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Going Nuclear

Italy is studying to restart their nuclear energy program. USA is looking at this option. In Australia, the Howard government, which has been voted out this year, has also argued the need of adopting the nuclear energy in the name of combating Global Warming (How ironic!). Australia, a major exporter of Uranium, has only limited unclear facility for research and has chosen to remain unclear-free so far.

Therefore, it just makes me wonder: why nuclear energy becomes a trend all of a sudden?

More than 50 years ago, general public in the developed world were more ready to accept the use of nuclear power. At that point of time, people, including the proponents of nuclear plants, believed that nuclear energy will solve energy crisis once and for all. Electricity would become so cheap that it would be too cheap to meter.

Of course, it turns out to be not the case. First of all, the cost to upkeep a nuclear plant is not cheap. Then comes cost of the handling and storage of nuclear waste. Thirdly the consequence of a major accident in nuclear plant, God forbid, is guaranteed to be catastrophic. The downside risk is simply too big to justify the marginal saving of energy cost.

So, why our politicians are so eager to promote the nuclear plant now?

I cannot help but think in conspiracy theory mode: a nuclear plant can only produce cheap energy if and only if a government is willing to bear part of the cost, be it incentive in form of tax concession or subsidy in various forms (e.g. sponsored a nuclear waste processing site using public money).

It is not only costly to build and run a nuclear plant, it is also very costly to close it.

In the other word, once we commit to nuclear energy, then even after we discover a better, cleaner and safer technology to generate energy, we will not be able to make a switch because it is not economical. A unclear plant will not be closed before its end-of-life date simply because better competitors force it out of market by way of market mechanism. It is because the upfront capital investment is so big no investor will voluntarily close it as long as the revenue will cover the operating cost. The astronomical cost to dismantle the nuclear site is also another disincentive. Unless, of course, unless someone come along and pick up the bill. Guess who will that be? Our government again on behalf of all the taxpayers, certainly.

It begs a questions: then why it is attempted at all to lock the general public into the nuclear energy? The nuclear power plants, once they are given the go-ahead, will cement the current centralized energy generation/distribution paradigm into next century, if not eternity. If the unclear energy supporters cannot get their way now, then in next 5 to 10 years, there is a distinct possibility that the renewable energy technology will become sophisticated enough to replace the need of any additional conventional power plants. There will no justification to build any large-scale energy generation plants at all.

It is certainly not a good news for existing energy sector incumbents. And probably mean loss of business opportunity to infrastructure sector and investment bankers. For some existing players in the energy sector, I speculate, they see renewable energy as a subversive technology because of its distributive (or democratic, if you will) nature. A right green energy technology will enable ordinary people to generate energy in their backyards to fulfill the energy appetite of an entire household. It will be a game changer to the current capital-intensive business model.

Some big infrastructure companies and bankers will also naturally prefer big projects like a mega-watt power plants. A plant will create demand for supporting infrastructure around the plant and the building of the the plant itself. Bankers can underwrite and issue debt to finance these projects. The big energy firms are most likely to pay handsome fee for any business and financial advises from the bankers.