x Abu Dhabi, UAEWednesday 17 January 2018

Japan's nuclear woes add pressure to invest in green energy

Eco-Money: The disaster at the Japanese Fukushima nuclear plant is causing many nations to reconsider their long-range energy plans.

The recent reactor crisis in Japan has highlighted the problems inherent in power stations such as Fukushima I, forcing countries to reassess their future energy investment strategies.

According to Jan Beránek, a nuclear energy campaigner for Greenpeace, the world's governments have harsh lessons to learn about the dangers of using nuclear power to generate electricity.

"Now there is no doubt that a combination of human error and natural disaster can cause a meltdown," says Mr Beránek.

He adds that Japan's reactors are of a similar design to those that have previously caused concern in Sweden. In August 2006, three of Sweden's 10 nuclear reactors were shut down due to safety concerns following an incident at the Forsmark nuclear power plant, on the east coast of the country, in which two out of four emergency power generators failed, causing a power shortage. Nuclear reactors generate vast heat and require a constant flow of cooling water. Anything that disrupts the flow can create a meltdown if the reactors are not shut down in time.

The cores of three of the reactors at the Fukushima nuclear facility are in danger of meltdown. Should the temperature in the faulty reactors become high enough to melt the fuel, Japan could be looking at a disaster on the scale of Chernobyl in 1986, which is regarded as the worst nuclear accident in history. A nuclear reactor ruptured and let loose a huge plume of radioactive fallout over a wide geographical area, reaching as far as the UK.

The potential ecological and human disaster now taking place in Japan forces the world to calculate the true cost of nuclear energy. But even in financial terms alone, nuclear energy no longer offers a cheap alternative to other forms of power. Since the Chernobyl disaster, prices have fallen for sustainable energy.

Alternative sources such as onshore wind farms are now up to 35 per cent cheaper than nuclear power. This does not take into account the vast clean-up costs that would inevitably follow any kind of nuclear disaster. The price of nuclear energy is also set to grow as the world enforces increasingly strong controls and safeguards in the wake of Fukushima.

Alternative forms of energy, such as solar power and wind farms, can fuel much of the world's power needs without incurring the potential ecological costs associated with nuclear power. According to Greenpeace, sustainable energy now offers increasingly lucrative opportunities for shrewd investors.

"Investors need to follow a different path than when investing in nuclear energy," says Sven Teske, a spokesman for Greenpeace. "Investors fund specific projects rather than buying shares in large corporations."

While it is possible to invest in companies such as Siemens, which have a foot in both nuclear power and alternative energy, green investors can easily help fund entirely green initiatives. According to Greenpeace, even though alternative sources may be far cheaper than building nuclear reactors, they are still relatively capital intensive in the short term. Even quite a low-cost energy facility, such as an onshore wind farm, can cost more than €50 million (Dh260.4m) to build. Facilities such as offshore wind farms can cost many times more.

The solution is for project developers to front 20 per cent to 30 per cent of the construction costs, with the banks lending the remainder. Even conservative predictions from bodies such as Greenpeace estimate that alternative energy projects should offer a 7 per cent annual return over a 10-year period for private investors.

Solar Millennium is an example of the kind of company specialising in sustainable energy development. Examples include a solar thermal power plant in Morocco, where Solar Millennium's consortium partners include the Egyptian company Orascom Construction Industries. Solar Millennium is also active in Egypt. In Kuraymat, roughly 100 kilometres south of Cairo, a major solar-thermal power plant is going into operation for the first time in Egypt. It is part of a hybrid power plant that will use both solar power and natural gas. The solar technology for the project is provided by Flagsol, a subsidiary of Solar Millennium.

According to Nadine Dannowski, a spokeswoman for Solar Millennium, the political upheavals in Egypt do not adversely affect the development. Of course, the energy sector as a whole is not new to doing business in troubled regions.

"We have no concrete problems locally and we are continuing with the project," says Ms Dannowski.

There is increasing pressure in the energy sector to shift from nuclear power to safe alternative and sustainable forms of energy generating by facilities such as solar and wind farms.

The latest countries to question their nuclear energy programme include Spain. Jose Luis Rodriguez Zapatero, the prime minister of Spain, has ordered a review of his country's nuclear power plants thanks to the crisis unfolding in Japan.

Many countries are also beginning to reassess their energy policies in light of increasing reluctance on the part of the electorates to support future nuclear-energy programmes.