ITER Costs Double

[Josh Cryer]

rnebel,

Demand never materialized, and a lot of these projects that had counted on the demand projections were cancelled.

I've been arguing this for years, that basically the anti-nuclear activists were *not* responsible for nuclear "not taking over," it's the market, silly! Nuclear has still compensated for power usage over time (there's a great image from the IEA that I can't find showing sources of power). A lot of that is due to nuclear plants upgrading their equipment to produce more power (indeed some plants generate almost twice the power simply by doing upgrades; just because new plants have not been built in the USA does not mean nuclear isn't taking up the slack for demand).

I think there's an exaggeration about the public at large being "afraid of nuclear," and I think the dishonerable media, through their sensationalist headlines and stories, tries to invent something that isn't really there.

Ahah, I found the image I was looking for, check it out:



I'd contest the "limitless supply" ideas but I am admittedly biased toward renewable or Polywell type nails in the coffin to the problem. Otherwise even I (the dirty communitst, TallDave might call me) understand the market and its relation to the uptake of nuclear power.

[rnebel]

Josh:

I think that John Ahearne wrote an excellent article on this back in the late 80s or early 90s. I tried looking for it, but I haven't been able to find it. Ahearne used to be on the NRC. Regardless of how you feel about fission, it's a good read.

[jmc]

I have to say I have my doubts about the market being able to take care of all aspects of innovation. I'd rather just see it deal with supply and demand on trivial issues and the development of new consumer products that people don't really need.

When it comes to raising enormous ammounts of capital necessary to respond to a clear and imminent threat, there's a lot to be said for a concentrated government funded effort.

Consider economies of scale, the more you scale up production the cheaper things get. Thus concentrating funding in a few avenues where the operating principles are proven might make more sense than diluting it over many less certain avenues. If a government gives a company assurance that it will order a large quantity of it products that company can rapidly expand production with impunity knowing that the demand for its product is assured. In the world of free markets and uncertain future demand such expansion is bound to be slower.

Another limitation of the free market with regard to innovation is industrial espionage. A company which invests a huge ammount in research will not see the full financial benefit of its research in its own revenue. Rather often only a fraction of this will be realised by the company itself with the great bulk of the profits going to spin-off products developed by other companies using said companies core research. In a sense this is good, in that this is the best way to maximize the utility of a given piece of research, in another sense, the shareholders of a company may end up making a loss on funding a piece of research which massively benefits humanity.

On this front I think the government offering cash prizes to companies and research institutions who succeed in reaching specified research goals, deemed to be to the greater good, is the best way to proceed. That way the profits of the companies that do the best, fastest, research can be instantly realized without all that mucking about with marketing and worry about demand in tens years time for your product, etc.,

[icarus]

jmc: you mean massive concentrated government efforts like Tokomak fusion?

What a success that turned out to be. Big government projects are more likely to to be big wasteful stuff ups that no one is accountable for, or worse get paid more to perpetuate indefinitely. The free market does not waste society's scarce capital resources on such scales.

[ravingdave]

rnebel,

Demand never materialized, and a lot of these projects that had counted on the demand projections were cancelled.

I've been arguing this for years, that basically the anti-nuclear activists were *not* responsible for nuclear "not taking over," it's the market, silly! Nuclear has still compensated for power usage over time (there's a great image from the IEA that I can't find showing sources of power). A lot of that is due to nuclear plants upgrading their equipment to produce more power (indeed some plants generate almost twice the power simply by doing upgrades; just because new plants have not been built in the USA does not mean nuclear isn't taking up the slack for demand).

I think there's an exaggeration about the public at large being "afraid of nuclear," and I think the dishonerable media, through their sensationalist headlines and stories, tries to invent something that isn't really there.

I'd contest the "limitless supply" ideas but I am admittedly biased toward renewable or Polywell type nails in the coffin to the problem. Otherwise even I (the dirty communitst, TallDave might call me) understand the market and its relation to the uptake of nuclear power.

My recollection is that the Black Fox nuclear powerstation was killed here in my home state because of environmentalist roadblocks and the ever increasing cost of fighting them.

http://en.wikipedia.org/wiki/Black_Fox_ ... ower_Plant

I guess Legal costs and media costs for fighting against "rabble rousers" is part of the market too. If money is going out, then it does affect the bottom line.


David

[TallDave]

Hey, as long as you don't advocate the government seizing control of private property (i.e., communism), I won't call you a Communist, dirty or otherwise.

Yeah, there's no question the optimistic forecasts for demand didn't materialize, and that certainly had an impact. But while we might not have approached France's 80% (due to our lesser population density and the optimum sizes for nuke plants), we could have increased the percentage supplied by nuclear here to at least something around 40%.

20 years of no new nuke plants isn't just the market, though it certainly contributed. Examples like the above abound.

http://en.wikipedia.org/wiki/Anti-nucle ... ted_States

What a success that turned out to be. Big government projects are more likely to to be big wasteful stuff ups that no one is accountable for, or worse get paid more to perpetuate indefinitely

I couldn't agree more. There was an ITER article recently that ended with an ITER scientist's sentiment that it had to be funded whether it made sense or not, just because it had so much inertia; this, while more economically promising techs like Polywell go begging for a few million here and there.

[jmc]

Concentrated government efforts have produced the hoover dam, which needed federal aswell as private funding.

http://digital.library.unlv.edu/early_l ... short.html

And ofcourse french nuclear power required funding from the government to get off the ground.

The market only allocates money efficiently when the industries are well understood, sometimes private funding can go horribly wrong too..

http://en.wikipedia.org/wiki/Tulip_mania

Spending vast ammounts of money on Tulips does not strike me as an efficient use of resources.

There were other bubble of misplaced private investment throughout history aswell, the Southsea bubble, the dotcom bubble, the railway bubble.

Without government funding jet aeroplanes would not exist today.

Yes governments mismanage projects on occassion too, but I don't think private investors are much better either. Whether ITER does prove to be a waste of money or not remains to be seen, the same applies to polywells. Regarding the Tokamak programme as a whole though, it has allowed us to approach controlled fusion plasma conditions more closely than any rival technique to date.

[TallDave]

Sure, one could cite the Panama Canal as well.

What do all those big projects have in common that ITER doesn't? Economic return.

ITER is much more like the Moon program: huge investment, no real return,since the tech probably has little commercial applicability as long as it has to compete with fission, which is probably at least 1,000 years. And unlike Apollo, we don't even get bragging rights out of it.

Yes governments mismanage projects on occassion too, but I don't think private investors are much better either.

The Soviet Union was founded on that principle. Hayek and Friedman predicted it would fail, and they were proved correct.

Spending vast ammounts of money on Tulips does not strike me as an efficient use of resources.

Sure, neither is caviar, $100 wine, Faberge eggs, or spending $200M to produce a couple hours' entertainment on film. Strictly speaking, the Mona Lisa is just daubs of paint on canvas; it's ridiculous to think it could think it could be worth tens of millions.

But none of that's the market's fault. The market efficiently fulfills our irrational desires along with the rational.

There's an economic term for this called "utility." If I derive utility from my Corvette, then I may be willing to spend money to buy it even though it moves from point A to point B less efficiently (but with a lot more fun!). If I derive utility from owning the most prized tulip, similar logic applies.

[olivier]

I fully share jmc's doubts on the efficiency of markets. They are not even working for things which everybody understands, like food or lodging. What can you expect when dealing with sophisticated issues, especially innovation? It is trivial math that truly free markets lead to monopolies as surely as gravity leads the marble to bottom of the bowl. We could also discuss the role of widespread information and IT. But honestly, business today (what makes really big money) is more about information asymmetry and moral hazard than innovation.

Machiavelli wrote that you have to choose between the worst and the lesser evil. The free market is a lesser evil, just as "democracy is the worst form of government, except for all those other forms...", from Churchill's words. You cannot avoid recurring crises without some kind of control, either by the government or by someone else. What is more, efficiency is not a question of government vs. private, it is a question of relationship between the elites and the decision-makers, two different populations (Dr Bussard or Dr Nebel represent a scientific elite, decision-makers are powerful people in Washington).

The massive deployment of nuclear power in France in the early 70's followed from a governmental decision which was all but democratic (the Parliament was not even informed). Positive results overall, in my opinion. By the way, the French culture of state control has not much to do with the influence of Communists on the government. It is a legacy of King Louis XIV, the guy who reportedly declared "I am the State" (17th century's style of leadership!). Whatsoever, this lack of democracy is the original sin which the nuclear industry has to live with. You can still feel it today: in its management style (albeit slowly evolving), in the attitude of the public (it is vastly in favor of nuclear energy but has no confidence in the industry, at all). This is going to be a problem in the future.

Coming back to ITER, I would consider myself sceptical, after reading Sébastien Balibar, Richard Nebel and others. I know ITER is not likely to provide a solution during my lifetime but, at least, I do not think the ITER scientists are stealing my taxpayer money.

MSimon reminded us of the large coal reserves. For sure, coal is going to take the lead if the markets play freely. Welsh mines are about to reopen (was Margaret Thatcher consulted ?). The scenario I have in mind (see below) is more pessimistic for coal than Msimon's (that would be interesting to understand why). Things are getting nasty around 2050-2060.

The red figures are the anticipated growth rates in world energy use. "A trouver" (the white area on the top right) means "To be found", in other words "We have a problem". GTep = Gtoe, ENR = renewables, Charbon = coal, Pétrole = oil. The source is an EDF R&D study, quoted in manicore.com.



For the short term (say 2030 !), I'd rather rely on fast reactors but I do not see much happening in the western industry. Go markets, do your duty! On the opposite, the Indian industry is moving much faster thanks to the very visible hand of their government.

[TallDave]

I fully share jmc's doubts on the efficiency of markets. They are not even working for things which everybody understands, like food or lodging.

Not sure on what basis one argues this. Historically speaking, food and housing are both quite abundant. Compared to the 1950s, the average American has twice as much room and can afford something like 5x as much food. The recent spike in food prices barely brings them up to 1990s levels.

Why is this so? Over that time markets having been driving increased efficiencies. Crop yields improve by 2% a year, and we've had a plethora of productivity improvements across manufacturing and building.

"A trouver" (the white area on the top right) means "To be found", in other words "We have a problem".

Fission fuels are more than abundant enough to fill that gap, if economic fusion (i.e. non-ITER fusion) doesn't happen. We haven't even touched thorium yet.

[MSimon]

Government vs. private funding:

A private market screws up the assets get liquidated.

Government screws up: it doubles down.

I see a place for government in high risk Research. Development and deployment should be left to the market.

[olivier]

Not sure on what basis one argues this.

A market is a crowd and a crowd often behaves stupidly. Examples: world food prices, UK housing crisis and of course subprime mortgages. Some benevolent intelligence has to regulate and correct the slight imperfections of the market. Should it come from a central or local government, from NGOs or an enlightened despot, I do not care as long as the job is done. Otherwise, big mess. Recurring crises do not prevent productivity improvements in between, hopefully.

We haven't even touched thorium yet.

Thorium is a fine fuel. It will need time and political will to be deployed. India is ready.

A private market screws up the assets get liquidated.

I agree. That ought to be the rule of the game, but more than never private businesses (those who have the right connections) get access to government money and then you are back to case #2. In France we call that "privatizing profit and nationalizing losses" and it is becoming a nasty habit nowadays.

I see a place for government in high risk Research. Development and deployment should be left to the market.

Fine with that.

[MSimon]

benevolent intelligence

No such animal currently available.

Some one is always looking for the New Man. The New Socialist Man, The New Libertarian Man, etc. All such schemes founder. when such a man can't be found.

If you have a cure for corruption besides eternal vigilance I'd like to know what it is.

[TallDave]

A market is a crowd

A market is a group of individuals, some of whom will have made good decisions and some of whom will not. There's always someone buying at the top of the bubble... and someone selling too.

Examples: world food prices, UK housing crisis and of course subprime mortgages.

Again, food prices are not that high by historical standards, and they're up because food is more expensive to make with high fuel costs, and because at the cuirrent price of oil versus the current price of food, it makes sense to convert some food to fuel. The UK housing crisis is the natural result of government zoning. The subprime crisis is the logical result of the banks being told they must lend to bad credit risks and the government guaranteeing FNMA when it backed those bad risks.

Recurring crises do not prevent productivity improvements in between, hopefully.

Slows them a bit. But people have mostly forgotten what a real economic crisis looks like. We haven't had one since the 1930s, and if we're lucky they're all in the past. These days, the market drops 5% and a few big companies flounder and everyone thinks it's the end of the world.

[olivier]

If you have a cure for corruption besides eternal vigilance I'd like to know what it is.

No silver bullet. Eternal vigilance is the general idea, it must be embodied somehow (gov, NGOs, ...). I would rely on information/education of the public and sanctions. We tried the guillotine once, it helped out but had bad side effects. Tar & feathers? Hmmm. What you did to Jeff Skilling perhaps.
BTW I used italics for benevolent intelligence in order to suggest some irony. Smileys are less ambiguous !

Some one is always looking for the New Man.

No New Man but 200,000 new men on Earth everyday. I am wondering how they are going to be educated.

the government guaranteeing FNMA when it backed those bad risks

I guess many people knew long before. Why didn't markets sanction that much earlier?

people have mostly forgotten what a real economic crisis looks like.

TallDave, you are so right. Here is a photo taken in Germany, 1923. No coal, worthless bank notes : the fuel of the future ?