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Nuclear Energy: Economic benefits & environmental controversy

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Added 25th January 2017 06:17 PM

The Vision 2040 envisions the utilisation of part of Uganda’s uranium reserves to generate electricity from nuclear energy

Nuclear Energy: Economic benefits & environmental controversy

The Vision 2040 envisions the utilisation of part of Uganda’s uranium reserves to generate electricity from nuclear energy

By Lindah Nalubanga

According to the U.S Energy Information Administration, the global energy consumption is expected to grow by 56% for the period 2010 to 2040 partly due to the gradual population increase. As a result, countries have considered utilising energy resources that require production at least cost while protecting the environment.

Nuclear energy is among the type of energy countries have considered including in their electricity generation mix despite its controversy. This is so due to its reliability as a low carbon emission type of energy especially in electricity production as well as a key form of energy security.

Uganda is no different from other countries; the Vision 2040 envisions the utilisation of part of Uganda's uranium reserves to generate electricity from nuclear energy. This seems timely given the forecasted demand of 40.000 megawatts to meet the goals under this vision. In that regard, the ministry responsible has gone ahead to train its staff in different aspects of nuclear energy. Recently, the government requested Russia to give a hand in its nuclear power developments.

Whereas the above indicate a progress in the sector, the economic and environmental benefits and concerns surrounding the nuclear energy including their legal aspects have to be critically analysed.

From the economic perspective, factors to be considered include; costs, local content and energy source diversity. The only accurate measure of economic competitiveness is the cost of electricity produced by a particular project compared to alternative sources of electricity and to the market price of electricity when the power plant starts commercial operation. The costs take into account not only capital investment and financing costs but also the operating and maintenance costs and performance of a project. In the regard, nuclear facilities are capital intensive however the capital costs are only incurred at the starting point for any analysis of new generating capacity.

Also, the nuclear industry contributes greatly in the creation of jobs (especially in areas of engineering, environment and commercial aspects) and economic growth, given that it provides both near-term and lasting employment and economic benefits. This is further manifested in the provision of goods such as materials and services like plant maintenance; and also indirectly through induced spending attributable to the presence of the plant and its employees as plant expenditures filter through the local economy.

On the other hand, Nuclear energy can significantly contribute in resolving other energy supply concerns such as the increased prices of fossil fuels; reliability of supply sources especially in politically unstable regions. The prices of uranium are stable as compared to fossil fuels. At the same time the uranium sources are reliable all over the world and uranium is only a small percentage of the total cost of nuclear electricity. This makes it a good energy source of diversity to include in a country's energy/electricity mix and therefore the electricity generated from nuclear energy can be competitive with other new sources of power as analysed by energy companies, academicians, government agencies, and others.

Further, from the environmental perspective nuclear energy is a clean source of energy as compared to coal and oil sources. It has been classified among the sources including renewable sources, hydro-sources that could help in climate change energy related challenges due to their low CO2 emission levels. The International Atomic Energy Agency (IEA) assessed nuclear power in electricity generation, as having the largest potential (1.88Gt CO2-equivalent (CO2 -eq) to mitigate GHG emissions at the lowest cost. Japan is among the countries that have always used Nuclear energy to determine their climate change commitments to the United Nations.

Whereas, nuclear energy possesses its unique advantages, just like other sources of energy, the biggest controversy lie in its safety and waste management. The 1986Ukraine Chernobyl reactor explosion incidence and the 2011 Fukushima Nuclear disaster have been placed as one of the worst accidents in the industry probably compared to the World War II episode. The latest accident i.e. the Fukushima accident was too severe that its impacts are still being felt up to date in Japan. Moreover the true cost of the incident has not been concluded up to date.

Unique to these disasters/accidents is that they are too extensive and catastrophic. They are normally trans-boundary involving other regions or even other countries as the case of Japan and Ukraine. Environmental issues such as marine and ground water contamination, radioactive discharges have been evident. Yet cleaning up may cost up to 180 billion US dollars as the anticipated case in Japan excluding decommissioning of the affected sites that is estimated to take 30 to 40 years. 

In terms of compensation, there are two international regimes normally referred to as the primary treaties; i.e.  the 1960 Paris Convention of Third Party Liability in the field of Nuclear Energy and 1963 Vienna Convention on Civil Liability for Nuclear Damage and they came under revision following the Chernobyl accident. Common in these treaties is that they have the same principles which include: "strict liability of the operator; channelization of liability to the operator and the Operator's limitation of liability in time.

However, not even the company in charge of the plant/s and their respective insurance company may be in position to handle all the costs but rather the need for government intervention or even other countries'. To be precise, the polluter Pays Principle (PPP) an economic concept that has been applied in environmental law, may not be practical in nuclear accidents as seen in the Fukushima and Chernobyl.

Also, waste management should be considered since waste is accumulated at each stage right from mining to electricity generation. For instance during uranium mining and milling, fine sandy tailings which are not classified as radioactive are generated and normally collected in engineered tailing dams. During conversion, enrichment and fuel fabrication the by-products can be converted and used as reactor fuel. The high -level waste in terms of radioactivity is generated during electricity generation due to the use of nuclear reactors. Used fuel is generated and if not reprocessed is considered a waste.

The implication is that government needs to put in place policies /laws that will favour maximum economic benefits from the envisioned nuclear projects. These should include nuclear quality accreditation and regulatory standards to allow for increased capacity of local industries.

Also the Ministry of Energy and Mineral Development needs to coordinate with the Ministry/Agency responsible for the environment and the Ministry in charge of occupational health and safety to come up/revise their legislation to incorporate nuclear issues such as safe transportation, disposal and storage of radioactive material. Besides, precautions have to be made while choosing sites to install the plants in order to avoid seismic vulnerable areas that are prone to natural disasters.

In addition, during the allocation of licences for management and ownership of plants, government should safeguard against a monopoly. The advantage of licensing different firms is the ability to do intra-industry risk pooling in case of any incident as it's done in the USA.

Further, the Government should partner with investors who are parties and have ratified to the nuclear safety related agreements/treaties.

Also, for the national nuclear plant development programme to be successful, it is essential for the nuclear safety body to be independent from government.

The Government has to clearly reflect if it should go ahead and invest in nuclear energy or instead invest more in other energy sources specifically renewables where it has greater competitive advantage.

Finally, the government should extensively do a cost -benefit analysis reflecting on the current energy policy to rule if nuclear energy should be included in its energy mix or if it should continue to invest in renewables where it seem to have a greater advantage.

Writer is an energy and environmental economist

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