Nuclear No Nos

Nuclear Power is not the answer. Two stories explain why.

First, there is the waste. We simply do not know how to deal with it, how expensive that will be, or even if we will ultimately be successful. This story in the Guardian provides some more context: I was interested to learn that the most hazardous industrial building in western Europe is at Sellafield, an English nuclear power plant. The second most hazardous one is there too. The estimate for the cost of cleaning this up is £50B - and we all know how accurate estimates like that tend to be (or those of us who are paying for the London Olympics in our taxes do anyway). I very much doubt Sellafield generated fifty billion worth of electricity in its whole life.

Second, there is the lag. The UK will need lots more energy generation by around 2015. That's when the crunch comes. Even if nuclear is a good idea - which it clearly isn't - it can't be ready in time. Notice that if we have an election in 2010, 2015 might be only one parliament away. That should focus minds a little...

Run rat run

Labour MPs are, of course, far more concerned for themselves than either the governance of the country or their party. Here's just some of the utter nonsense, the self-serving anti democratic idiocy they and their leaders have been up to recently.

• Spending £3bn on new nuclear warheads despite not providing British troops in a war zone with the right body armour and posturing about Iran's nuclear ambitions.
  
• Umming and ahing over vehicle excise duty despite it being clearly sensible to charge more for the most polluting vehicles. And while we are on carbon issues, why doesn't aircraft fuel attact any duty at all?
  
• Utterly failing to reform the tax system to make it fairer and to prevent the rampant abuses of both corporates and wealthy individuals.
  
• Continuing to pursue the disaster that is PFI despite overwhelming evidence that there is little risk transfer to the private sector and excessive cost. Follow the New Zealand example instead and renationalise.
  
• Creating massive uncertain long dated liabilities by allowing new nuclear power stations to be built. Oh, and letting the company concerned, with a guarantee on clean up costs of course, be sold to the French.
  
• Failing to stop the free markets are the best thing ever for everything brigade from further ruining our public services. Damn it I'm a derivatives specialist and I'm far less keen on the power of the markets than Alan Milburn is. Maybe that's because I actually know something about them. And as for Hazel 'sum of all fears' Blears - heaven defend us against her kind of 'reform'.
  
• Not dealing with the utter mess that is MP's expenses. Stop spending my money on Lembit Opik. Or a ridiculously grandiose and over budget Olympics.
  
• Enacted the biggest snooping law in British history.
  

Now, I admit it, I cheered for Tony in 1997. I drank a lot of wine and ate pasta and stayed up until Portillo was gone. But now, please, can I have a Labour party back that is actually socialist, or at least has some vague aspirations other than leaving the rich alone, lining their own pockets, and trying to find some tiny chink of public life that has not yet been infected by Thatcherite free market dogma.

Uncertainty and strategy

A key issue in strategy is uncertainty in the outcome. Unlike financial return distributions, where we at least have some data to go on, and some models (albeit ones which struggle with autocorrelation, fat tails, and regime changes) there isn't much data on corporate strategy because each situation is different. I can't try the same acquisition a hundred times over to get a sense of the distribution of returns or, as Keynes said:

Our knowledge of the factors which govern the yield of an investment some years hence is usually very slight and often negligible

Usually people don't let that worry them too much not least because the downside is bounded at zero: often you cannot lose more than you put in. But there is one area where is glaringly obvious that a consideration of uncertainty is important because the returns are so volatile and possibly highly negative - nuclear power. Today we heard, entirely predictably, that:

[The] cost of cleaning up the UK's ageing nuclear facilities, including some described as "dangerous", looks set to rise above £73bn

In fact we have no reason to believe that nuclear fission has net positive value. The costs of building it, running it and cleaning it up may well exceed, perhaps by an order of magnitude, the value of the power generated. As France's nuclear safety watchdog has ordered EDF to halt work temporarily at its flagship new generation nuclear power station and half a million people were hit by unscheduled power cuts after seven power stations, including Sizewell B in Suffolk, unexpectedly stopped working within hours of each other perhaps the policy makers might like to reconsider their push for a new generation of nuclear power stations.

Update. WTF? Gordon Brown has said the UK needs to increase its nuclear power capacity - raising the prospect of plants being built in new locations. As Sting didn't write, every little thing he does is hurried, ill-advised, and foolish.

What works replaced by what we believe

The following quote comes from a post on the Guardian website:

What I find most striking about this, as about other items in this government's moralistic agenda, is how opposing arguments simply are not heard. It isn't just closed mindedness, the government and its supporters are in the grip of a kind of exclusivist belief system akin to a fundamentalist religion. Arguments based on individual choice, or the notion of adults making rational decisions, simply "do not compute"; they are here to protect us, like spoilt children, from the bad world out there, and they have our interests at heart, and if you don't agree then clearly you favour exploitation and slavery and oppression.

The two things that strike me about this quote are firstly how accurate it is, and secondly how many things it might be referring to: Europe; Iraq; PFI; Pensions; Trident; Nuclear Power; 42 day detention; the DNA database; ID cards. Pretty much any part of politics that is in any way controversial in fact. Even if you agree with a particular policy, the monological belief system which nourished it is deeply troubling. No government which scorns alternative views and abuses legislative privilege with deeply partisan, ill-thought out and costly nonsense as Brown's does deserves to survive, let alone win re-election.

Japanese jitters

Nuclear safety fears after quake according to the BBC. Certainly building a nuclear reactor is an earthquake zone might strike a naive observer as reckless. But then anything that depends on safe confinement for hundreds of thousands of years is reckless. The nuclear industry appears to have a decent safety record over tens of years. Who really thinks they can stretch it to building something that is good for ten thousand times that long? What would it mean to try to prove you could do that? Until there is a compelling answer to that question, I am nervous about increasing our reliance on fission power.

(The building site is in Ottawa.)

Going nuclear

Tony and Gordon have bottled energy conservation and renewables, and instead see a new generation of nuclear power stations as key to meeting our energy needs. As we already knew over a year ago they would. Just one question. Can we afford them?



After all, despite the expert's protests, we know that nuclear power stations over their life subtract value from the economy: they cost more to build, run and (crucially) decommission than the power they generate is worth. This might change, of course, but buying an out of the money option is a gamble on the underlying going up, and the government doesn't have a hedge.

What I really worry about, though, is the ongoing costs and risks of dealing with the waste. U235 has a half life of 700 000 000 years. For U238 it's 4 billion years, or roughly the age of the earth. The most permanent structure man has made has lasted less than 10,000 years, yet we are taking on liabilities 700,000 times longer. We are going to produce tonnes, perhaps hundreds of tonnes, of material so toxic that ingesting a microgram is likely to be fatal, and it will remain dangerous for billions of years. Put that way is there anyone who honestly believes it's a sensible idea?

Update. The house of Lords clearly have concerns too.

What particularly troubles me about all of this is that fusion research has slowly been making progress and with more funding, goodness knows how quickly we could get there. In the context of the sums at risk from climate change, a few tens of billions on fusion research would be infinitesimal. Yet this is an order of magnitude less than we are spending. That seems like a bad strategy to me.

You still know best Tony

The energy review, to no one's surprise, has concluded that nuclear power is now economic. How could one possibly know? In order to make that determination, you need to know how much it costs to decommission a nuclear power station and store the waste. The former is tricky: you are estimating the cost of a complicated piece of engineering thirty or more years in the future (and we all know how costs tend to escalate with big engineering projects). But the latter? We aren't talking 30 years. We are talking a million, or at least until we figure out how to make nuclear waste less radioactive. How on earth do you estimate secure storage costs for that long? And if you can't, is it not reasonable to conclude that there is no way one can decide whether nuclear power is economic or not?