Viewpoint: Nuclear's stand-out resilience in an energy crisis
When it comes to energy, global market shocks are good at turning assets into liabilities. Except, that is, when the energy is nuclear, writes Alexander Uvarov, editor-in-chief of AtomInfo.ru.
"The current oil crisis, which erupted against the backdrop of COVID-19, has, according to Scott Lauerman, a spokesman for the American Petroleum Institute, reduced global oil demand from around 100 million barrels per day (prior to the pandemic) to about 30 million barrels a day. It is no wonder then, that such a stark and sudden loss of demand would reduce oil tankers to simple storage containers."
The current oil crisis, which erupted against the backdrop of COVID-19, has, according to Scott Lauerman, a spokesman for the American Petroleum Institute, reduced global oil demand from around 100 million barrels per day (prior to the pandemic) to about 30 million barrels a day. It is no wonder then, that such a stark and sudden loss of demand would reduce oil tankers to simple storage containers. Dozens of oil tankers lie-in-wait off the coast of California, as do many others in Asian and European ports. With 160 million barrels of oil stored in "supergiant" oil tankers, Goldman Sachs analysts, as of last month, forecast that global oil storage could already have hit its limit. Oil prices plunged to historic lows briefly turning negative.
Natural gas is set to follow the same path as gas storage even before the pandemic was full because of the mild winter. Gas flows via pipelines have ground to a halt.
'Self-isolation' across the world turned swathes of the global economy idle and with little need for power. Take Germany. While the country's electricity grid coped well these past 'lockdown months', with an unusually high share of renewable power (mainly due to strong winds in April), low demand in neighbouring countries meant that Germany found itself in record negative power prices, as it could not export as much excess electricity from its renewable energy sources as it used to. Which, according to Dave Jones from Ember (a British climate think tank), could ultimately, translate into high costs for households and small businesses, as well as the instability of the whole electricity system. According to Hanna Koening from the Aurora Energy Research consultancy, this outcome emphasises the need to make both conventional and renewable power generation more flexible to cope with the share of renewable energy that is set to rise in the coming years.
But can renewables and 'conventional energy', which is still a sort of euphemism for 'fossil fuels', really deliver the required flexibility? In fact, disparaged by its detractors as it is for being costly and slow to build, nuclear energy demonstrates the greatest resilience. Firstly, because nuclear is a stable and dispatchable source of energy: unlike intermittent sources, such as wind, nuclear power output can be tuned to demand. And secondly, because uranium is highly energy intensive. One uranium fuel tablet (weighing 4.5g) is capable of producing as much energy equivalent to the following: 480 cubic metres of natural gas or one tonne of coal. One fuel rod which weighs about a kilo-and-a-half carries as much energy as 120 tonnes of oil. The physical volumes of nuclear fuel supplies are so insignificant that the costs of transportation and storage are paltry compared with those of fossil fuels.
Given that, at this point, we have no clear idea of when the world can go back to 'business as usual', if at all, loaded tankers will continue to stand idle, damaging the environment in the process. Though these certainly do not produce as much pollution as they would in transport, fuel still needs to be burned to provide the team on board with electricity to power lights, equipment and heat the large volumes of crude oil in their tanks. Meaning that their daily carbon footprint amounts to driving about 16,000 passenger cars.
The downturn in oil, gas and coal market prices has led to a delay in a large number of projects. To name a few, in the USA and China, both the Shell Beaver County and the Sinopec-SK Wuhan, have been postponed to next year. But whilst the fossil fuel industry waits nervously for a time when business can resume, nuclear fuel supplies and ongoing projects have not changed as a result of the pandemic. This May alone, unit 1 of Belarus NPP successfully received an initial nuclear fuel supply, keeping it on track to go online later this year; and the UAE became the first peaceful nuclear energy operating nation in the Arab world, following the successful completion of fuel assembly loading into unit 1 of the Barakah Nuclear Energy Plant. Whilst in Finland, RAOS Project Oy and the Finnish nuclear regulator STUK made history by carrying out virtual inspection of the plant in line with social distancing measures.
With their planned operational lifetime spanning over 60 years, new nuclear reactors are partitioned off from the vicissitudes of demand volatility. New nuclear build projects are proven to create jobs and boost economic recovery badly needed for the post-COVID world. Construction takes time and patience but, as the saying goes, slow and steady wins the race.
Alexander Uvarov
