As concern mounts over climate change and the future of fossil fuels, nuclear power has returned to the forefront of energy policies worldwide. In the United States, where no new nuclear plant has been built since the Three Mile Island accident in 1979, atomic energy occupies a prominent place in legislation introduced recently in Congress. India hopes nuclear will supply 25% of its electricity by 2050. China, meanwhile, is racing ahead: It has 11 operating commercial reactors, 20 more under construction and several others about to be built. Across the Middle East and North Africa, at least 13 nations are actively pursuing or seriously considering nuclear power: Iran, the United Arab Emirates, Saudi Arabia, Yemen, Israel, Syria, Jordan, Egypt, Turkey, Tunisia, Libya, Algeria and Morocco. Cost, safety and proliferation continue to be significant issues, however.
Does a global revival of nuclear energy make sense? According to Lady Barbara Judge, chairman of the U.K. Atomic Energy Authority, it does for three reasons: energy security, energy independence and climate change. Judge, who was recently among a panel of experts at The Festival of Thinkers in Abu Dhabi, is on a mission to raise awareness of nuclear energy around the world, including the Middle East. Arabic Knowledge@Wharton spoke with her about what needs to happen for nuclear energy to really take off, and about how her own foray into the industry began.
An edited transcript of the conversation follows.
Arabic Knowledge@Wharton: It is fantastic that you have taken time out to speak to us about what is going on in the nuclear energy industry and what we need to be thinking about globally to move the industry forward. So first question is about what is happening in the industry today. Is there really a nuclear renaissance? Is it really in vogue, as a lot of people are saying?
Lady Barbara Judge: Absolutely. [That’s because] today, we face three problems with respect to energy. One is energy security. Do we have enough energy? One is energy independence. Where does the energy come from? And third is climate change. Are we going to leave a world for our grandchildren fit to live in? What do you have to do in order to do that?
You have to look at the kinds of energy available to deal with all those issues – energy security, energy independence and climate change. Nuclear is the one kind of energy that deals with everything. Nuclear energy does not emit carbon, and once you have the nuclear energy plant in your country – yes, it’s expensive, but you have it – you have energy security and you have energy independence. It’s in your country. It is not rocket science. We know that we have to look at all the kinds of energy that are available and nuclear is the first one.
And the evidence of the renaissance is the United States, [which] is giving guarantees for four to six new plants. The U.K. is starting a new regime to encourage nuclear energy. France has been doing nuclear for years – 59 nuclear power plants deliver 80% of its energy. Turkey, Abu Dhabi, Jordan, Russia, China, India, Egypt – I could go on and on listing all the countries that are thinking about starting, and are in different phases of, their own nuclear renaissance.
Arabic Knowledge@Wharton: How does nuclear energy fit in with renewable energy? Is it going to be the predominant energy source? Or will it sit alongside solar, wind and the other renewable energy sources that get a lot of press today?
Judge: I agree that renewable energy gets a lot of press. From my point of view, although they are very worthy and we ought to keep dealing and investing in renewables, they are not going to solve the problem. At the very best, people tell me it is going to [account for] 10% of the energy we use. And you have to remember the sun doesn’t always shine and the wind doesn’t always blow. Even in the U.K., in places such as Scotland, where there is lots of wind, sometimes you are going to have a cold, dark, still night. And when you flip on the light switch, the lights won’t go on. The thing about renewable energy is it is top-up energy. It only works when the source of energy works.
Nuclear energy is base-load energy [for day-to-day consumption]. Once you build the plant, the energy goes and goes and goes. So when you turn on the light, whether the wind is blowing or the sun is shining, it’s on. And the base-load nature of nuclear is what really gives it a place at the table in today’s energy dilemma.
Arabic Knowledge@Wharton: As we have seen in the past, nuclear has been a very emotional topic at various levels for many types of people. What have been the challenges of getting nuclear accepted or to get the industry going?
Judge: Originally – and that’s about 50 or 60 years ago – in England, as well as in the United States, we started producing energy in nuclear power plants and we thought it was fantastic. It was going to be energy that was too cheap to meter. Many countries were building power plants, which is why there are so many today. Then two things happened.
One thing that happened was Chernobyl [in 1986]. The Chernobyl reactor was using old technology. It was an accident waiting to happen. Not only that, it didn’t have what’s called a reactor pressure vessel at the top – no containment vessel – so if there was a problem inside and there was nothing in the top, everything spilled outside. Then the Russians didn’t tell anyone for a while. By the time they told anyone, there was a problem.
The second thing that happened was Three Mile Island in the U.S. [in 1979.] It would not have had nearly the amount of press that it had, except that a few weeks before, there was a movie called The China Syndrome with beautiful Jane Fonda. It was a very well-regarded movie. It showed a big explosion in a nuclear power plant. A few weeks later, there was a problem at Three Mile Island [in Pennsylvania]. There was a containment vessel, so everything happened inside the reactor and when there was a problem, things closed down. Three Mile Island was not a failure. It was a success. Nobody died. Nobody was even hurt. But because of the movie, everything was magnified. So Chernobyl and Three Mile Island together – plus the fact that the price of oil went down – effectively killed nuclear for many years.
But, today, the price of oil has gone up and is volatile. And we have the climate change problem, which is so much on the agenda and which is bringing nuclear back on the agenda.
Arabic Knowledge@Wharton: It has certainly raised awareness again, hasn’t it? A lot of people looking at nuclear energy also say it is uneconomical – particularly, let’s say, for the new builds. How do you respond to critics who say it is expensive?
Judge: It is expensive. There is no question that building a nuclear power plant is a big infrastructure project and it costs a lot of money. It is costing more money than people thought it was going to. But that is because we haven’t built one in such a long time. We all believe that after they build the first, second, third, and fourth, it will get less expensive just because we know how to do it better.
But once you put that money in a big power plant, the energy that comes out is relatively low cost. And the price is stable. It doesn’t gyrate like oil, and people tell me that nuclear energy is cost effective at about $50 a barrel. Now $50 a barrel is a price of oil we haven’t seen [consistently] for a long time. And nobody believes oil will be about $50 a barrel for any sustained period. So, funnily enough, nuclear may become a low-cost alternative.
One other point: Renewables are expensive. They are not inexpensive. We are spending millions and millions to try to prove the technology of renewables, whereas the technology of nuclear is proven. We don’t have all the research and development costs that must be capitalized into the price of renewables.
Arabic Knowledge@Wharton: Going from the discussion whether it is economical or uneconomical, what would you say the issue is around policy making in the industry?
Judge: There are a lot of issues around the policy of nuclear. You are right; the price is one of them. It is expensive. It is expensive compared to fossil fuels. But we can’t have fossil fuels for the rest of our lives or we are going to kill the atmosphere. There are other issues.
There is the political issue. You have to have a country that agrees to put nuclear on the agenda. So if the Labour government [in the U.K.] thinks it’s okay today, we can’t have the [future] Conservative government taking a different position tomorrow, because nobody will invest today if they think it won’t be around tomorrow. We will have to remove [investing in nuclear] from politics.
The other issue is planning. Where are you going to put this? Nobody wants a nuclear power plant in his back yard. Or so they say; in actual fact, that’s wrong. People who have nuclear power plants in their backyard love them. In Dounreay, up at the top of Scotland, there is a big power plant, which we are decommissioning at the moment, and the people in Dounreay are panicked that we are going to decommission them out of life – there will be no jobs, no schools, and no culture. Big infrastructure projects bring big money and they bring benefits to the community. So all the places that have had power plants in the U.K. are the ones that want them again. But planning is an issue.
The next one is price. You already discussed that.
People. There is a skills shortage. People haven’t been building nuclear power plants for years. You just said it. They haven’t been running them. All the people who know what they are doing have gray hair. I’m always amazed when I give speeches. [Everyone in the audience] all has gray hair. It used to be when I was young at [the University of Pennsylvania], being a nuclear physicist was the coolest thing. It was really sexy. That was like rocket science. Today, people at Wharton tell me the dream team has engineering undergraduate degrees with MBAs. Then you know what we do? We take these engineers and we make them financial engineers. We need them back on the power plants – building, designing, being real engineers in the real economy. But at the moment, we have to find a new generation that believes nuclear is sexy, engineering is sexy, science is sexy.
Arabic Knowledge@Wharton: How can that be addressed?
Judge: We are trying to address it in the U.K. I’m sure we’re doing it in America, too. But in the U.K., we have a National Skills Academy for Nuclear. We have [programs] in Manchester University, Imperial College, London, and various other places around the country that see the need to train nuclear engineers and are doing it. I also think it would be great for women [to enter the field].
Arabic Knowledge@Wharton: You mentioned that some countries are exploring nuclear energy and making headway in introducing it in their countries. I am intrigued about what your thoughts are about nuclear energy, for example, in the Middle East.
Judge: The Middle East is a wonderful story. About three years ago I gave a speech in Qatar and I said that I thought the GCC [Gulf Cooperation Council] countries are the perfect place to build nuclear because they didn’t have the problems of politics and there is a strong central government. The Sheikh says, "We will have one [reactor] here and we will have one here." And they could afford it. Well, until recently they had a lot of money in the Middle East. So what happened?
The people in Qatar said, "Lady Judge is crazy. There will never be a nuclear power plant in the GCC countries." Nine months later, I was in Abu Dhabi, which has a very enlightened government. They were [acknowledging that] although they have a lot of oil, it would run out soon enough. And, second, they wanted to have a diversified source of energy. So they are building Masdar City, which will be powered on renewable energy sources.
They are looking at other energy sources and they are having a big push on nuclear. They have hired some very good people and are doing everything right. They have signed up to all the international conventions and the ruler is saying, "We can afford to build state-of-the-art nuclear power" and "We can afford to build state-of-the-art technical universities" to address the problems that you and I have been talking about. Abu Dhabi says they are going to have the first power plant open by 2017.
Arabic Knowledge@Wharton: Let’s look at you, Lady Barbara Judge. You joined the U.K. Atomic Energy Authority in 2002 as a director and a few years later you were appointed chairman. But that was quite a departure for you. You had been a lawyer. You had made a name for yourself in the banking sector. So what attracted you to this sector or to that company in particular?
Judge: I had been an SEC [U.S. Securities and Exchange Commission] commissioner in the 1980s so I liked working for the government, and, at that moment in my life, I had had two businesses sold prematurely. One the venture capitalists sold and the second was taken over in essentially a hostile takeover. I thought, "What am I going to do?" I want to work until I’m 86 like my mother. I thought I would like to go back to the government. I really enjoyed it when I worked in the American government.
I called a headhunter and I said, "Do you have anything in the government?" The headhunter said, "Well, Barbara, I do have one job at the moment, which is a seat on the board of the [U.K.] Atomic Energy Authority." And I said, "That is not for me. I didn’t do science." The man said, "That’s all right. What they want is a business person who can run the audit committee, and you could do that."
You know how you get the jobs you really are not looking for? I went to the interview and they asked, "Why do you want this job?" I said, "I really don’t. I really just want to work for the government and be near what’s going on. But I have strong academic credentials and I’m a lawyer. Lawyers learn things. If you give me this job, I promise you I will learn it so well that when I find the job in the government that I really want, I hope you people will be my references." And do you know? They gave it to me.
Not only that. A couple years later I found the job in the government that I wanted. They were my references. I got that job. I did it for a while. But basically, I had fallen for nuclear.
Arabic Knowledge@Wharton: I’d like to wrap up by exploring what lies ahead for 2010. As chairman of the U.K. Atomic Energy Authority, what do you think are the main issues in policy priorities for the nuclear energy industry as a whole globally in 2010?
Judge: You put your hand on a number of them. First, the economics. We are going to have to get to a position where you can build a nuclear power plant with certainty in terms of the cost and time it takes to build. The two that are being built now in the West are taking more time than people thought and are costing more. But, we will [get there]. The Abu Dhabi proposition, I believe, will really work. As you know, the Chinese are building them now. The Indians will be building them. We will get better at it. In the U.K., we need to set a framework so that investors come in and do these big infrastructure projects that we were talking about.
Arabic Knowledge@Wharton: You want the private sector coming in?
Judge: That’s the way we have set it up [in the U.K.] At this moment, the government is not going to build these power plants. The private sector will build them. But we will do a framework so that [the government] will help address the planning problems. We will help the political problems. We will set out places where we believe nuclear is appropriate and put in place everything they need to make it an economic proposition.