Ireland’s Energy Policy 2008

Getting Ireland’s Energy Policy Right

Mr Gladstone, when accused of changing his mind responded ‘When the facts change I change my mind; what do you do sir?’

The facts, economic, geopolitical, environmental and technological have been changing rapidly in the energy arena and shifting in favour of nuclear.  Mature governments worldwide are emulating Mr Gladstone.

For good reason: countries with substantial nuclear power programmes are seen to be holding down their energy costs and gaining competitive advantage.

France with its 59 nuclear power plants provides a vivid example.  Electricity prices there are amongst the lowest in Europe. In contrast costs in countries such as Ireland and Italy, that lack nuclear power, are the highest. Nuclear plants emit no carbon gasses and France is not challenged in meeting Kyoto commitments.

France is less exposed to Russia’s influence over gas supply and most of the uranium reserves are in friendly stable places like Canada and Australia. 

Much of France’s public transport runs on nuclear-generated electricity, and in future, as more private cars become electric, they too will draw their energy from the nuclear system, rather than from imported oil.

Escalating energy costs, combined with global warming and the prospect of unfriendly states disrupting energy supply, are combining to cause governments to radically review their energy policies.  The rest of the world is moving onwards and changing its thinking and energy policy. Many leading environmentalists are doing likewise. Scientifically literate environmental   gurus such James Lovelock, Patrick Moore and Stewart Brand have changed their minds[1].  The romantic environmentalists generally have not.  Stewart Brand now calls himself an ‘eco-pragmatist’ and says “Coal and carbon-loading the atmosphere are much bigger problems for the future than nuclear waste, which is a relatively minor risk.” He describes some of his former green colleagues as ‘holding onto noble but impractical views that have often been contrary to rational scientific thinking.’[2] There is reason to believe that some who influenced Ireland’s Energy White Paper came from such ranks. 

The White Paper’s lack of rigour and robust economic analysis has been criticised both by Ireland’s business and union leadership.  David Begg, the general secretary of the Irish Congress of Trade Unions, in noting that the Government has ruled out nuclear power as an option up to 2020, is reported as saying “We do not believe it is either wise or responsible to take this line without full exploration of the implications for industrial policy, employment and lifestyle of so doing”  He went on to say “Our position is not pro nuclear but we believe that the nuclear option should not be excluded from a necessary debate on energy security and climate change.  He questioned whether the 33 percent renewable electricity target for 2020 is credible[3]. 

Danny McCoy, the chief economist at IBEC takes a similar position and writes: “…business must be concerned about the lack of integration, robust economic analysis and resources behind the target [of the White Paper]” and “It is time to be realistic, to fully cost all the options delivering an appropriate energy mix that will ensure the competitive position of Irish industry for the future. If options are decided against, such as nuclear, the full cost of such a decision should be made explicit[4].”

Such statements highlight the policy evolution that is taking place at Irish leadership levels. Public policies and attitudes are changing worldwide. The UK has announced that it intends to move ahead with a major new nuclear power programme. Business Secretary John Hutton has called for the UK to lead the world in developing new nuclear technology to create 100,000 jobs and a £20 billion economic boost[5]. UK nuclear policy has not generated major public unrest; indeed a recent poll showed that the percentage of those against nuclear power has shrunk from 60% to 30% in a period of three years[6]. 

The Minister for Communications, Energy and Natural Resources, Eamon Ryan, TD has called for a debate on the matter, but has been accused with some justification of ‘grandstanding’ by the Fine Gael shadow minister Simon Coveney, TD[7].  The Minister’s decision to refuse prospecting licences to two companies seeking to explore for uranium in Donegal gives some insight into is his attitude toward nuclear[8]. It would appear that it is considered tactical to let an unfocussed debate on nuclear ramble on while moving ahead with a major pre-emptive €22bn capital programme[9].  

While Ireland’s industrial electricity costs are at present amongst the highest in Europe it would be helpful were it possible to advise potential investors that the situation is going to improve and the government has a credible plan to make our electricity prices competitive.  Unfortunately neither the Energy White Paper nor government action justifies this. Romanticism, more than pragmatism or robust economic and scientific analysis, appears to have unduly influenced Ireland’s energy policy. Only when the nuclear power plants being designed and constructed in competitor countries come on line during the next decade will the seriousness of the situation become obvious.  Then the price gap between nuclear and Ireland’s preferred options, gas and renewables, will quite likely be considerably greater than it is today…and so will our competitive disadvantage.

The next generation of nuclear plants are reported by France’s AREVA and the US’s General Electric and Westinghouse to be simpler, safer and more cost effective.  In recent years down-time of typical US nuclear plants has steadily reduced and is now closer to 10% rather than the 50% of the 1970s[10]. The US government agency, the Energy Information Administration gives the average 2005 US wholesale electricity price as 5c per kWh.  The Nuclear Energy Institute estimates that the average operating cost of nuclear power plants was 1.7c per kWh.  With margins like this the electric utilities are rushing to build new plants.  Twelve applications were lodged with the US Nuclear Regulatory Commission in 2007 and a further 15 are expected this year[11].

Most European countries are revising their energy policies and nuclear is having a rebirth: new plants are being planned and the capacities of existing ones increased. Small countries such as Finland and Lithuania have placed nuclear at the heart of their programmes[12]. The introduction of private and public electric vehicles powered by nuclear-generated electricity will offer such countries the prospect of radically reducing dependence on oil for transport and seriously tackling global warming in a way not open to Ireland, unless policies change.

Uranium is one of the world’s most abundant metals. At 2004 usage rates known reserves would be enough to fuel the world’s reactors for 85 years. This period could be extended to 2,500 years by using fast reactors. Total world reserves are estimated by OECD to be 7 times greater[13].  While uranium is abundant it can be expected that the rapid growth in demand will put pressure on existing processing facilities and there will be tight supplies in the 2011-2015 timeframe[14]. Existing stores of radioactive spent fuel contain abundant sources of energy that will be seen as an asset rather than a liability in the coming century.  This energy can be released in fast-breeder reactors while at the same time addressing the challenging waste-storage issue. 

Undersea interconnectors to Britain make sense for security reasons; but their high capital cost pushes imported electricity prices seriously upwards. This is not the case for cross-border interconnectors. It is encouraging that an all-island energy market is emerging: North/South collaboration could result in the island’s first nuclear power plants being constructed in Northern Ireland and feeding a tightly linked grid to the South. The North’s heavy-industry traditions and know-how could be put to good use under the umbrella of the UK’s mature nuclear power programme. Dublin could dodge the difficult political issues.

At present the world is facing an energy shortage that has been precipitated by Chinese growth. But the world is not facing a long-term energy shortage: nuclear offers vast quantities of energy at low cost that will meet global long-term needs.   Just now the global energy crunch arises primarily from shortage of time to adjust and put new energy systems in place. Those countries that adopt the right strategy and move swiftly to implement it will come out on top: a position in which Ireland’s current energy policy is unlikely to place it.

IBEC’s call to Government[15] to task the Joint Oireachtas Committees with swiftly delivering cohesive and informed solutions highlights its lack of confidence in Ireland’s current energy policy…and the need for corrective action.

Dr Edward Walsh is founding president of the University of Limerick. He directed an energy research group in the US before returning to Ireland.   087 2376357

[1] Nuclear power’s new age. Economist, 8 Sep. 2007

[2] Jolly green heretic. Economist technology quarterly. p. 28. 8 Sep. 2007.

[3] Hennessey, Mark. Begg wants nuclear option considered. Irish Times. 29 Dec. 2007.

[4] McCoy, Danny. Need for realistic fuel mix. Business & Finance. 15 Feb. 2008.

[5] Britain should increase use of nuclear power. The Times. 26 Mar. 2008.

[6] Nuclear power’s new age. Economist. 8 Sep. 2007.

[7] Matthews, Nicole. Issues ducked not covered. Business & Finance. 1 Feb. 2008.

[8] McGee, Harry. Ryan signals prohibition of uranium exploration and mining. Examiner. 3 Dec. 2007.

[9] ESB goes green in €22bn spend on renewable energy. Breaking 27 Mar. 2008.

[10] Nuclear power’s new age. Economist. 8 September 2007.

[11] Atomic renaissance. Economist. 8 September 2007.

[12] Lithuania, Poland sign power deal, spurring nuclear plan. Spacedaily. 12 Feb 2008.

[13] Uranium 2005: resources, production and demand. OECD, Paris. 2005.

[14] Uranium fuel supply adequate to meet present and future nuclear energy demand. NEI Policy Brief. Mar. 2008.

[15] McCoy, Danny. Need for realistic fuel mix. Business & Finance. 15 Feb. 2008.

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