables A1 and A3 in the Appendix. The study can be downloaded here: NFEE study. It is worth noting that the objective of the study was to provide, in a short time frame, a preliminary estimate of the potential for, and costs of, energy efficiency improvement (EEI), in the residential, commercial and industrial (stationary) energy end-use sectors in Australia. Because of the short time frame, the study was not based on original research, meaning that the EEI potential and cost estimates were based on a range of existing data sources in each energy end-use sector.

The graphs above outlines that a continual investment will need to be made in order to increase energy efficiency. In the residential sector the investment is expected to be paid off due to the saving of energy within ten years and in the commercial and industry sector, it is expected to be paid off within 8 years.

The study also showed how much energy (in joules rather than dollars) can be saved given a certain investment. They used two types of investment. The first investment called, "Low", assumes that only currently available technology is used. The second investment, called "High", assumes that emerging technology is used. Again, the study was conducted for a 12 year period. The results are as follows:

Sector Low Scenario High Scenario
Capital Cost ($M) Energy Saved (PJ) Capital Cost ($M) Energy Saved (PJ)
Residential $13470 855 $58350 1,866
Commercial $6361 425 $23191 850
Industrial $12101 2,163 $44134 4,068
Total $31,932 3,443 $125,675 6,784

Note that in the above table accumulated data has been used. For example, in the commercial sector for the low scenario the investment is the total capital cost over 12 years and the energy saved is the total energy saved over 12 years. The energy saved is in petajoules (PJ): 1 petajoule = 10^15 joules.

The main result from the table is that there is potential to save 3,443 PJ of energy over 12 years using currently available technology. This is equivalent to 9 large, (1 Gigawatt) power plants operating over the full 12 years. The Capital cost of saving this energy is $AUD 3,400 dollars per KiloWatt. By comparison, the capital cost of Nuclear Power plants is projected to be $AUD 2,000 per KiloWatt.

It is worth noting that to really make an impact on the total energy efficiency of the economy will require substantial investments in new equipment and products that replace current working devices. This will require substantial capital investments on the part of a large fraction of the population - the industry, commercial and residential sectors. Australians have been urged to increase energy efficiency for over 20 years. The result of these efforts have been to decrease our rate of energy use growth from 2.6% per year in the 1970's to 2% per year in the 21st century. It appears that strong Government intervention in the form differential taxes to promote energy efficiency would be required to make Australians collectively invest in energy saving equipment and technologies.

Some things to think about

Energy efficiency has a limit. As population rises and the economy grows energy consumption has to increase (as each new person will need food, shelter, light etc). While policies to dramatically increase energy efficiency could work to decrease our energy consumption in the short term, they will also defer new investment in energy generation technology. However, eventually such investments need to be made in order to cope with the growing demand for energy due to population increase.

Of course it is also possible to combine energy efficiency with renewable technology. In this case it may be possible to keep C02 levels low enough and be able to supply society with enough energy until renewable energy technology or completely new energy sources become advanced enough such that they can be the main energy source. In fact this is what is proposed in the Federal Goverment's white paper on Energy Reform. The paper outlines a plan to set up "Solar Cities" for the purpose of studying small communities which will rely heavily on solar power for their energy use. This energy efficiency/renewable energy plan is to encourage research into storage methods for renewables such as solar and wind by providing grants, offer incentives for energy efficiency such as a star system for appliances and subsidise energy efficient devices, force new buildings and large energy users to comply with energy efficiency standards. This situation should be studied thoroughly. The study should include an analysis of the cost to the consumer and ensure that C02 levels can be kept at the required minimum.

In the longer term we will need to develop alternatives to fossil fuels used for transport, to both limit global warming and because of resource exhaustion. Presently Hydrogen appears to be the logical choice for this role. Developing the technology and infrastructure to generate and distribute Hydrogen will require billions of dollars, nevertheless these costs are comparable to those of typical fossil fuel projects.

Issues for Australia

Australia should look squarely at Nuclear Power. Right now we have no Nuclear Power generation facilities at all. There are genuine risks involved in ignoring Nuclear Power.

Our electricity consumption is forecast to rise by 50% over the next 15 years. Meeting this demand will, on average, require bringing 1 GW of generating capacity online every year until 2020. If we do not build this capacity and our demand grows as it has historically we will be faced with blackouts. Meeting this demand with only renewable resources will be very expensive and because of the diffuse distribution of solar and wind energy, will require large amounts of land.

Meeting this demand through Fossil Fuel production will increase our Greenhouse gas emissions at a time when the World community is focused on reducing these. We already produce more Greenhouse Gas per Capita than every other OECD country. Long term CO2 sequestration will increase the cost of Fossil Fuel based power and appears significantly more difficult than geologic disposal of Nuclear Waste. We have traditionally used our low-cost electricity as a competitive advantage for our nation. We may lose this in the future.

If the next generation of nuclear power plants live up to the promises of the Industry, Nuclear Power will be the cheapest form of new electricity production. These will be even cheaper than our current non-sequestered, Coal-Fired base-load generators.

However, if we decide to employ Nuclear Power, we must do it right. There have been many mistakes in the development of nuclear power. These include: unsafe reactor designs, lackadaisical safety awareness, unthoughtful operator training, over-selling of benefits, poor cost control through unstandardised designs, changing regulatory frameworks, poor environmental procedures and ignoring community concerns. Yet where these mistakes have not been made or where they've been corrected, Nuclear Power has provided environmentally clean and cheap electricity. Nuclear Power works if World Best practices are followed.

If Australia pursues Nuclear Power we recommend that:

  • We should take advantage of economies of scale and deploy a significant number of reactors (more than say, six 1 GW reactors) so that the costs of waste disposal and fuel enrichment can be shared.
  • An Australian Nuclear Industry must be pro-active in engaging with the World Community and employ World Best Practice levels of Safety and operations.
  • We would need an independent and pro-active regulatory framework to oversee the operations of a Nuclear Industry.
  • The activities of the Regulators and the Industry must be open to the public and all decisions should be fully transparent.
  • We must invest in research to find and build a suitable site for geologic disposal of waste.
  • We must decide on appropriate means of transporting the waste to the site.

In short, going the Nuclear route would require a significant consensus that this is the best way forward on the part of Australian Society.

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This page, its contents and style, are the responsibility of the authors and do not necessarily represent the views, policies or opinions of The University of Melbourne.