Introduction: Uncommon Knowledge

Try thinking about and remembering the following. France and Sweden may still have the largest nuclear inventory per voter in the world, and they also once enjoyed  the lowest electricity prices in Europe, and perhaps the world. Their nuclear reactors also have an admirable safety record, despite the ‘advanced age’ of some of this equipment. Something else that you should find of interest, and which deserves close attention, is that according to the CIA ‘Fact Book’, Japan is one of the most nuclear intensive countries in the world, but at the same time, on the average, its residents have the longest life expectancy in the world for a major power.

The life expectancy in non-nuclear Denmark (and non-nuclear Norway) is below that of nuclear intensive Sweden and very nuclear intensive Japan. The CIA ‘fact book’ has Monaco at the top of life expectancies, but tiny (and rich) Monaco is ‘surrounded’ by nuclear intensive France. According to the Japanese government there were no casualties at Fukushima that can be attributed to nuclear failure, and according to the U.S. government, none at all at Three-Mile Island. As for Chernobyl, the casualty count provided by the Russian government is not something that I repeat because it sounds too low. There are more than 400 reactors in operation today, many are being constructed at the present time, and even more are in the planning state, and I find it easy to accept that there will be well over 500 in a decade. Some of those reactors might be breeders, and according to Professor Jeffrey Sachs (of Columbia University and the Earth Institute) nuclear is the only sensible way to deal with the climate disruption problem.

Photo Credit: GlobalPost

The Main Order Of Business

The above introduction should get readers into the rhythm of the present short article. But please take my advice and do not expect this service from The International Handbook on the Economics of Energy (2009), which is more than 800 pages, and contains many articles. It ignores nuclear energy however, and thus strikes me as  incomplete, but maybe that doesn’t matter.  On the basis of a brief perusal, I believe that like most publications that ignore nuclear where the energy future is concerned, it deserves to be considered  pedagogically worthless.

Thus I begin this contribution with the following cheerful message: the nuclear facility at Fukushima was constructed about 40 years ago from blueprints prepared another 5 or 10 years earlier. Suddenly it was a victim of one of the most powerful earthquakes ever experienced in Japan, and also in the path of a destructive tsunami that featured waves 40 meters high along a 100 kilometer stretch of the Eastern coastline.. To some extent the survival of the Fukushima nuclear facility could be described as a structural miracle, and as indicated by the testimony of Swedish diplomat and nuclear expert Hans Blix, its survival demonstrated what we have the right to expect from future generations of (technologically superior) nuclear equipment.

The bottom line here is that exuberant claims about the utility of nuclear energy should not only be tolerated, but promoted, and where the teaching of nuclear economics is concerned, as much emphasis should be put on history as on economics, because history is where the truth about nuclear is to be found.

Moreover, Sweden is the perfect country in which to  study  both disciplines. About 45 percent of the electric production capacity in Sweden (in Megawatts) is accounted for by nuclear, although annually – at various times in the past –  nuclear probably provided at fifty percent of the electric energy (in Megawatt-hours) produced in Sweden. Initially, nuclear and hydro gave Sweden some of the lowest cost and price of electricity in the world (and the same is true of the output of carbon dioxide). The pointless deregulation of electricity put an end to that very favourable arrangement. 

More significant, the Swedish nuclear inventory of 12 reactors was installed in  slightly less than 14 years, which was a feat of technological brilliance that in some respects was analogous to the expansion of the United States Navy and Air Force in the years immediately after the attack on Pearl Harbor. (At least eight of these Swedish reactors were produced by ASEA, which was a Swedish firm that inexplicably was moved from Sweden to Switzerland in 1988,  becoming the A in ABB, or Asea Brown-Boveri.)

Something I never fail to stress in my formal lectures or informal harangues is the importance of moderately priced electricity in an industrial economy, and on that score Sweden was once in the forefront of world economies.

Unfortunately however, that lovely  situation turned out to be unacceptable to the local anti-nuclear booster clubs, who together with self-appointed energy experts from Sweden and elsewheere  unleashed a  torrent of lies and misunderstandings about nuclear energy that eventually resulted in the bad news for consumers of electricity that sometimes characterizes the Swedish electric market. During the last few years, the price of electricity to households in Sweden has occasionally been extremely high, although – wisely –  electricity may still be sold to Swedish industries at a lower price.

If we take a careful look at the time series of global macroeconomic growth from the end of the second world war (WW2) to the present, we can distinguish two distinct segments. The first is comparatively smooth, and stretches from the end of WW2 until the middle of the l970s, or shortly after energy prices began to rise in an unexpected manner. 

The second segment, from the middle l970s to the present, which  I discuss briefly in my forthcoming energy economics textbook (2015), featured an irregular growth that doubtlessly resulted from the occasional drastic increases in all energy prices that began with the first oil price shock, and whose impact effect was a slowdown in the rate of  the productivity growth in almost every industrial country.

This was a kind of ‘sneak preview’ of the macroeconomic meltdown that would begin in the latter half of 2008. Another consequence of the energy price rise – i.e. oil plus other energy resources –  was stagflation, or the simultaneous occurrence of inflation and increased unemployment.

Unless national energy structures are ‘adjusted’, these miseries might accelerate if the prices of the main fossil fuels begin to escalate again, which is a misfortune that I consider likely, though perhaps not in the short run, and which I prefer not to discuss here. I will suggest however that this judgement particularly applies to oil and natural gas, and initially will likely be due to  geopolitical rather than geological causes.

In case a possible ‘adjustment’ for countries like Sweden is necessary, I would like to suggest reinforcing hydro, if hydro is present, with an optimal collection of renewables and alternatives, as well as maintaining the presence of nuclear, increasing its efficiency, and eventually adopting the next generation of reactors and its variants in both present and smaller sizes. I also think it ‘politic’ to assume that nuclear will be an indispensable complement to (and not substitute for) any conceivable mix of renewables and alternatives,  and also to accept that a fraction of these renewables and alternatives would be an optimal political but suboptimal economic concession to voters and politicians who are deeply offended by the success of science and engineering in their countries, which happens to be the situation in Sweden.            

As Sigmar Gabriel, Germany’s economy and energy minister, made clear, “we have reached the limit of what we can ask of our economy.” What he meant – but obviously could not say –  was the limit of what could be asked if the proposed liquidation of nuclear energy in his country becomes a reality. Notice the word “if”, because a genuine as opposed to a synthetic dumping of nuclear will never take place in Germany or Japan.  Gabriel also said that “Germany had been financing the learning curve on renewable energy for other European countries”, which might be the reason that he has called what he regards as the Swedish portion of that ‘debt’ due.

To be specific, Gabriel understands as well as I do that wind and solar can NEVER replace nuclear in Germany, nor any other civilized country, nor was that the intention of his government, even if it sounded good to persons who consider it elegant to believe lies and misunderstandings. The replacement in Germany is  – and will remain for a while –  imported electricity and coal, and so he contacted the Swedish prime minister (Mr Lõfven) and humbly requested that the Swedish firm Vattenfall should not abandon its coal mining activities in Germany, which apparently was about to happen, even though the lies that the directors of Vattenfall once spread across the world about their CCS (or ‘carbon capture and sequestration’) activities in that country probably set a new record where contempt for the intelligence of Swedish and German politicians and journalists are concerned, and also some of the employees of their firm. 

If that is true, then other countries should not make the mistake of trying to assist them. Instead, the governments of countries that export electricity to Germany should attempt to reintroduce German voters to reality rather than helping to prolong the fantasy of their counter-productive energiwende, and one way to do this is to drastically reduce electricity exports to Germany, which will keep electricity prices from rising in their own countries.

Thanks for nothing, Germany, is the proper farewell here, and an unmistakeable gesture of disrespect should also be tendered politicians in every state or city who deem it correct  to increase the price of electricity in their countries in order to make a success of the attack on local living standards which is the unspoken means and end of the so-called ENERGIWENDE!

References

Banks, Ferdinand E. (2015). Energy and Economic Theory.

London, New York and Singapore: World Scientific. (2015). 

Energy Economics: A Modern First Course. (In Process) (2007).

The Political Economy of World Energy: An Introductory Textbook. Singapore and New York: World Scientific’