I’ve been glued to the TV over the weekend, watching the footage of the Japanese crisis. As the weekend went on, the focus of the news switched from the tragic events of the earthquake to the struggles to cool the cores of the nuclear power plants in danger. Reports have put as many as 5 plants at risk of some sort of meltdown, with all sorts of differing reports on the severity of the situation.
Stocks around the world related to nuclear power have reacted sharply. Canadian uranium miners are down 20% since the nuclear crisis became evident. Japanese nuclear power plant operators are down 40% this week, with industrial companies that supply nuclear plants down almost as much, over 30% in some cases. Even American industrial giant GE has seen a 5% sell off due to the market’s nervousness about nuclear energy.
Meanwhile over in Europe, leaders are reacting to a crisis half a world away. Germany is closing down old nuclear plants. Belgium is starting to rethink building new plants. France is calling for safety inspections to be stepped up. The crisis has made Europe nervous, since so much of their power is generated by nuclear plants.
As I watch this all unfold, I’m wondering if the market is once again overreacting.
Where’s Power Going To Come From?
How is a country like Japan supposed to generate enough power to satisfy their energy needs without nuclear plants?
They have no potential for hydroelectric power, no natural resources to burn for energy, and solar/wind power is still largely ineffective. They’re an island nation, so importing power isn’t possible. Japan imports just about all of it’s energy needs. How is Japan going to keep the lights on without nuclear power?
Hold on, Homer Simpson would like to clear something up:
For the most part, nuclear energy is cleaner than burning coal or natural gas to generate power.
There is an issue with nuclear waste, but that’s the only by-product. Since plants heat water to generate electricity, the main waste material is that water. Water is also used to cool the reactor.
It’s not as clean as hydroelectric power, solar or wind energy, but those power sources have their own problems.
Solar And Wind Energy Suck
Solar and wind power have gotten all sorts of hype over the past few years. Ultimately though, very little of our power supply come from those sources.
Also, many wind farms built in parts of the world wouldn’t be possible without the massive tax breaks this type of energy gets.
We are still a long way away from getting a significant portion of our power from the sun or wind. We should still keep trying to harness these sources of energy, but we still need energy in the meantime.
Hydroelectric power is great for a country like Canada with all sorts of rivers we can use to generate power. Many other countries though (like Japan) have no hope of generating a kilowatt by using hydroelectric dams. Hydroelectric power is dependent on the geography of a country.
Power plants are complex investments, with each type having its own list of pros and cons.
Ultimately though, clean energy is too far away to enter the conversation as a legitimate option for our power needs. As the world’s energy needs continue to increase, plants will have to be built to accommodate that need. I don’t know how humankind is possibly going to meet that demand without increasing our reliance on nuclear power.
Long term I’m bullish on nuclear power. Short term, I’ll be watching the situation in Japan with great interest. Hopefully they’re able to solve these power plant problems. If anyone can do it, it’s the Japanese.