Posted by: Dr Pano Kroko Churchill | April 23, 2011

The clear case of the Economic Opportunities from Renewable Energy vs the economic hazard of nuclear and coal energy

The fallout cloud from the Fukushima nuclear disaster is all over the Northern Hemisphere and continually spreading and we need to get prepared for the consequences since it enters the world’s food supply and then enters the bloodstream of people too…

But here am not referring to the contaminated particles that have seeped into the land, the sea and the air surrounding the crippled plant and now spreading the world over, but am talking about the nuclear fallout of a less radioactive but far more political variety. The fallout of responsibility in our Energy choices, our political Leadership, our ideologies and in our Lives at large.

Because even as we speak, only the robots are able to enter the fallen Fukushima buildings blasted with enough radiation to ”burn through” the most advanced protection suit, yet still hundreds of workers at the Fukushima Daiichi power plant are still working there. They are working around the buildings, collecting bits and bobs of fuel rods exploded all over the plant area and throwing water on the spent fuel rod ponds and the reactors themselves, Yet the TEPCO workers are there every day and generally are doing their best to keep the plant from exploding again. Still their work is full of victimhood.

According to reports from the highest level, maybe up to fifty of them have already died in the early days of the nuclear disaster and their losses have been hidden amongst the many losses from the quake and the resulting tsunami, but these were clearly radiation deaths. Yet their brethren just go ahead and do their daily work at the nuclear plant now. And some of them are rightfully being hailed as heroes because they are radiation sponges and know it. A glimpse into their lives shows the high price they are paying to stave off a nuclear catastrophe — 12 hour shifts, very little food, deplorable sleeping conditions and an expectation that some of or all of them will soon die. It’s heartbreaking and telling that industry insiders refer to them as “glow boys” despite their immense sacrifice. The dangers they face seem to get worse by the day. Because the task of keeping the plant’s nuclear fuel rods, from exploding and  keeping them cool under water, might go on for years. For these Fukushima worker teams there is, quite literally, no end in sight.

And as if that’s not enough, the very basic conditions in which they’re living and working are also inexcusably dangerous and really bad for human health too. This is a high-stakes game and a small memento of the larger state of affairs endured by hundreds of thousands of homeless and refugees in Japan’s Fukushima nuclear disaster.  Kazuma Yokota, a safety inspector at the plant, provided some information to CNN about the conditions of the 400 workers living in a building a little over a half-mile away from Daiichi. Sleeping with one blanket and a leaded mat intended to protect them from radiation, the employees work in 12-hour shifts on three-day rotations. They eat twice a day – a breakfast of vegetable juice and some crackers, and a pre-prepared meal pouch for dinner. With few deliveries coming in, water is scarce too. Yokota told CNN that Tokyo Electric Power Company, plans on improving the workers living conditions, but it’s hard to imagine how the rights of these workers will be prioritized on Tepco’s growing list of the things going very, very wrong.

The power company’s so-called “feed and bleed” approach, in which fresh water and seawater are being poured into a reactor and stored fuel pools, could go on for months or years. It’s already making workers’ bad conditions significantly worse: As more water goes in, more contaminated water pours out, collecting around the work site in trenches and pools that workers paradoxically must avoid and contain. Last week, three workers were hospitalized for radiation exposure on their feet and legs while working at reactor 3. Three more people were glowing yesterday and had to be rushed into the hospital and on and on.

It goes on like that for a long while apparently.

And with the number of victims rising daily, and unknown numbers of short and long term victims of this nuclear disaster, this feels like a war.

Because only war with it’s vast numbers of victims can be compared to large scale nuclear disasters. Think of it: War is somewhat localized like the Iraq war and it does not transcend borders like the nuclear fallout cloud from Fukushima does…

But what about the Investors of the TEPCO stock and the bond holders and even the Fukushima nuclear plant suppliers and even designers and investors? They’ve all felt the disaster in their net worth. But they remain hopeful for a government bailout… Albeit if and when this comes, it will be restricted to TEPCO itself and will not cover private investors. The rest will have to cover their losses some other way or just chuck it…

Grin and bear it is my advise. And maybe next time You’ll get luckier if you go towards renewable energy investments….

And with TEPCO being a blue chip company till the nuclear disaster struck, the small stock holders are screaming bloody murder. I can’t wait to hear how their general stock holders assembly meeting goes. For it promises to be lively… No wonder the Japanese people want a rethink of their country’s reliance on Nuclear Energy…

In the German state of Baden-Württemberg, the anti-nuclear German Green party won a stunning upset victory over Angela Merkel’s Christian Democrat Union on March 27, despite Ms. Merkel’s last-ditch effort to win voters by announcing the temporary closure of some of the country’s oldest reactors. When the usually reticent German people found out that the Christian Democrats were lying about their shift in policy and only used the nuclear fear as a strategic shift in their otherwise nuclear friendly long term policies, the voters pounced and punished them severely. Now Ms Merkel – licking her wounds – wants to stop all nuclear energy in Germany lest the German voters stop all of her and her party dead, in their tracks.

China temporarily suspended approvals for new nuclear plants, and announced that it would likely scale back its nuclear ambitions, decreasing the proposed share of nuclear power from 5% to 3% of the total power supply by 2020.

In the US, President Obama said we’ll have a review of nuclear safety and all plants and their standards of operation to avoid another Gulf of Mexico type nuclear disaster or a Fukushima type in near urban places and since most nuclear plants are located on earthquake rifts and seismic zones, he seems to be right on the money…

UK’s deputy Prime Minister Nick Clegg suggested the government may be rethinking its plans to build a new generation of nuclear reactors:  ”We have always said there are two conditions for the future of nuclear power. New plants have to be safe, and we cannot let the taxpayer be ripped off. We could be in a situation now where the potential liabilities are higher, which makes it more unlikely to find private investment” he said after the Fukushima blow up. If this sounds like the understatement of the year — it sounds so because it is.

Nick Clegg will speak at the Green Bonds Ministerial Summit conference in London on May 11th and we’ll hear more abut it. Yet the smart money has already moved to Renewables…

In India scores of demonstrators are battling the police in an area where the government wants to built a new nuclear plant in Jaitapur and in response, the Prime Minister Manmohan Singh says they will have a thorough design and safety review of the proposed nuclear plant again and then will decide if it will get built.

But ultimately — please — do not think that these government leaders have gotten a soft spot in their heads or in their heart for the bleeding people. No, but it is a pure self serving desire to maintain themselves in power and allay the concerns of the people. And they also fear the black hole nuclear economics that simply don’t add up. Nuclear Energy is a bottomless pit. That’s why it’s favoured by the greedy developers and opaque government agencies…

By the way have you tried to get new insurance rider for a Nuclear plant lately?

Give it a go…

And please let me know, How it goes.

Because by now both governments and investors must be starting to realize that not only the smartest money is on clean energy, but also the safest long term capital values can be found there. And because, no amount of back stopping support and financial guarantees like the ones offered by the US White House and the Obama administration — the more than $ 87 Billion earmarked for new nuclear plants — will be enough to cover their liabilities in the event of another deadly disaster. Liabilities and losses that will be borne of the investors and carried by them too. And with  the radiation disaster still unfolding and new scientific and economic research backing the valid view, that clean energy is far more economical when all is said and done, we are confident that Nuclear is not good enough at any price. Even for free…

You can ask my friend Amory Lovins for that or just look at this evidence from economists and our friend Christian Parenti of the Nation: http://www.thenation.com/article/159997/nuclear-dead-end-its-economics-stupid

And if you want confirmation for the investment disaster, just go upstream, because the leaking radioactive material from the Fukushima Nuclear Power Plant has poisoned the entire global uranium market too.

Every nuclear- and uranium-related asset on the market has suffered drastic devaluations. The price of uranium oxide (U3O8) — the most commonly-traded physical form of the nuclear fuel — fell some 32% from $74 to nearly $50/pound in the spot market immediately following the Fukushima nuclear reactor explosions. Since that time, the price of U3O8 remains 24% lower than it was right before the Fukushima disaster. And the Uranium stocks have fared no better. Companies involved in all aspects of the uranium industry — from exploration to production and processing — have also suffered serious market losses. In the past six weeks alone:

  • Cameco (NYSE: CCJ) has fallen 37%
  • Denison Mines (AMEX: DNN) is down 44%
  • Uranerz Energy (AMEX: URZ) dropped 36%
  • Uranium One (TSX: UUU) has lost 39%
  • USEC (NYSE: USU) is off 33%
  • Uranium Resources (NASDAQ: URRE) has slumped 38%
  • Ur-Energy (AMEX: URG) fell 42%

For a broader look, the Global X Uranium ETF (NYSE: URA) — which tracks 23 of the largest uranium companies — has plummeted 31% on the day of the earthquake and is still some 28% below pre-crisis levels. And this current level is only supported by the ridiculous governmental subsidies, the present long term contracts, the fixed price delivery options and the artificial government controls of this strategic mineral — otherwise the price would have gone through the floor as it might very well go still. And since markets price long term risk this seems to be the long term trend… Just a few months ago the Uranium traders were talking about a Peak Uranium similar to Peak Oil… and a shortage coming on top of the promised Nuclear Renaissance.

Well how is them apples now?

And then there is the counter opportunity offered by Renewable Energies. Now that is a fantastic opportunity for investors. And an opportunity to buy and invest into all manners of renewables and to make money to boot while being of service to the planet. Doing well by doing good has never been easier…

Let’s keep in mind that the clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630%  growth in finance and reflecting the very same increases in investments since 2004. In 2010, alone worldwide finance and investment grew 30% to a record $243 billion.

But we are not out of the woods yet. Because the biggest risk right now is that governments and their utilities will look to high carbon energy sources such as coal, shale, frack gas or tar sands to warm the people and run their economies. But the urgency of the greenhouse effect, the warming planet’s atmosphere and the CO2 human caused climate change, suggest this is no time to jump back into the fire.

FUK-U-SHIMA is now mentioned amongst investors as FUCK, U, US, HIM, All.

But it’s also worth remembering the ongoing devastation wrought by the British Petroleum Gulf of Mexico oil spill on the balance sheet of many institutional investors and simple high street investors too.

And with the BP oil spill one-year anniversary this April, things get tricky. Because people died there too and many hundreds now are injured with long term debilitating diseases and toxic poisonings and even MS amongst the many clean up workers. Now BP has set up a $20 billion fund, of which $4 billion has already been paid, to settle claims by businesses and individuals but the sick people haven’t gotten any medical help from this fund and surely Class Action lawsuits will be soon coming for the human toll too. And this is on top of the actual costs to BP itself, and its insurers, it’s shareholders, and all those hedgies and the bankers holding low value paper, it’s debt holders and the average British Petroleum small stock owner holing for a coupon dividend… Moreover, US authorities will be prosecuting BP senior officers, board members, regional and even oil platform managers and their direct leadership for manslaughter due to their cost-cutting measures which compromised safety and caused the Gulf disaster.

And let’s not forget the thousands of coal miners who die each year, or those who die of respiratory illnesses linked to air pollution spewed out by coal-powered plants. A report by Sierra Club puts the death toll at 4,000 per year in just the Northeastern region of the U.S. alone. Or the hundreds of thousands of people dead from the cancers wrought to them by Chernobyl nuclear disaster and going to be seen again after the Fukushima disaster too.  See here: https://panokroko.wordpress.com/2011/04/22/fukushima-victims/

As governments around the world now grapple with the implications of Fukushima, we have a window of opportunity to fill the nuclear vacuum with safe, reliable renewable sources of energy. Japan is already thinking along these lines. As reported by NHK: ”Pursuit of solar power, bioenergy and other clean energy sources will be a key pillar of the government’s reconstruction strategy to be drawn up for areas hit by a massive quake and tsunami following the country’s worst nuclear accident,” top government spokesman Yukio Edano said Tuesday.

Just last week, yet another study was published showing that we can make the transition to a completely renewable energy infrastructure, in this scenario by 2030: ”Global Solar Transition Achievable in 20 Years – Even With Peak Oil”  it says.

A new peer-reviewed scientific report published by the Institute for Policy Research & Development (IPRD) in London concludes that the world can undergo a rapid transition to a completely renewable energy infrastructure by 2030. The report argues that such a transition is necessary to respond to the twin crises of fossil fuel depletion and climate change. It shows that technologies such as wind turbines, solar photovoltaic (PV), and concentrated solar power (CSP), with a baseload capacity provided by existing storage technologies and petroleum as it is phased out, can produce enough energy consumption per person to sustain high human development requirements for all.

Co-author Professor David Schwartzman of Howard University said: “Our study models how much fossil fuel resources we will need to make the transition to a full renewable energy infrastructure. With only 1 per cent of current annual consumption of fossil fuels being used for creation of solar power per year, we can achieve a global-scale transition in no more than thirty years – and with modestly greater inputs, fossil fuels canbecome superfluous in only twenty years. Moreover, this transition can be accomplished with less than one-third of the proven reserves of conventional petroleum serving to insure adequate global energy needs culminating into a full solar takeover.”

The report shows that by reducing the world’s dependence on oil, this energy transition can increasingly buffer the global economy’s vulnerability to oil shocks induced by accelerating energy depletion. But we also need to consume less energy.

“Optimally, this transition should be combined with an aggressive policy of energy conservation”, said co-author Professor Peter Schwartzman of Knox College. “In the United States, for instance, conservation could reduce oil consumption by more than half by 2025, and for industrial countries overall by up to 35 per cent – while improving the quality of life. But we have to act immediately. If we wait a few decades, we couldpermanently lose our chance to get this transition off the ground.”

Assuming a minimum of 3.5 kilowatt per capita necessary for a world standard high human development index (hdi), in the report’s conservative “best case” scenario, a renewable energy infrastructure could double present global power capacity to 32 terawatts (TW) in 25 years. This would provide a minimum energy supply corresponding to 3.5 kilowatt per capita for up to 9 billion people. However, increases in efficiency resulting from using solar power in industrialized countries could significantly reduce the energy needed to supply this hdi. This could be achieved at current population levels with 16.7 TW – which is only 5 per cent higher than the present global power capacity.

IPRD Executive Director, Dr. Nafeez Ahmed, said: “There is a probability of a major convergence of food, energy, water and economic crises by around 2018 without drastic change – signs of which are already appearing in the form of the Arab uprisings. We are therefore pleased to publish this new study which rigorously models the prospects for a comprehensive renewable energy transition. So far, despite the rhetoric, government efforts to support transition have been too little, too late. This report proves clearly that the way forward is for the industrialized world to eliminate its wasteful energy consumption while demilitarizing the economy and investing rapidly in new renewable technologies – and that this is really the only way to maintain well-being and prosperity while solving the challenges of peak oil and global warming.”

In less than a decade, clean energy has grown from a small, niche industry to a significant source of trade, investment, manufacturing and job creation.

“The clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630 percent growth in finance and investments since 2004,” said Phyllis Cuttino, director, Pew Clean Energy Program. “In 2010, worldwide finance and investment grew 30 percent to a record $243 billion.”

New research by The Pew Charitable Trusts reveals that China has solidified its position as the world’s clean energy powerhouse. China attracted a record $54.4 billion in clean energy investments in 2010–a 39 percent increase over 2009 and equal to total global investment in 2004. Germany saw private investments double to $41.2 billion and was second in the G-20, up from third last year.

The United States, which had maintained the top spot until 2008, fell another rung in 2010 to third with $34 billion in private clean energy investments. The United Kingdom experienced the largest decline falling to 13th from fifth.

What is causing all the jockeying for leadership? The report confirms that national policy matters. Countries like China, Germany, Italy and India were attractive to financers because they have national policies that support renewable energy standards, carbon reduction targets and/or incentives for investment and production and that create long-term certainty for investors. However, there is ambiguity surrounding clean energy policies in the United States and the United Kingdom, which likely has caused investors to look elsewhere for opportunities.

Michael Liebreich, CEO of Bloomberg New Energy Finance, added, “The United States remains the global leader in clean energy innovation, receiving 75 percent of all venture capital investment in the sector, a total of $6 billion in 2010, but the U.S. has not been creating demand for deployment of clean energy. As a result it is losing out on opportunities to attract investment, create manufacturing capabilities and spur job growth. For example, worldwide, China is now the leading manufacturer of wind turbines and solar panels.”

Among the various technologies, the solar sector experienced the strongest growth, led by small-scale residential projects. Feed-in tariffs, wherein utilities guarantee to pay a fixed rate for energy derived from clean sources, and declining prices helped the solar sector see investments grow 53 percent to a record $79 billion, facilitating the installation of more than 17 gigawatts of new generating capacity globally. In fact, Italy is the first country to achieve grid parity, or cost-competitiveness, for solar energy.

But some low-carbon advocates, normally friendly to the environmental camp, have environmentalists stretching their heads. Rather than leveraging the crises at hand to help accelerate the shift to renewables, they are running a rearguard action to promote the benefits of nuclear power.

But choosing our energy future does not have to be borne out of our past.

We’ve all made mistakes. There’s no reason to keep on repeating them.

Given the 30-50 year lifespan of a nuclear power plant or a coal electricity plant built today, and with the easily gotten Life extensions – of the same length of time – the utilities hope to have it around for a little less than a century;  we might as well get used to it. Right ?

Wrong.

Wrong because we are smart investors and smart citizens. Wrong because we not only owe it to our children and grandchildren to get it right, but because we owe it to ourselves…

Wrong because we are the ones working, living and dying because of this.

Yours,

Pano

PS:

Quite apart from the long-term risks from climate change,  we should throw down the gauntlet to anyone advocating expansion of nuclear, coal, petroleum-based or other hazardous and human detriment energy technologies to ”Go live with it.”

Would you be happy to live next or near to the Nuclear plant such as the 20 million people who live within 50 miles from the Indian Point nuclear plant right around New York City?

The New yorkers don’s seem to like it much right?

Would you care to send your son or daughter to work in the coal mines or to clean up after an accident at a nuclear power plant?

Do you mind that their thyroid right about now is stocking up with nuclear radiated iodine flying up in the atmosphere all over the Northern hemisphere?

Would you accept a coal factory or a nuclear factory in your neighborhood?

Would you accept an oil rig off your nearest vacation shore?

PS2:

Let me know on these and the smartest response will get their wish granted.

PS3:

But for now the simple serious respondent that offers the most intelligent answer will be admitted to the Green Bonds Ministerial Summit in London gratis…

A thousand quid gift is what this represents.

And for VCs and their companies in Clean Energy, this s a welcome opportunity to enter the Green Bonds Renewable Energy venture bazaar too.

And this represents the best access to Renewable Financiers ever in London.

The Green Bonds Environmental Finance is also the best method for getting their renewable Energy projects sorted and their plans up and running with the best and lowest cost finance that doesn’t dillute their ownership structures. And for New Renewable Energy Companies and even the new energy start ups — that opportunity is really cool.

Even the Green Bank of the UK – newly christened – has asked us to use Green Bonds in order to augment it’s capital base and in order to be more effective in serving the overwhelming need of low cost finance for Renewables in the UK and especially around the developing world.

Happy Easter and Happy New Earth Day to You.


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