If the triple catastrophe in Japan has any silver lining, it’s the boost to non-nuclear renewables such as wind and solar energy. Japan faces immediate power shortages in the wake of the earthquake, tsunami, and nuclear meltdown, and as Geoffrey Styles observes:
As of the end of 2009 Japan already had the world’s third-largest installed solar power capacity at 2,600 MW, to which another 1,000 MW or so was apparently added last year. For Japanese businesses suffering from rolling brownouts, solar power is one of their few options other than diesel generators for becoming more self-sufficient fairly quickly.
The Japanese nuclear disaster is already having global repercussions, as other countries review their nuclear energy strategies. “The industry could enter another two-decade global freeze like the one that followed the Chernobyl disaster in 1986”, according to the Financial Times. In the US, concerns about safety could rekindle the anti-nuclear movement and slow down development of new projects. The Swiss reacted first, suspending approvals for three new reactors. The German government announced a nuclear moratorium and that it is indefinitely shutting the oldest seven of the country’s seventeen plants. China announced that it was suspending new approvals for nuclear reactors, though Russia and France have declared their continued commitment to nuclear technology.
It’s possible that memories will fade and the world will get back to business as normal, putting the nuclear revival back on track. But the severity of this crisis in an industrialized country with an advanced nuclear industry and strong safety culture suggests that there could be a long term impact. Charles Perrow, Professor Emeritus of Sociology at Yale University, and author of the classic book Normal Accidents about Three Mile Island (and guest blogger on Climate Inc.), has argued that even with the best safeguards, occasional accidents are inevitable, or “normal”, given the extreme complexity of some technological systems combined with human fallibility, pressures for profits, lax governmental oversight, bureaucratic inertia and organizational hierarchy. For nuclear reactors, the outcome can be catastrophic. The prospect of even one Fukushima-style meltdown every few decades, or the cost of even more elaborate safety features, is likely to severely curtail new nuclear investment.
In the short term, closing nuclear capacity will raise CO2 emissions as utilities restart gas, coal, and even oil and diesel fired generation capacity. These old mothballed plants tend to be inefficient and expensive, however, and capacity is limited. The need for a short-term fix will also increase demand for fossil fuels, raising prices and further spurring interest in renewables and efficiency. Not everyone is sanguine about the impact on renewable energy, however. John Peterson, writing for AltEnergyStocks.com, notes that:
The nuclear reactors that have recently gone off-line in Japan and Germany accounted for roughly 125 TWh of electricity production last year. In comparison, global electricity production from wind and solar power in 2009 was 269 TWh and 21 TWh, respectively. In other words, we just lost base-load power that represents 43% of the world’s renewable electricity output. The gap cannot possibly be filled by new wind and solar power facilities.
While it’s true that wind and solar are still in their infancy and cannot completely fill the gap, they can be deployed far more quickly than conventional power plants due to their flexible scale. Of course, there are constraints on total production capacity, and large scale installations can be delayed by siting and permitting issues, but the prospects for renewables are suddenly a lot brighter, after a year in which the momentum toward carbon regulation and pricing appeared to have stalled and the clean energy train was in danger of being derailed.
The reaction in the markets to events last week supports this view. While nuclear stocks and ETFs plummeted, clean energy investments reacted positively even as the overall market declined. The chart below shows the jump in price (blue line) of PBD, a global clean energy ETF from PowerShares since the disaster hit Japan March 11.
It’s interesting to note that PBW, an ETF with greater focus on US-based firms and less exposure to a broader array of cleantech technologies such as energy storage and controls, has not performed nearly as well. This is perhaps unsurprising in light of the challenges faced by the US clean energy sector, particularly solar energy. In January, Evergreen Solar, Inc. announced that it would be shutting its doors on its Devens, Massachusetts plant despite receiving $58 million in grants and tax incentives to open the facility, according to the Boston Globe. Now, the company is shifting production to a facility in China by the end of the first quarter of 2011. If the disaster in Japan has a silver lining for the clean energy sector, it’s important that the US not let the opportunity slip away.