COLUMN-Efficiency can't replace nuclear power: Gerard Wynn

Fri May 4, 2012 10:42am EDT

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(The author is a Reuters market analyst. The views expressed are his own.)

By Gerard Wynn

LONDON May 4 (Reuters) - Germany plans to phase out nuclear power and Japan may follow, but history shows that neither can make up the energy supply gap with efficiency alone.

That will push them towards fossil fuels, putting climate goals further under stress, illustrating that the world may not be able to avoid low-carbon nuclear.

Germany has already shut all its older nuclear power plants, and announced plans to close the rest by 2022.

Japan has shut almost all its nuclear power at least temporarily, pending safety checks, in the aftermath of the Fukushima disaster.

As a result, both countries have announced plans to boost efficiency and output of renewable energy.

However, economic and energy trends show that both countries will struggle to do anything more than stall rises in energy consumption using efficiency measures, meaning they will have to entirely replace any lost nuclear power.

Renewable energy contributes a rather small amount in both Japan and Germany, and it's inevitable that a large chunk of lost nuclear will be replaced by cheaper fossil fuels.

Given that nuclear power is zero carbon-emitting, a phase-out will only make climate action, already lagging scientists' warnings, more difficult.

EFFICIENCY

One way to measure efficiency is in the amount of energy consumed per unit of economic output, called energy intensity.

Economic output (GDP), energy consumption and energy intensity can be combined in a simple relationship.

Percentage growth in energy use roughly equals the sum of GDP growth (usually positive) and the drop in energy intensity (usually negative).

In other words, to halt rises in energy consumption, GDP growth must be cancelled out by equal falls in energy intensity.

Germany's energy intensity from 1980-2000 declined by an annual average of 2.3 percent, but that has since narrowed sharply to an annual decline of 1.2 percent in the last decade.

That's calculated using BP energy data, divided by World Bank GDP data accounting for inflation and purchasing power parity.

In general, efficiency gains fall over time as easy wins are picked off.

That pattern is visible, for example, in a flattening trajectory in China, as the rapidly modernising economy revamps its fleet of fossil fuel power plants, making further gains in efficiency ever more difficult.

Nevertheless, Germany may accelerate efficiency measures under pressure to shut its nuclear fleet. It could match forecast growth in GDP of about 1.5 percent annually, with equal declines in energy intensity.

Japan has a less impressive efficiency track record, making its task even more difficult.

Again, however, in a post-Fukushima context the country could match forecast GDP growth with redoubled efforts in efficiency.

CO2 EMISSIONS

Both countries could therefore hold energy consumption at around today's levels, despite rising GDP, under renewed efficiency drives.

That still means that each country would have to substitute entirely any shutdown of pre-Fukushima nuclear power.

Before Fukushima, nuclear power accounted for about 10 percent of primary energy consumption in each country.

The rest was almost entirely fossil fuels, with a small sliver of renewable energy including hydropower (7 percent and 5 percent for Germany and Japan respectively).

It can be concluded that the bulk of any retired nuclear power would likely be taken up by cheaper fossil fuels including gas.

In 2009, Germany's nuclear power plants produced 135 terawatt hours (TWh) and Japan some 260 TWh in 2008, according to the International Atomic Energy Agency (IAEA).

If four-fifths of these were replaced by natural gas (less carbon-emitting than coal) that would add about 118 million tonnes of CO2 annually, or 6 percent of their combined fossil fuel emissions.

These findings have wide error margins, but illustrate the impact of removing nuclear power from the energy mix of two of the world's most mature economies.

Notwithstanding the debate about the economic cost of nuclear power, it's clear that removing a source of zero-carbon power when the world is desperately lagging climate goals makes a difficult task harder. (Reporting by Gerard Wynn; Editing by Alison Birrane)

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