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The Reality Is that the Market Has Said “No” to Nuclear and “Yes” to Renewables

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Interview withPaul Dorfman*

Is climate change a significant threat to our world’s well-being and why should it be at the top of the global agenda?

Climate change is perhaps the most significant threat to the well-being of humans and biodiversity. With increasing knowledge, we are all understanding the existential threat that climate change is posing to us and will pose to our children and our grandchildren. There is no question, but that climate change is perhaps the key issue of our time and unless we take action very, very soon, there is a significant risk that our planet may become uninhabitable in many parts of the world. And there’s also no question but that sea level rise and the change in temperatures will have an epochal, enormous influence on all our futures.

You mentioned the need for taking action. What actions could be considered productive?

With mounting recognition of the speed and pace of the low carbon energy transition needed to mitigate climate change, it seems absolutely essential to build low carbon energy societies. This challenge may involve a series of differing technically and economically viable options, including the expansion of renewable energies in all sectors, rapid expansion and modernization of electricity grids, improvements in energy efficiency and energy management, the use of modern technologies to minimise electricity consumption, rapid enhancement of storage technologies, market innovations from supply to service provision, intelligence deployment of limited gas resources, and the fundamental restructuring of our built and transport environments.

As for nuclear energy, can it be used to help mitigate climate change? What are the problems associated with nuclear energy?

With mounting public concern and policy recognition over the speed and pace of the low carbon energy transition needed to mitigate climate change, nuclear power has been reframed as a response to the threat of global warming. However, at the heart of the question of nuclear power, there are differing views on how to apply foresight, precaution, and responsibility in the context of the poor economics of nuclear, the possibility of accidents, the consequences of those accidents, and indeed whether there exists a place for nuclear at all within the swiftly expanding renewable evolution.

When one considers nuclear, it is absolutely important to consider its life cycle in terms of carbon emissions. A study by Prof Benjamin Sovacool looked at 103 different studies and concluded that the average value for nuclear in terms of life cycle emissions was about 66 grams of carbon dioxide for every kilowatt-hour produced. This compares to about 9 grams per kilowatt-hour for wind and 32 grams per kilowatt-hour for solar. This puts nuclear as the third-highest carbon emitter after coal-fired plants and natural gas.

So, in terms of carbon emissions, nuclear is lower than fossil fuel but produces significantly more carbon dioxide in terms of its life cycle than renewable power. And perhaps more importantly, with ramping predictions for sea level rise and climate disturbance, nuclear will be an important risk, since climate change will impact coastal nuclear plants earlier and harder than is currently expected. Proposed new reactors, together with radioactive waste stores, including spent fuel located on the coasts, will be vulnerable to sea level rise, flooding, and storm surge. These coastal sites will need considerable investment just to protect them against sea level rise, and in the medium term, they will even be subject to abandonment or relocation.

Adapting coastal nuclear power to climate change will entail significantly increased expense for construction, operation, waste storage, and decommissioning. Inland nuclear power plants will do no better. This is because they must be cooled by significant amounts of water and they have to shut down if that cooling water is either too warm or the river flow is reduced. These are two factors that will absolutely happen with increased climate change. We are seeing this already in France where their reactors stationed by rivers, reliant on river water for cooling, have both diminished river flow and increased water temperatures in the summertime. That implies that there will be a significant inland nuclear station nuclear power shutdown in the future.

The other problem is one of economics, since nuclear is so hugely expensive. Carrying on constructing and prolonging the life of current nuclear plants is enormously costly. New construction is eye-wateringly expensive, which means that if we continue to build nuclear plants, we have much less resource, money, to put into the real solution to climate change, which is renewable power, demand-side management, and storage.

What are the advantages of solar and wind power?

A recent report by Standard and Poor, the key market analyst, found that renewable energy technology global investment has been running at about 350 billion dollars per year for the last few years. But for nuclear, it fell to about 17 billion for last year.

Standard and Poor say that they see “little economic rationale for new nuclear build in the US or Western Europe owing to massive cost escalations and renewables cost-competitiveness, which should lead to a material decline in nuclear generation”. Similarly, Lazard—the world’s leading financial advisory and asset management firm—has just compared the cost of new nuclear, which runs at about $119 to $192 per megawatt-hour, compared to $32 to $42 for utility-scale solar and between $20 and $54 for onshore wind per megawatt-hour. So there is a huge cost difference between nuclear and renewable technologies. Lazard go on to say that the unsubsidized, levelized cost of energy of large-scale wind and solar are at a fraction of the cost of new nuclear or even coal generators, even if the very great cost of nuclear decommissioning and ongoing maintenance is excluded.

Bloomberg New Energy Finance agrees with Lazard’s analysis. The key disadvantage to nuclear power is that it is just too expensive. For renewables, the cost is far lower and continues to fall, which is why what we see is the majority of new nuclear only being constructed with the support of vast state and public subsidy. So, given the reality that funding is limited, we need to make a choice between very expensive nuclear and very inexpensive renewables.

What hinders investments in renewable energy?

In fact, all of the markets are putting all of the money into renewable energy and none of the markets are putting their money into nuclear. There is no market investment in new nuclear. All the investment is going into renewable energy, as I have just discussed. The only problem is, of course, is that if governments via state subsidy put enormous amounts of the low carbon energy budgets into nuclear, they will have less money to invest properly in real low carbon energy technologies such as renewables, storage, and demand-side management.

What initiatives could help promote investments in renewable energy?

I do not think renewable energy needs pushing. The cost of renewables is a fraction of the cost of new nuclear. As Mr. Tanaka, a former director of the International Energy Agency and a former long-standing nuclear advocate, says, “nuclear is ridiculously expensive and uncompetitive”. So, nothing really needs to happen for renewable energy investment to grow. The reality is that the market has said “no” to nuclear and “yes” to renewables.

Under the Biden administration, the US is expected to rejoin the Paris Agreement. What are the benefits of this agreement?

Well, the US has taken a step back from the brink of the disaster that has been the Trump administration, which has been a catastrophe for the US and for the world. Trump was a disaster for international relations, including US relations with Russia. There is no question but that the new Biden administration will re-join the Paris agreement, which will help to save our planet. Over the last four years, the climate agenda has begun to reach the top of everybody’s political agenda. And the reason is, of course, that climate change could change our world. So, it is a hugely hopeful step that the new US administration will re-join the Paris agreement, and it looks increasingly clear that the US will work very hard to make an impact on its own very high CO2 emissions.

In your opinion, what initiatives could help promote Russia-Europe collaboration in mitigating climate change?

It is clear that cooperation between countries is essential in order to mitigate climate change. We have only one world, no planet B, and we are all live in it together. The effects of climate change will impact everybody. One of the keys to helping mitigate climate change is increased diplomacy, increased talking, increased cooperation between states, not least because we will need to substantially upgrade interconnecting grids to share electrical power.

With these interconnecting grids, will also come greater cultural, political, societal interconnection. When the wind blows in Germany and not in Georgia then, via interconnectors, it would be possible to shift power from one place to the other. The same is true of the sun. If the sun shines in the south of France and not in Vladivostok, it will be possible to transfer power via future grid connection. So, via these physical networked power connections, our countries will be increasingly tied together in terms of mutual support.

When one looks at the picture in terms of how to generate that power, given that Germany uses about 20% of all EU electricity, the Bundestag’s decision to close all nuclear power reactors and invest in renewables, energy efficiency, grid network infrastructure, and transboundary pumped storage hydroelectricity may prove significant for European energy policy and also international energy policy as a whole. When one looks at questions of low carbon energy, one looks at best practices, where it is working well. At the moment it is working well in Germany.

In the journey to manage the decline of fossil fuels, not all low carbon technologies are equal. The reality is that nuclear is far less benign, far more expensive, and far more carbon-intensive than other renewable options. Nuclear will struggle to compete with the technological, economic, and security advantages of the coming renewable evolution. In bidding goodbye to fossil fuels, we should also say goodbye to nuclear. And given the ramping costs and risks that cling to this, essentially late 20th-century technology, it is not before time.

*Dr Paul Dorfman is Honorary Senior Research Associate at the UCL Energy Institute, University College London; Chair of the Nuclear Consulting Group; Member of the Irish Govt. Environment Protection Agency Radiation Protection Advisory Committee; Member of the International Nuclear Risk Assessment Group. Paul served as Secretary to the UK Govt. scientific advisory Committee Examining Radiation Risks from Internal Emitters; led the European Environment Agency response to Fukushima; and served as Advisor to the UK Ministry of Defence Nuclear Submarine Dismantling Project.

From our partner RIAC

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Maximizing Nickel as Renewable Energy Resource and Strengthening Diplomacy Role

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Authors: Nani Septianie and Ramadhan Dwi Saputra*

The development of the times and technology, the use of energy in the world will continue along with the increase of population. Global energy demand is currently recorded to have increased three times since 1950 and its use is estimated to have reached 10,000 million tons per year. Most of the energy is produced from non-renewable materials such as coal, gas, petroleum, and nuclear energy. Besides being non-renewable, fossil-based energy is also not environmentally friendly because burning fossil fuels produces CO2 gas which can cause global warming. Based on the energy used previously, the world still uses fossil energy that used in conventional vehicles that still use gasoline as fuel. Where fossil energy itself is still classified as the energy that is not environmentally friendly because it produces carbon emissions that can pollute the environment. Therefore, the world is currently flocking to make renewable energy by electric vehicles that are more environmentally friendly.

In electric vehicles, batteries play a very important role in the components of electric vehicles. Currently, there are two types of batteries that are the most common and widely used for electric vehicles. The first is a lithium-ion battery and the second is a nickel-based battery. But keep in mind for the type of lithium-ion battery itself, nickel is also the main raw material needed. Lithium-ion batteries commonly used to store power in vehicles are Lithium Manganese Oxide (LMO), Lithium Nickel Manganese Oxide (NMC), Lithium Nickel Cobalt Oxide (LTO). The reason for using nickel as a raw material for electric vehicles batteries is more environmentally friendly, nickel is also considered to be more efficient. Because nickel is a metal that has a high energy density storage and cheaper than using other types of minerals such as cobalt. As the popularity of electric vehicles continues to climb due to their increasing demand, the future of nickel production will also be brighter in future. Demand for automatic mining commodities will continue to grow, to encourage companies and producing countries to be eager to increase production.

Reporting from Investing News, Monday (10/26/2020) there are 10 largest nickel producing countries in the world, namely the United States in the tenth position with total production: 14,000 Metric Ton (MT, the ninth position Cuban countries with total production: 51,000 MT, the ninth position is Cuba the the eighth countries are Brazil with total production: 67,000 MT, the seventh position is China with a total production of 110,000 MT, the sixth position is Canada with total production: 180,000 MT, the fifth position is Australia with total production: 180,000 MT, the fourth position is New Caledonia with a total production: 220,000 MT, the third position is Russia with a total production of 270,000 MT, the second position is the Philippines with a total production: 420,000 MT, and the first position is occupied by Indonesia with the largest total production of 800,000 MT. Indonesia has been used as a benchmark by many parties regarding the seriousness of a country to enter the Nickel trend. In 2019, it was reported that nickel production will be bigger than palm oil production, which is the second largest commodity to be exported. Its relatively affordable distance from China, which is a leading country in the production of electronic vehicle manufacturers, makes the export process of this commodity very ideal. Indonesia also still has nickel reserves of 21 million MT.

Nickel is an important component in the production of electric vehicles, which can be used as raw materials for long-term sustainable battery manufacturing to create a clean environment. Where nickel as the main raw material for the manufacture and operation of electric vehicles has contributed to reducing carbon emissions. Based on the Union of Concerned Scientist explains that battery production contributes of global warming emissions and decreases to 43% where this decrease depends on the chemicals used in the manufacture of battery raw materials. Making electric vehicle batteries is indirectly appropriate with the commitments of the Paris Agreement and the Sustainable Development Goals Agenda (SDGs) at point 13 to combat Climate Change in reducing carbon emissions to achieve a climate-neutral world. Therefore, each country is needed to cooperate and maximize diplomatic strategies between countries to fulfill the source of raw materials for the manufacture of electric vehicle batteries, especially nickel.

Countries are needed to maximize diplomacy activities to create an equal distribution of electric vehicle production

Therefore, the large production of electric vehicles shows that in the future each country will need a supply of raw material for the production of batteries, namely Nickel which is the main raw material for making batteries. electricity. This phenomenon shows that the largest nickel producing countries have an important role in achieving the contribution of raw materials for the manufacture of electric vehicle batteries. However, with the large production in each country that has an abundance of nickel, the country cannot stand alone. Instead, it is also necessary to distribute nickel production in other countries by sharing raw materials, which can be carried out using a diplomatic strategy.

Therefore, diplomatic activities between countries are very important to complete all the shortcomings possessed by each country. Each country can use its negotiation skills in achieving its national interests and the needs of each country. However, countries that have a large abundance of energy resources, especially nickel, which is the main raw material for the manufacture of electric vehicle batteries, should not continue to export excessively, but countries that have these energy sources must continue to limit the number of exports. Because nickel is an energy resource, the wealth of this energy resource must be maintained to prevent the depreciation of nickel reserves. Therefore, each country is required to carry out diplomacy, including strengthening the bargaining power of each country, negotiating to create an even distribution of nickel supply, complementing the needs that each country lacks in assembling electric vehicles, and Each country is required to form a sustainable plan as a long-term strategy to ensure that electric vehicles can continue to be produced in the future, especially nickel which is the main raw material in the manufacture of electric vehicle batteries.

*Ramadhan Dwi Saputra, Chemical Engineering Research Assistant at Universitas Islam Indonesia.

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Gas doom hanging over Ukraine

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The long history of gas transit across independent Ukraine began with Kiev’s initial failure to pay anything for Russian natural gas, both intended for transit to Europe and for domestic consumption, on the pretext of fraternal relations between the former Soviet republics. Later it cost the Ukrainians a meager $25 for 1,000 cubic meters of Russian gas, and that ridiculously small sum remained unchanged for quite some time. The sizeable amount of Russian gas provided at a discount price, plus domestically available oil resources, were distributed by the country’s greedy elite the following way: domestically produced gas was used on utilities, proceeds from the transit of Russian gas went to the state budget (minus the money that lined bureaucratic pockets), and Russian gas – to the industry (plus the corruption component).

Then came the Ukrainian revolutions and Kiev’s desire to join “Euro-Atlantic structures” and the desire to “get off the Russian gas needle and prevent the Kremlin from using energy as a weapon.” Ukraine has tried and is still trying to believe in all this by playing up to the collective West and hoping that the West will compensate Kiev for the losses caused by its revolutionary endeavors and anti-Russian antics. As a result, we see gas prices going through the roof, an energy crisis in Europe, and the completion of the Nord Stream 2 gas pipeline.

Those in power in Kiev hoped for the very last moment that the West valued their country more than it did the energy security of European countries. Much to their surprise (and only theirs), this is not so. It looks like the Europeans are interested in Russian gas supplies and are not so eager to keep Ukraine as the main transit country. Moreover, having “democratized Ukraine” to the state of an openly anti-Russian country, the West turned it into a country, whose leadership the Kremlin does not really want to talk to simply because it does not see any point in doing this. This is the reason why third countries care (or rather pretend to care) about Ukraine. Thus, in July of this year, there came out the “Joint Statement of the United States and Germany on Support for Ukraine, European Energy Security and Our Climate Goals.” According to it, Germany pledged to do everything in its power to make sure that the agreement between Moscow and Kiev on the transit of Russian gas across Ukrainian territory was extended for up to ten years. The statement came when it was already obvious that the construction of Nord Stream 2 would be completed, Germany resisted US pressure on this issue, Moscow paid no attention and Washington, exhausted by the battles of the presidential elections and the search for new strategies in the Old World, was trying to pit America’s European friends against Russia.

It has never been a secret that the West needs reliable transit, and this is something that Ukraine also insists on. However, Kiev has officially labelled  Russia as an “aggressor country,” which means that this very “aggressor” must ensure this transit and bring billions of dollars in revenues to the Ukrainian budget. This looks like a kind of “Euro-schizophrenia” where Ukraine is an anti-Russian country and simultaneously serves as a reliable transit country for Russian gas. Things do not work this way, however, and it looks like Europeans are beginning to realize this. Therefore, most of the European consumers support Nord Stream 2 even though they do not show this in public. Suffice it to mention the recent conclusion of a years-long contract for gas supplies to Hungary.

Vladimir Putin’s statement, made amid soaring gas prices and growing threats to European industry, came as an energy lifeline for all Europeans.

“Russian President Vladimir Putin supported the initiative of Deputy Prime Minister Alexander Novak to increase gas supply on the market amid rising energy prices in Europe… Novak said that Russia can stabilize the situation with prices by providing additional volumes of gas on the exchange, adding that this country’s main priority is to accommodate domestic demand,” Lenta.ru reported.

Commenting on the possibility of increasing gas supplies via Ukraine, President Putin recalled that Ukraine’s gas transport system had not been repaired “for decades” and that “something could burst” there any time if gas pressure goes up.

“At the same time, it is more profitable and safer for Gazprom to operate new pipeline systems,” he added. Putin thus confirmed what is already clear to all that Ukraine is an unreliable and, in fact, an extra link, and that Europe can get gas bypassing technically and politically unreliable Ukrainian pipes. He also pointed out that Gazprom would suffer losses from an increase in gas transit via Ukrainian territory, while new gas pipelines offer cheaper transit options. He added that Gazprom is saving about $3 billion a year by using new pipelines and that Russia was ready to increase gas supplies and make them cheaper for European consumers.

Gas shortages have already forced the Ukrainian government to freeze gas prices for household consumers, but prices for gas for industrial enterprises are rising along with those on European exchanges, where on October 6, they reached a very impressive $ 2,000 per thousand cubic meters and went down only after Putin’s statement came out.

Meanwhile, the head of Ukraine’s Federation of Glass Industry Employers, Dmitry Oleinik, said that this [rise in gas prices – D.B.] would lead to an inevitable rise in prices. However, producers will not be able to jack up prices indefinitely, because at some point buyers simply will not be able to cover production costs.

“The Ukrainian consumer will not even be able to cover the cost of production. Plants and factories will slowly shut down and people will lose their jobs – this is already very serious. Budget revenues will “plummet,” and expenses will skyrocket… The issue of bankruptcies is just a matter of time,” Oleinik warned.

If Ukraine continues to follow the chosen course, it will face de-industrialization. By the way, this will suit the West, but certainly not the Ukrainian industrial oligarchs, who have long been eyeing agriculture, including the prospect of turning themselves into land barons. However, the farming sector will not be happy about the high prices on gas that bakeries, sugar factories and greenhouses run on. There will be nowhere to run.

Apart from purely practical realities, the conclusions I can draw from the current energy situation in the world and Vladimir Putin’s statements regarding the Ukrainian transit, are as follows:

  • Gas supplies through Ukraine and to Ukraine are not solely an economic issue, given Kiev’s endless anti-Russian escapades;
  • This problem affects the energy security of Europe;
  • Since there are several angles to this problem, it must be solved in a comprehensive manner;
  • At the same time, this cannot be done exclusively in the interests of the West and Ukraine to the detriment of the interests of Russia.

As you can see, it is once again up to Kiev and its shadow patrons to decide. And winter is just around the corner…

From our partner International Affairs

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Russian Energy Week: Is the world ready to give up hydrocarbons?

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In an official message to mark the opening of the Russian Energy Week international forum on 13-15 October in Moscow, Russian President Vladimir Putin stressed that there are numerous issues on the agenda related to current trends in the global energy market, including improvements to industry infrastructure and the introduction of modern digital technologies into its operation.

“The efficiency of energy production and consumption is the most important factor in the growth of national economies and has a significant impact on people’s quality of life. Many countries have already adopted policies to accelerate the development of clean energy technologies,” he wrote in the message to guest and participants.

“The forum business programme is therefore set to look in detail at the possibility of developing green energy based on renewable sources and the transition to new, more environmentally friendly fuels. I am confident that the events of the Russian Energy Week will allow you to learn more about the achievements of the country’s fuel and energy sector, and that your initiatives will be put into practice,” Putin said.

Leaders of foreign states have also sent greetings to the participants and guests. For instance, President of the Republic of Angola João Manuel Gonçalves Lourenço, Prime Minister of Vietnam Pham Minh Chinh, Crown Prince of Abu Dhabi Armed Forces Mohamed bin Zayed bin Sultan Al Nahyan, and Vice Premier of the State Council of China Han Zheng.

In their greetings, it generally noted the importance of the topics to be discussed at the forum as well as the need to build an international dialogue and consolidate efforts to achieve the sustainable development goals, including as regards climate change.

The programme covers a wide range of issues of transformation and development in the global energy market. In the context of energy transition, the issues of energy development are inextricably linked with the introduction of new technologies, and the transformation aimed at reducing greenhouse gas emissions into the atmosphere. Climate protection is a task that cannot be solved by one country; it is a global goal, which can be achieved through building dialogue and cooperation between countries.

The participants in the discussion will answer the question: Is the world ready to give up hydrocarbons? In addition, during the panel session, the participants will discuss whether oil, gas and coal are really losing ground in the global energy sector; whether the infrastructure will have time to readjust for new energy sources; how long will there be enough hydrocarbons from the field projects that are being implemented; and whether an energy transition using fossil fuels is possible.

The international climate agenda is forcing many countries to reform their carbon-based energy systems. For Russia, which holds a leading position in the global hydrocarbon markets, the transition to development with low greenhouse gas emissions presents a serious challenge, but at the same time it opens up new opportunities for economic growth based on renewable energy, hydrogen technologies, advanced processing of raw materials and implementing green projects.

The Climate Agenda included sessions dedicated to the operation of the Russian fuel and energy sector in the context of energy transition, the impact of the European green pivot on the cooperation between Russia and Europe, as well as the session titled ‘The Future of Coal in a World Shaped by the Climate Agenda: The End, or a New Beginning?’

Sessions of the ‘New Scenarios for the Economy and the Market’ track are dedicated to the global challenges and opportunities of the electric power industry; the impact of ESG on the Russian fuel and energy sector; the potential for the renewable energy sources; and other issues of the future of energy.

The Russian Energy Agency under the Ministry of Energy brings together experts from key international analytical organizations to discuss the future of world energy during the session titled International Energy Organization Dialogue: Predicting the Development of Energy and Global Markets.

The Human Resource Potential of the Fuel and Energy Sector, participating experts will discuss the prospects for developing the professional qualification system, and a session titled Bringing the Woman’s Dimension to the Fuel and Energy Sector. Optimizing regulation in the energy sector and organizing the certification and exchange of carbon credits in Russia are the basis of the Regulatory Advances in Energy. 

Anton Kobyakov, Advisor to the Russian President and Executive Secretary of the Russian Energy Week 2021 Organizing Committee, said “the level of various formats of international participation testifies to the importance of the agenda and Russia’s significant role in the global energy sector. We are a reliable strategic partner that advocates for building international cooperation based on the principles of transparency and openness. With the period of major changes in the industry, it is particularly important to engage in a dialogue and work together to achieve both national and global goals.”

The forum, organized by the Roscongress Foundation, the Russian Ministry of Energy, and the Moscow Government, brought together many local and foreign energy and energy-related enterprises. The speakers attending included  Exxon Mobil Corporation Chairman of the Board of Directors and CEO Darren Woods, Daimler AG and Mercedes-Benz AG Chairman of the Board Ola Kallenius, BP CEO Bernard Looney, and TotalEnergies Chairman and CEO Patrick Pouyanné.

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