If Japan can go nuclear-free after being tied into a grid for more than four decades, what's to stop other countries following suit? And more importantly, why shouldn't their nuclear reactors be shut down?
Source: SXC.hu.
On one hand, nuclear power has proved itself to be a very clean, safe, and affordable form of energy. According to the Nuclear Regulatory Commission, there are 100 licensed nuclear power plants operating in the U.S. generating 20% of the country's electricity needs. Exelon (EXC 2.37%) is the largest domestic operator of nuclear plants, with 10 power plants and 17 reactors powering some 17 million homes in Illinois, Pennsylvania, and New Jersey. It's fleet represents one-fifth of the country's capacity.
While the Three Mile Island calamity may represent to nuclear power opponents what can go wrong with nuclear power here at home, it also epitomizes all that's right with the industry in the U.S.: the redundancy of safety features and backup measures prevented what otherwise might have been a huge calamity.
But then there's Chernobyl in Russia and Fukushima in Japan to underscore the very real risks nuclear power represents. In the former, government ineptitude led to catastrophe such that families who lived within a 1,000-square-mile area around the reactor are still prohibited from returning to their homes because of unsafe radiation levels. In the case of Fukushima, a natural disaster created an even larger man-made one, and we're still assessing the impact from the fallout. Just the other day, the plant dumped 1,000 tons of contaminated water into the ocean.
Germany, for one, has decided enough's enough and will be going nuclear-free by 2022. It's already shut down eight of the country's 17 reactors, plans to phase out another six by 2021, and will close the rest by the deadline. It also has in place a fairly ambitious goal of having 80% of the country's electricity needs generated by renewable sources by 2050.
There's been ancillary fallout as well. BHP Billiton (BHP 0.22%), one of the leading uranium miners, has delayed expansion of its Olympic Dam project in Australia, the site of the world's largest uranium deposit, and production at the site fell 2.5% in 2012. Last year the miner also agreed to sell its Yeelirie deposit in western Australia to Cameco (CCJ -0.14%) for $433 million.
Cameco is also one of the world's top uranium producers, and its second-quarter earnings report was surprisingly strong despite the weakness it admits is still present in the industry because of Fukushima. Even so, it is still restructuring its business and looking for ways to cope with the dim prospects by cutting costs further.
It says the fact that Japan's reactor operators have applied to restart their plants suggests the situation will eventually improve, but following the earthquake and resulting tsunami, Japan turned off power at all 50 of its commercial reactors to conduct a safety inspection. Because of extreme public hostility toward nuclear power, the operators have been unable to turn them back on, and despite the government's attempt to create hysteria by saying blackouts would occur if they weren't turned back on, the chaos never ensued.
Two reactors owned by Kansai Electric were allowed to reactivate last July, but one of them was shut down this month for another inspection, and the second was shut off this week. Although the plant operators have filed to restart their reactors, it's not just the government that needs to give approval, but local officials as well have to sign off. Considering the climate surrounding nuclear power there, that seems like a dim possibility.
Also generally left unsaid is what to do with the waste these plants produce. Spent fuel is stored in pools on site at the plant, and when they're filled up, it's put into dry casks -- steel and concrete cylinders -- that are also stored on-site. Other low-level waste is stored at federally approved sites across 37 states, while high-level waste is buried under Yucca Mountain in Nevada. Essentially, we have stockpiles of nuclear refuse just scattered around the country.
Although nuclear power is relatively safe and certainly cheap, it doesn't require too many disasters like Fukushima to scuttle the idea that it's still safe. Japan has gone from generating a third of its power from nuclear to zero, and Germany is flipping the switch, too, albeit more slowly. I foresee other countries eventually following suit, particularly should another catastrophe strike, and I view the nuclear industry as one that has a clock ticking down on it.
