The Japanese Nuclear Accident caused in the aftermath of the 9.0 Richter Scale Earthquake has major implications for the Green Energy Sector.Solar Energy in particular should get a massive boost from this accident.While analysts and commentators were fixated on short term effects of the Disaster on Solar Energy Supply and Demand,they entirely missed the longer term effects.Investment Bank Analysts as usual were concerned more with the next quarter and came out up with their vague implications like a polysilicon shortage,no money for providing solar subsidies in Japan in the next year etc.A case of missing the forest for the trees.
This Nuclear Energy Disaster in the Age of Twitter and Facebook will vehemently increase the opposition to the setting up of big Nuclear Plants.The Radiation Leak and subsequent health hazards will make it impossible for a Nuclear Reactor to be located except in very remote areas like the Sahara Desert.NIMBY protests are going to almost kill the Nuclear Industry in the next decade at least in democracies.The Nuclear Industry will take a long time in establishing its trust amongst the citizens.Without Nuclear Energy,the other major forms of Renewable Energy ,Solar and Wind Energy have to gain.Already Switzerland and Germany are deferring the planning and extension of Nuclear Energy.Other countries are putting safety reviews.Note the costs of environment regulation and nuclear waste disposal are already quite high.This will make new nuclear plants uneconomical as they are already facing huge cost overruns . Look at Areva in Finland and Constellation in the US.
Constellation Energy has become the latest USA Utility to cancel its proposed new nuclear energy plant to be built in Maryland.Despite a Loan Guarantee from Department of Energy (DOE) as part of the US Green Stimulus,Constellation has found the economics of the Nuclear Reactors as unworkable.In fact this is keeping with the trend of other utilities in the Developed World who have found New Nuclear to be too expensive.While a number of cyclical factors are at play (Wind Energy has also been affected) in hindering the development of these plants,it seems a secular shift has occured.Finland has become the poster boy of a Nuclear Project Disaster with the main developer Areva bleeding from losses as time and cost overruns have almost doubled.The increaseing costs of environment and safety regulations has increase manifold since the last spurt of nuclear energy construction in the 1980s.The Nuclear Renaissance has proven to be a complete failure in the Western Countries.While China continues with its aggressive Nuclear Expansion plans,construction in the US has come to a virtual halt.Exelon which is the largest Nuclear Energy Operator in the USA has also halted developed of 2 new reactors in Texas.
Solar Energy costs are declining rapdily plus it has the advantage of being distributed in nature.This results in lower risk from a plant disruption and solar panels can be installed quickly.There are no catastrophic risks unlike in other forms of Energy like Oil (BP Oil SPill),Thermal ( Coal Mine Deaths),Gas ( Water Pollution) etc.Solar Energy is going to see ups and downs due to its current dependence on government subsidies,however grid parity has already been reached in Italy and Hawai.Expect Solar Energy Growth to accelerate in the coming years on the back of this Nuclear Disaster.
Axiom Capital analyst Gordon Johnson contends that buying solar stocks based on the developments in Japan is “ill-advised,” and that the related rally “creates a shorting opportunity.”
“When considering nuclear power is a distributed power source (meaning you can use it all day), while solar is an intermittent power source (meaning you can only use it when the sun is out – not when the sun is down, or when there is significant cloud cover), some assumptions being made in the market today that solar power will replace nuclear power, we believe, are simply misplaced (this is simply not possible, without the help from some natural gas peaking, coal fired power plant, etc., source),” he writes in a research note. “One of the other concerns we’ve heard today by some of our readers centers on whether this will impact the current discussions in Italy surrounding solar [subsidy] cuts and 2011 caps. In short, when considering there are currently no nuclear reactors in Italy, we firmly believe the answer to whether this will impact the current policy discussion in Italy is no as there is no nuclear power in Italy at present (Italy decommissioned its last nuclear plant in 1989).”
With respect to Germany, he notes that while Chancellor Merkel has decided to temporarily suspend a decision to extend the lifeline of the country’s 17 nuclear power plants from 2022 to 2034, “the immediate impact on solar regarding this decision is immaterial.”
France, he notes, gets nearly 75% of its energy from nuclear power – and the situation did not change after the 1987 Chernobyl nuclear disaster.