Luis Echavarri - The Switch Interview

- Energy is at the root of economical and social development. You can not develop economically and socially if you do not have enough energy. So I think this applies around the world and co-operation between countries is fundamental. The decision on whether to nuclear is up to the governments. But for the governments which have decided to do it it is very important international co-operation to do it the best possible way. So what we try to do is to give them a very good indication, recommendations, guides on how to give nuclear power from the safety point of view, from the environmentally friendly point of view, and from an economical point of view. What we try to do is to have the best specialists from the OECD countries, discussing together, from different countries, what are the best practices that you can do, to do the things well. - So the U.S. started the nuclear energy in the 70's and then it just sort of stalled. What are your perspectives on what happened there in the U.S.? - Well, I think that in the U.S. several things happened at the same time. One thing is that of course Three Mile Island had a tremendous impact in the industry, because they realized that, you know, safety was an important issue and that, you know, you could have an important accident. Three mile island didn't have any impact outside of the station, so there was not any danger for the population, but from the economical point of view it was a disaster. So this is a warning to the industry. On the other hand, we were living, at that time in years in which the oil was very, very cheap. And really the incentive for investing in nuclear power was not economical. So I think, from the, taking those two factors into account, it is clear that, you know, the utilities in the U.S. thought that there could be other alternatives to the produce of electricity rather than nuclear. But they still, in the United States, continued operating the reactor that they had built and in fact is the biggest fleet in the world. They have 104 reactors in operation and that's a very important part of the world energy. So I say that there was not new investment but the industry tried to get a lot of experience in operating the reactors and they were very successful because the performance of those reactors has been improving significantly since then. The capacity factors in the number of hour you operating in the year were growing very significantly. 30 years ago, they were about 65 percent, now they are about 90 percent. - 90 percent? - 90 percent. - You estimate they use that all for base load. - For base load and it's very reliable and I think from the economical point of view once you have paid the amortization of the initial investment, they're really, they are really cheap. The percentage of electricity from nuclear in France is around 78 percent. This is the highest for a big country in the world and represents, and this is a very important thing, as much energy as all the oil in Kuwait. - What are the key things that have let France be successful in nuclear energy? - Well I think that France has been a country in which nuclear has not been in the middle of the debate between the left and the right. Practically, all of them in parliament, in the political parties were considering that nuclear was very important for le grand France, le grandeur. And the goal was able to articulate that very well and this is very deep in the political establishments of France. - So great education. - Great education and an approach to consider that nuclear is science and technology, is in our hands, we know that, why we are going to renounce to that? Why are we going to import oil or gas from, you know, other countries, when we have scientists and technologies which can provide us as much energy as Kuwait gives to the world. And, this is very deep in the political establishment. Basically, the French society has always considered that they were benefited a lot from nuclear power. France also has a big tradition of powering companies that are very efficient. So really they were really able to articulate a system which has been efficient. They decided to standardize nuclear power plants with the same technology and this has proven to be extremely important to have a very efficient system. And I think the success in France is that through standardization they were coming with a model that represents a very very rational approach to build nuclear power plants. Because, nuclear power plants are very sensitive to the change of design, different teams making the construction know that. The success of France has been to standardize all that. So I think that in the case to come, the main connotation about France is going to be the export industry, how they are going to help other countries with nuclear. One important element of nuclear, is that nuclear is science and technology. The role of the uranium in the production of kilowatt hours from nuclear is very, very small. In fact, in the cost of a kilowatt hour, it's only five percent. - Huh. - The other 95 percent is science and technology. And this is very important because it helps in developing a high level society. And also, it's very important for the OECD countries because these countries have that technology. So with a little bit of uranium you can produce a lot of energy, so I think this is a very important consideration of nuclear. - Yeah. - Second, nuclear contributes significantly to the security of supply, because almost 40 percent of the resources of the world are in OECD countries. The main resources in the world are in two OECD countries, Canada and Australia, and Kazakhstan is a third one, but then United States comes. So this means that you put these three countries together, Canada, Australia and United States, which are very reliable from the market economy, they are members of the OECD, give a lot of confidence, so this means that from the security of supply point of view, nuclear, I mean uranium for nuclear power is very different from oil or gas, and contributes in a significant manner to the security. And a third element, which is becoming very, very important in the last year is climate change. Climate change is a big concern and nuclear power does not produce CO2. Well there are some people that say, yes this is true in operation, but what about mining, enrichment, conversion and all that? Well, we have made an analysis of the whole fuel cycle of nuclear power, from cradle to grave, and the emissions of CO2 are nothing in comparison with coal or natural gas. In fact, out of the same order of magnitude than with power. - [Scott] Is it affordable, what's the cost per kilowatt hour? - I think at this moment you could think about 60, 65, 70, euros per gigawatt hour. - Okay, per gigawatt hour. - Per gigawatt hour. - [Scott] Okay, so maybe five or six euro cents per kilowatt hour. - Per kilowatt hour. - [Scott] That's, that's very affordable. - It's very affordable, but, nuclear is intensive in capital, so you have to put most of the money at the very beginning. About 60 to 65 percent of the cost of the kilowatt hour from nuclear is the initial investment in the facility and that has to be put at the beginning. When we make an analysis to compare the cost of the kilowatt hour from the different sources, we are talking about periods of 40 years. In 40 years nuclear competes very well. But, the amortization takes 25, 30 years, while the amortization of natural gas could be done in seven years. - Right. - So, nuclear is very attractive economically when you have a good financial situation and you are going to be in the market for 40 or 50 years. Then it is very cheap, but for small companies or for countries that have not access to a good financial resource, sources, for countries which don't have infrastructure, they don't have qualified people and all that, nuclear is difficult. - So why is it so expensive to build a nuclear power plant? - Well, because, the equipment you need, both for the process itself and from the safety point of view, really are very complex, and that's very important. To give you an example, an important part of the