The market
There are 442 operational nuclear power plants in 30 countries, producing 375 GW of energy. Sixteen countries are building 65 new nuclear power plants, adding another 63 GW. China is building 27 new plants, and Russia 11. The United States has 104 nuclear power producers, far ahead of France (58) and Japan (48, if the former Fukushima plants are included). Some 212 plants are over 30 years old, and although there is no definitive scientific data on the safe operating life of these nuclear facilities, German Chancellor Angela Merkel led the way by ordering the permanent closure of all plants over 30 years old. The European Union operated 143 plants in 2010, compared to 177 in 1989, a record year. The relative decline of nuclear power had been set in stone long before the Fukushima disaster. Lithuania and Italy have decided to phase out nuclear power entirely, while Finland laments that the 1.6 GW plant being built by the French (AREVA) and German (Siemens) companies is now five years behind schedule and over 70% over budget. These delays alone are adding an extra €1.3 billion to consumers' annual bills, not including the increased capital costs. The latest plant, ordered by Georgia Power in 2010, is estimated to cost $17 billion. The investment cost per kilowatt-hour (kWh) before March 11, 2011, was estimated at $7,000. However, the additional safety measures that will be required are likely to increase the cost to $10,000 per kWh. The new nuclear power plants are said to be capable of supplying baseload power at 5.9 cents per kWh. The true cost—stripping nuclear power of all its subsidies, depreciation benefits, insurance protection, financial support, and waste disposal—is closer to 25 or even 30 cents per kWh. Not only does nuclear power benefit from limited liability covered by society, but it is also uncompetitive. It is therefore not surprising that, despite massive subsidies and legal protection, in 2010, installed renewable energy capacity, covering only wind (193 GW), waste-to-energy (65 GW), hydropower (80 GW), and solar (43 GW), had collectively surpassed nuclear (375 GW), long before the trilogy of disasters demonstrated the impossibility. Now that the shores of the Pacific and Indian Oceans are off-limits to any new nuclear power projects, the question is: how will the world manage to produce affordable renewable energy?
Innovation
The Blue Economy proposes that we use what we already have and study the competitiveness of each innovation without waiting for subsidies. If, ultimately, the subsidies offered don't matter, the key is to pass the crucial test: are there renewable energy solutions that are truly affordable? Over the past few months, I've presented a portfolio of technologies as part of the Blue Economy Innovations program. These breakthroughs haven't received much attention, probably because they require complex expertise. However, if deployed in clusters, these few sources of heat and electricity will reshape and strengthen the current renewable energy landscape. The three innovations are: a) vertical-axis wind turbines placed inside existing high-voltage transmission towers (case 11), b) the repurposing of existing municipal wastewater treatment facilities to combine water treatment with municipal organic solid waste to produce biogas (case 51), and c) the combined production of heat and electricity with double-sided photovoltaic panels housed in a recycled shipping container and equipped with optical tracking devices, thus eliminating all moving parts (case 53). If we are serious about pursuing a renewable energy strategy without the caveat of the incalculable risks associated with nuclear power, we must move beyond the current combination of solar, wind, hydropower, and waste-to-energy. While these four energy sources have spearheaded renewable energy for the past three decades, we must seize additional opportunities that are immediate and less expensive. This is where a creative approach to utilizing existing infrastructure (municipal wastewater treatment plants, electricity pylons) comes into play. Let's look at the figures. If Germany were to supplement 500 of its 9,600 municipal wastewater treatment plants with high-efficiency biogas generators based on Scandinavian biogas expertise, compared to Ulsan in South Korea, the potential baseload capacity could reach 5 GW at an estimated total investment cost of €10 billion. This investment is roughly five times lower than that of nuclear power, and the time between decision-making and commissioning is limited to two years, compared to a decade—five times longer—resulting in significantly improved cash flow. Biogas offers reliable and predictable production—no one doubts the constant availability of organic waste and wastewater—and thus ensures grid stability. Furthermore, if Germany could install vertical turbines designed by Wind-it (France) inside one-third of its 150,000 high-power transmission towers, it could produce an additional 5 GW, for about one-tenth the cost of nuclear power, totaling €5 billion. There are 1,900 landfills in Germany. If just 20 to 200 hectares of these unused landfill areas were covered by combined heat and power (CHP) generators from Solarus AB (Sweden), which produce 1,830 kWt and 1,360 kWe per hectare with 2,000 units (100 rows of 20), then the potential energy supply increases by an additional 5.44 GWe and 7.32 GWt. The heat can be used to reduce the largest household electricity consumption: water heating. If the lifespan of these panels were greater than 20 years, then the cost per kWh is less than one euro cent!
The first cash flow
Germany's daily electricity demand is around 70 GWh, with peaks of 80 GWh. Nuclear power accounts for 20% of this, or approximately 15 GWh. The calculations above indicate that even with only a fraction of the productive use of the existing infrastructure, it is possible to replace all nuclear power plants (5 + 5 + 5.4 GW). However, comparative analyses indicate that the production cost of these three energy sources is less than or equal to 2 cents per kWh. The current cost of transferring nuclear power to the grid in Germany is 5.6 cents per kWh. At such a low cost, financing is not an issue, and given how quickly these systems can be installed, a nuclear phase-out can even be planned within the next 3 to 5 years, provided that local decision-makers responsible for landfill operations and municipal wastewater management are involved. The unions are all in favor.
The opportunity
The obvious additional benefit is job creation. And the three technologies selected are just a few of the many possible breakthroughs. Imagine if all railways and highways were equipped with Wind-it technology? Imagine if all wastewater treatment plants at major food processing companies adopted a biogas strategy? Imagine if half of German households replaced electric water heating with thermosiphon solar water heaters, reducing their consumption by 15 percent? Germany, already a world leader in green technology exports, could even position itself as the world's largest exporter of green energy by strengthening its metals, machinery, and renewable energy sector, which is based on a robust network of medium-sized companies. However, the most powerful shift in the design of a nuclear phase-out strategy is that the price difference between 2 and 5.6 cents (3.6 cents per kWh) for the 15 GW of nuclear capacity to be replaced accumulates annually to around €4.7 billion. This cash flow, generated by the system through potential efficiency gains from intelligently utilizing existing infrastructure with simple technologies, could be sufficient to finance the nuclear phase-out and cover additional capital requirements over a 10-year period. Now that the liquidity appears to be available, a consensus could emerge that energy companies and local authorities with significant exposure to nuclear investments could benefit from a net present value (NPV) exit strategy – effectively receiving a pre-arranged payment for ceasing nuclear operations. And while the forced closure of the oldest nuclear power plants has already caused their value to plummet by 20 to 25%, and current uncertainty is likely to exert further downward pressure on their shares (TEPCO – the owner of the Fukushima nuclear power plants – has already lost 75% of its market capitalization), it wouldn't be difficult for financial engineers to find a comprehensive solution that would allow for a win-win nuclear phase-out, simply by increasing profits for everyone, thereby reducing risks, and by focusing on innovations that are ready for application. Subsequently, Germany could even become the global financial hub by financing the nuclear phase-out based on consensus and cash flow. This is the ultimate goal of the blue economy: to meet everyone's basic needs with what we have, to offer the necessary products and services that are good for your health and the environment at a lower cost, while simultaneously building social capital. It seems we can see how this can be achieved – faster than we ever thought possible.
