France’s Areva SA is known mostly as a designer of light-water nuclear reactors, builder of transmission and distribution systems, and a miner of uranium, so the announcement today that it has purchased 100 per cent of concentrated solar power company Ausra Inc. came as a surprise. Ausra, based in Mountain View, Calif., was founded by Canadian inventor Dr David Mills. Mills developed the underlying technology as a student and professor in Australia, but located the company in Silicon Valley as part of a major venture capital infusion from Khosla Ventures and Kleiner Perkins Caufield & Byers. Mills is currently the company’s chief scientific officer.

Areva said today that the acquisition marks its entry into the solar thermal power market, where it intends to be the leader. The market itself is expected to grow 20 per cent annually over the next decade. This is just the latest in a string of acquisitions and deals aimed at broadening Areva’s portfolio of renewable energy products and services. The company has been pushing heavily into biomass power and has been building biomass/biogas plants in the U.S., Brazil, India, Thailand and other countries. It is dabbling in hydrogen production and fuel cell systems, and through its acquisition of Germany’s Multibrid is trying to establish itself as a future leader in offshore wind.

It’s going to take big, deep-pocketed companies like Areva to really push deployment of solar thermal and other promising renewables, so this acquisition of Ausra is a good sign of where the market is heading. Given that the nuclear renaissance simply isn’t materializing as expected, it’s wise for Areva and other big energy conglomerates to hedge their bets.

The Centre for International Governance Innovation (CIGI), an Ottawa a Waterloo, Ontario-based think tank founded in 2002 by Research In Motion co-CEO Jim Balsillie, says we shouldn’t expect any major expansion of the nuclear market before 2030. After that, the future of the industry is no more certain.

After three and a half years of extensive study, which included exhaustive consultation with industry experts and review of peer-reviewed literature, the policy think tank released a report yesterday that says the nuclear industry will have a hard enough time just replacing older reactors in the existing global fleet. Fact is, nuclear’s contribution to the global power mix since 2000 has fallen, as has the number of reactors in the fleet. Meanwhile, 2008 was the first year since the mid-1950s that no new nuclear reactor was connected to the grid. There have been refurbishments and life extensions, and there has been a lot of talk about building new reactors, but so far the massive, fast-paced expansion the industry has touted simply isn’t materializing. There will be some modest growth, but CIGI doesn’t expect nuclear will play a major role in combatting climate change before 2030. Between now and then, it also says alternatives — solar, wind, energy efficiency, conservation, smart grid technologies — will gain momentum and may ultimately prevent nuclear projects from getting a foothold. “Research and development is proceeding at such a pace for most of these alternatives that improvements in performance and cost will likely arrive faster than for nuclear technology,” the study concluded.

Think about it: by 2030 it’s quite possible we’ll have energy storage breakthroughs that give intermittant renewables baseload characteristics, but instead of deploying them in massive multibillion-dollar chunks, they could be part of a distributed energy system that locates power closer to consumers, and deploys it quickly and when needed.

CIGI lists a number of issues that have held back expansion of the nuclear power market:

• High upfront cost — reactors that can cost up to $10 billion a piece.
• Labour shortages resulting from boomer retirements and lack of investment in training and education.
• Long construction lead time.
• High risk of cost overruns and delay.
• High reliance on government subsidies and public backstopping.
• Ongoing concerns with waste management.
• Alternatives becoming increasingly more competitive.

Now, the nuclear industry isn’t oblivious to these issues, and indeed, there is a move underway to build smaller reactors that can be built more quickly, on time, and at a more manageable cost and pace. Also, these mini reactors would fit better into a distributed generation model, and attempts at developing small thorium-fuelled reactors would address waste management and nuclear proliferation concerns. CIGI acknowledged these developments, but said we’re not likely to see thorium reactors or mini-reactors being adopted in any significant way before 2030 — again, too late to be relied on for climate-change mitigation.

All this said, there will be growth — in China, in India, and a handful of other countries — and there will be refurbishments. This should keep the industry busy for the next couple of decades. No jobs are likely at risk here. Over the long term, however, the future of the nuclear industry would appear more uncertain.

My Clean Break column today takes a look at the so-called nuclear renaissance and how the economics of building new nuke plants — ones with reactors ranging from 1,200 to 1,800 MW in size — simply aren’t working. “We see little prospect of these costs falling and every likelihood of them rising further,” according to Citigroup, which put out a report last month slamming the attractiveness of nuclear power, largely because of the high development, construction and operational risks associated with them. “In our view, it is extremely unlikely that private sector developers will be willing or able to take on the construction, power price and operational risks of new nuclear stations,” Citigroup reasons. “The returns would need to be underpinned by the government and the risks shared with the taxpayer/consumer.”

The column goes on to discuss the benefits of small-scale nuclear power — i.e. less than 300 mw — and how a number of companies (as well as Sandia National Laboratories) are pursuing the market. In fact, the president of the American Nuclear Society says small nukes are now a big focus of the U.S. industry, which is beginning to acknowledge that utilities want a product that’s modular, scalable, less risky, and potentially less expensive than big reactors. The key is to build them in a factory setting using robotic assembly, and then deliver them filled with enough fuel to operate for up to 20 years without refuelling. The reactors would be low maintenance, have passive safety features, and would be buried underground. I’m not a huge fan of nuclear, but if we are to have it, I’m in favour of this form of distributed nuclear generation.

Ontario Power Generation released its second-quarter earnings on Friday and, little surprise, the province’s largest power generator saw its output drop by 19 per cent compared to a year earlier. A similar plunge was seen in the first quarter. Some of this drop has to do with conservation, good weather, and increased supply from private supplier of wind and gas-fired generation, but a big chunk has to do with the recession and its impact on a manufacturing-heavy province like Ontario.

But there is a silver lining. Ontario Power Generation saw its fossil-fuel generation, mostly coal, fall by a whopping two-thirds. It means that during the second quarter 91 per cent of electricity generated by OPG was free of greenhouse gases and other smog-causing emissions, thanks to our hydroelectric and nuclear fleet.

Wouldn’t it be nice if we could hold the line on emissions as the economy recovers? (more…)

Been crazy busy this past week but there’s been no shortage of interesting news in the cleantech and green energy space, so I’ll summarize a few of them here instead of doing individual posts. BTW: Hope everyone is enjoying their summer.

Click to the next page to read about General Fusion’s new infusion of cash, new fluids that can make enhanced geothermal more efficient, a McKinsey report that details the incredible payback of investments in energy efficency, and a University of Calgary report that says Alberta would benefit tremendously by plugging into electric transportation.

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