Contradictory policies – buying votes vs. saving the climate

The Austrian government plans to increase the subsidies for commuters. People who live at least 2 km away from their working place have, in principle, the possibility to obtain a tax discount on their fuel expenses.

The current level of subsidies is shown in the following table:

Distance           EUR/year

2-20 km           373

<40 km             1476

<60 km             2568

>60 km             3672

For the sake of completeness we have to say that the above-mentioned subsidy level applies only if there is a) no means of public transport available, or b) using public transport would lead to an extensive traveling time.

Let us examine the case of a commuter living 60 km from his/her place of work. He travels 5 days a week, the car consumes about 6 l/100 km and the current price of gasoline is about 1.50 EUR. The total gasoline expenses will therefore be around 2400 EUR per year. The expected tax benefit compensates his entire travel costs.

In case the commuter has the option of using a different means of transport the subsidy levels are somewhat lower as shown in the table below:

Distance          EUR/year

20-40 km        696

<60 km             1356

>60 km             2016

This is the current state of affairs. The government is now to increase the subsidy by 1 EUR per km. Thus, the tax benefit for our example will climb up to 2628 EUR, making it even more profitable to use the car for going to work.

Critics say that this move by the two governing parties is due to the upcoming elections later this year. There may be some truth in it, as it is common practice to distribute benefits during the electoral period. In that context it may be worthwhile to mention that Austria has about 1 million commuters. This is a non-negligible part of the electorate given that the total population is about 8 million.

There is, however, one more striking issue which should not be overlooked. Austria has committed herself to strict carbon emission targets. Now the policy of making car use even more beneficial is in stark contrast to these environmental goals which are never missing in public statements by the very same politicians.

These subsidies which have a long-time tradition are supposed to compensate people for their extra expenses for going to work at a distant location. It goes without saying that, over the time, commuters have got used to this kind of state subsidy. Nevertheless, there is no real justification for this sort of tax benefit. People always have to choose between options. And the alternative to commuting is moving to a location which is closer to the place of work. In an ideal world the higher cost of living in a city would more or less be equivalent to extra expenses for travelling to and from the job.

Now as the subsidies come into play the choice between living in the city or in the countryside is distorted by the simple fact that people who do not have to commute have to pay higher taxes in order to compensate for the cost of traveling of the commuters.

This is not only a waste of public money, it also creates more traffic, thus more energy consumption, more carbon emissions, more accidents etc.  And it reveals the true priorities of the political class.

Multi-functionality and multiple use: important features for sustainable cities

I want to write again on a topic that highly interests me. I wrote a blog ‘A sustainable city needs to be smart’ in May 2012. The topic I want to discuss this time builds on this subject.

I did some studies about making urban areas more sustainable during my work as a researcher at Wageningen University (The Netherlands). Together with a colleague with a background in spatial planning, I performed a study on the diversity of urban areas. We wrote a paper on the subject. We discussed the importance of a multi-functional urban area. It is important to see the chances the different urban functions have to offer in reaching a sustainable future.

In that way, having an industrial area in the vicinity of a residential area could be advantageous. Think about the concept of ‘Industrial Ecology’, with the case of Kalundborg in Denmark as example. Industrial Ecology can be seen as an example of park management: the companies within the borders of an industrial area try to find ways to re-use materials, to create new products from residual resources and to limit waste. A way of dealing with empty space in industrial areas and allowing other companies to build an industrial facility in that area, could be to use the local characteristics and available resources as restrictions. In that way, only a company that can be part of the chain is allowed to start its activities in the industrial area.

Park management is a good start, but it is not enough to make a complete urban area more sustainable. Therefore, we used the term ‘urban management’ (Leduc & Van Kann, 2013), in which we propose to broaden the scope and to look for options outside the borders of the industrial area. Often these industrial areas are close enough connected to residential areas or office space were, e.g., waste heat can be very useful, or residual resources from industry can be used to build houses, roads. Empty space in industrial areas can be used to collect water or to produce energy. It is very important to find synergy, so collecting water and energy can go together.

In order to create a sustainable urban area, we need to know how the area looks like. So, it is very important to perform a thorough check of the area first. Use this check to find out which functions are available in the area, at which locations, at what distances, what type of energy, materials and water is used and how much. Try to answer which type of energy, materials and water is needed at which quantity, at which location and when. An answer to these four questions can help to find better, more efficient ways to use energy and other resources, and to re-use resources.

The idea is to transform the urban area from a linear, resource-to-waste, metabolism to a more circular metabolism. In such a system resources can be used multiple times, more efficiently and effectively, and waste is not seen as waste, but as a residual resource. Any resource – energy, water, material – can be seen as a resource with still some remaining quality after use. When producing energy, lots of heat is produced that is mostly thrown away. This waste heat can also be seen as a residual resource that can be used by other urban functions for industrial processes or heating purposes. A similar idea can be found for water and materials: certain tasks in the household or industry need clean water, which after use will be ‘grey’ water and is usually eliminated via the sewer. If that ‘grey’ water is seen as a residual resource and not eliminated immediately, it can be used for other purposes like toilet flushing or gardening. An example for materials could be wood: it can be used immediately to be burned and produce energy, but it could be used more effectively. The wood could first be used to build a house, after the lifetime some of the beams could probably still be used to make furniture and in the last phase the wood could be used to produce energy. By following this chain, the same piece of wood would still produce the same amount of energy, but its qualities are used more effectively.

The ideas are based on research performed by the author and described in a published paper:

Wouter R.W.A. Leduc and Ferry M.G. Van Kann. Spatial planning based on urban energy harvesting toward productive urban regions. Journal of Cleaner Production, 2013, 39, pp. 180-190.

Available by author on request.

Wouter Leduc

By wouterleduc Posted in General

Book Review: Energy Innovation – Fixing the Technical Fix

The energy policy of our time is a mess. What can be done about it? Lewis Perelman addresses the problem by first analzsing its various roots and subsequently pointing towards possible solutions. Not surprisingly, the roots are manifold comprising technical as well as political sources. In a nutshell: there are very good reasons to go “away from emissions regulation and toward technology innovation”.  The ultimate goal is to “make clean energy cheap”.

Clean energy, however, does not become cheap by subsidising a particular branch of industry (as is currently the case in Germany with detrimental effects to the economy) but rather by providing the appropriate technology which is competitive against conventional energy sources.

Needless to say that there is a lot of effort put into R&D as well as innovation programs funded by countries and/or international organisations. In spite of that the great breakthrough is still lying ahead of us. Nevertheless, technology is the ultimate answer to our energy problems. Clearly, there are clean technologies, but so far none of them is cheaper and/or equally practical as the conventional carbon-based ones.

Perelman is convinced that governments have an important role to play in that game. I wonder why the market should not be able to create its own viable (and sustainable) solutions without regulators interfering. Nevertheless, also the role of government has its limits as Perelman acknowledges.

Thus the only way out from the current state of affairs is a big technology breakthrough. But how do we get there? There are clearly new ways needed to stimulate innovation in the energy sector. Thinking out of the box is paramount.  Going beyond conventional mechanisms to promote innovation may open new possibilities. Perelman discusses various ways to overcome the traditional path of innovation management, like new financing models, prizes, the role of philanthropists etc.

All in all, Perelman’s book offers a great insight into the complexity of the energy problem as well as into the even more challenging complexity of how to overcome it. Technology can save us – it has to!

Energy Innovation – Fixing the Technical Fix

by Lewis Perelman


Germany´s Energy Future – part 2

One year ago Germany decided to quit producing nuclear energy by 2022. Since nuclear power plants are a central pillar the German energy mix, contributing some 22.5% to the entire electricity output in 2010, this means that until 2022 the equivalent of 140.6 TWh (2010) has to be replaced by other sources. This is a minimum estimate ignoring increase in consumption.

Already at this moment Germany begins to face the consequences of last year’s decision. As nuclear plants are successively being phased out, more strain is put on other sources, in particular renewables. In addition, the power grid is experiencing severe tensions as more controllable sources of energy are being replaced by less controllable (and predictable) ones. Especially the latter is a constant, or rather growing source of trouble.

One the one hand, it’s a clear goal of German policy to increase the share of renewables substantially. On the other hand, it seems implausible to be able to replace the entire nuclear bloc by wind and solar capacities only. Thus, it appears inevitable to commission a number of conventional, i.e. thermal power plants which are supposed to act as a backup for the fluctuating input from e.g. wind farms.

In my view, it is pretty obvious that wind will be the main source of renewable energy in the future, considerably outnumbering all other renewable sources taken together.

In 2010 the total capacity of German wind farms amounted to some 27190 MW which produced some 36.5 TWh. Taking into account the average specific output of wind farms as calculated in one of our previous postings we may estimate the extra capacity needed in order to fill the gap. Then we could show that the average output of wind power installations amounts to some 1600 MWh annually per MW of installed capacity.

Having these figures at hand we may easily estimate how much extra wind capacity is needed in order to replace nuclear in its entirety. Thus if wind power is supposed to be the only substitute (which is certainly an oversimplified approach) it would mean that Germany needed almost 88000 MW of additional wind power by 2022, thus an extra three times as much as was installed up till 2010. This in turn would mean that the country needed more than 115000 MW in wind turbines by the time the last nuclear power station is decommissioned.

Between the year 2000 and 2010 an average of 2000 MW was commissioned annually, in total some 20000 MW of wind power. Extrapolating this trend to 2022 implies that some 24000 MW of new capacity could be added to the grid until D-day. However, what is needed is almost four times as much. Thus the annual growth rate should be close to 7800 MW. Even if we assume that wind will only replace half of the nuclear output, a growth rate of about 4000 MW annually would be necessary, i.e. twice as much as has been the case during the boom period 2000-2010.

The figure below shows two different scenarios for Germany´s wind power capacity. The business-as-usual scenario (BAU) is based on the assumption that wind capacity will grow at a rate of 1900 MW per year, which is equivalent to the increase in 2010. The Target scenario on the other hand assumes an annual growth of 7800 MW which would theoretically be sufficient to replace Germany´s entire nuclear production as seen in 2010.

Total installed wind power in Germany.

Given that there is considerable resistance among the population against onshore wind farms, it is indeed hard to see how this can be achieved. In addition, as  subsidies for renewable energies are becoming a serious burden for consumers, they are likely to be reduced in the future. This in turn may jeopardize further investment in wind power, and thus even the more conservative BAU scenario may, in fact, be too optimistic. As a consequence, other energy sources are desperately needed if Germany wants to maintain her standard of living. We will come back on this issue in another posting.

Fuel Poverty in the UK

This time I would like to cover a very different aspect of energy and its usage in everyday life. So far there is  no apparent lack of energy, technically speaking. Energy is available in abundance, and the only restriction to using it is the price we are asked to pay for it. Thus big users will eventually find themselves paying a huge bill. But it´s not only big consumers who might face a hefty burden from their energy bill. More and more people are using a substantial amount of their available income in order to  buy the energy they need. In particular, this is true for heating which is also one of the biggest parts of private energy consumption.

The UK statistical office is collecting data on fuel poverty. The term refers essentially to energy needs for heating purposes and the relative amount of household income people have to spend in order to “maintain a satisfactory heating regime”, i.e. 21 °C in the main living area and 18 °C for other rooms. In particular, people are considered to suffer from fuel poverty if they have to spend more than 10% of the household income on fuel for heating.

The figure below gives a sketch of the situation in the recent past (2003 and 2009).

Number of fuel poor households in millions. Abbreviations: dc – dependent children, hh – household.

The first observation we make is that the number of fuel poor households has apparently dramatically increased between 2003 and 2009. During that period the number of households concerned has, on average, more than doubled. Thus, fuel poverty in the above sense is definitely increasing and showing a severe social impact. Energy is becoming a scarce and to some extent even luxurious commodity.

Another observation is that specific groups are particularly hit by this phenomenon. People without dependent children are more likely to suffer from fuel poverty than those having kids. Moreover, persons older than 60 years are also facing a greater risk of getting fuel poor. The same is true for single persons when compared to couples.

The causes for this are manifold. Energy prices are on the rise. They climb faster than the average income, especially for retired people. Another factor is certainly the economic crisis which hit a number of European countries in 2008. So far we are still far from a sustainable recovery. Therefore, we may well assume that the situation has aggravated in the meantime.

Yet another factor coming into play is related to economic circumstances: Many elderly people may not be able to afford refurbishing their houses such that they consume less energy, especially for heating. Renovating old houses is a costly undertaking which may simply go beyond many people´s financial capabilities.

Fuel poverty is a critical issue not only in the UK. Also other countries like Germany encounter the same problem. However, most of those countries do not collect the respective statistical data as is the case in the UK. Therefore, it is extremely difficult to assess the severity of fuel poverty for other countries. Taking into account that energy is of critical importance to the functioning of our societies, it would be highly desirable to collect those data in order to tackle the problem as soon as possible.

Energy and Transport

Transport is one of the big consumers of energy. As we have seen in some of my previous posts, there is a clear tendency to become more energy efficient. Does this also apply to energy used for transport purposes?

Eurostat provides a collection of data on this issue which may give us an answer.  Let us look at the transport energy per unit of GDP. This is certainly a sensible measure since we may consider a link between economic activity on the one hand and transport (of both people and goods) on the other. So whenever the economy is growing (or shrinking) transport is likely to follow suit.

We consider here the case of Germany, France and UK, i.e. the biggest economies of Europe. The figure below shows how energy demand for transport per unit of GDP has developed since 1995. The curves are indexed with 2005 = 100.

Energy demand for transport purposes per unit of GDP.

The message behind this figure seems to be obvious. Over the past 15 years there has been a certain decoupling of economic performance and energy demand for both passenger and goods transport. Thus per unit of GDP less energy is used for transport. We are becoming more energy efficient.

Having a closer look at the figure we may also observe that the downward trend is still unbroken, i.e. there is no flattening tendency. This leads us to the conclusion that there is room for further improvement of energy efficiency in the transport sector.

Nuclear power – a solution for a sustainable future?

I want to write about this subject because of a talk by a science professor that I heard a few weeks ago. He was talking about his vision for the future and how that future would look like concerning the CO2-problem and sustainability. According to him nuclear power should be used in order to be able to produce the electricity that will be demanded for in the future. Solar and wind options will not be able to succeed in producing enough energy for the future.

Solar based power and wind based power could never become a viable option to fulfill the world’s demand for energy. Their efficiency is limited, based on physical laws. I can partly agree with that. At the moment, the efficiency of commercial PV-panels is about 15%. At the other hand, the efficiency of PV-panels is increasing and a lot of research is done to improve the technology (see fig. 1).

Source: National Renewable Energy Laboratory

Fig. 1: Efficiency of PV-panels

The results of these tests have to be proven outside the laboratory, but the developments go fast. Another solar based option is to build large fields of PV-panels on empty fields, on empty land in industrial areas, on contaminated soil (examples of PV-fields in former coal-mining areas), floating on lakes or water reservoirs (e.g. at horticulture sites: In this way, a sustainable option for electricity production is combined with other functions, a multi-functional approach; or contaminated areas can be of some use. We have to look for much more of those options to reach a sustainable future.

The efficiency of wind turbines nowadays is much higher than those 15-20 years ago. More is known also about the problems concerning turbines and possible methods to tackle many of those problems (noise pollution is almost decreased to zero). Next to the turbines on land, the option for turbines at sea came into the picture. That seems a good development.

A sustainable energy system has to be based on multiple technologies: wind and solar power, biomass, hydropower, etc. We all know that the wind and sun cannot produce energy constantly. Therefore, there is need for back-up power or storage capacity. A viable option seems the combination with hydrogen production. A gas that can be stored and used in a later phase to produce electricity. Another option: a large lake in two levels, so water can be pumped up when there is excess of electricity. In moments that wind or sun cannot produce electricity, the water can run down via a turbine and produce electricity via that technology.

Going back to the nuclear power option. I tried to indicate that I believe the efficiency of wind and sun can be improved further. One thing I know about nuclear power is that there is a huge problem with nuclear waste after electricity production. If it is stated that, according to physics, PV-panels can never reach high efficiencies, for sure the physical laws have also to be taken into account when proposing a nuclear solution. We have to keep in mind the physical aspect of ‘half-life’ (fig. 2). The use of nuclear power produces nuclear waste that has a considerable half-life and we do not have a proper way to deal with that waste. The best option we came up with, at the moment, is underground storage. Thereby, hoping that the caverns can store the waste without leakages or other disasters. But, we do not know what will happen in so many years: does the underground storage last forever, do people in centuries or millennia from now recognize  the symbols we have used, can they tackle leakage or misuse?

Isotope Percent in natural uranium Half-Life (in years)
Uranium-238 99.284 4.46 billion
Uranium-235 0.711 704 million
Uranium-234 0.0055 245,000
Plutonium-239 24,110
Plutonium-240 6560

Source: Institute for Energy and Environmental Research, ‘Uranium, its uses and hazards’; Factsheets, posted on December, 2011; Last modified May, 2012 ( + Wikipedia, ‘Radioactive waste’ (

Fig. 2: Half-life of some uranium and plutonium isotopes

I would opt for a sustainable future in which I do not see a role for nuclear power. We have to focus on other sources and invest and research more in solar, wind, hydro, etc. I think our future will be a combination of centralized, sustainable solutions (wind turbine parks, hydro power plants, CSP/PV-fields, etc.) and decentralized sustainable solutions (local production with sun, wind, hydro, etc.). Sustainability deals with the here and now, but also with there and later. We have to keep in mind the generations that come after us.

The Oil Traders’ Word(S): Oil Trading Jargon

Stuck for words?

A book review by Nicholas Newman of Stefan van Woenzel new book ‘The Oil Traders’ Word(S): Oil Trading Jargon’.

Sometimes, you can be at a meeting and you have no idea what they are talking about. This is especially the case with the specialised technical business dialect used by oil traders. For instance, do you know what ‘AAA’, ‘going long’ or even ‘lay days’ means?

You will need to know at least some of these terms when you are involved in sending crude oil from Brazil to Germany via a large oil tanker across the Atlantic to Rotterdam, where it is refined and the resultant products are barged up the Rhine to a terminal in Frankfurt.

Well, AAA in this case does not stand for the American Automobile Association but Stefan van Woenzel defines ‘AAA’ as the American Arbitration Association, which provides recognised independent arbitration services between clients.

As for ‘going long’ it’s not some cricket term, but the purchase of a commodity like crude for storage, supplies or speculation.

However, ‘lay days’ means the period of time described in the charter party during which time the owner must tender his ship for loading.

I will leave you to read the book to find out what ‘charter parties’ mean.

This book includes various oil terms and definitions derived from day to day experience for general trading, paper trading, risk, logistics, refinery, oil documentation, HSE, oil traders words of wisdom and conversion formulas. Well, this book provides you with a good clearly written definition of what  are these terms and many others mean.

This new book “The Oil Traders’ Word(s): Oil Trading Jargon” by Stefan van Woenzel, Lead Negotiator Crude at Statoil ASA, provides you with more than 2000 most commonly used oil trading related definitions.

As for his‘old traders words of wisdom’, I especially liked ‘sell in May and stay away’. Since most traders decide to go away on holiday in May, leaving fewer trading opportunities to participate in. Whilst, ‘I am a student of the market and my job is to learn’ means that since the market is always evolving, you need to be constantly learning to keep ahead of the game.

Stefan van Woenzel, book is designed as a communication aid to allow people involved in the global oil trading world including oil traders, operators, contract personnel, claims departments, controllers, storage people, shipping agents, oil brokers, energy journalist’s, regulators and policy makers, et cetera to communicate clearly, effectively, efficiently and precisely.

Hopefully, this book should help avoid some of the recent notorious trading losses that some traders have experienced in the past few years.

In addition, I especially appreciated the practical career advice; Stefan provides in his foreword to the book, he advises traders who are seeking to be successful, to get out of the office. They need to promote themselves by networking, not only at stuffy business meetings, dinners and conferences, but by also getting out in the real world and participating in a sport like golf or sailing with colleagues, customers and rivals. As an energy journalist and consultant of some years’ experience, I have gained many opportunities from playing golf or sailing with industry clients.

This book is available in both hardback, paperback  and  e-book format. The author warns that this book is not meant to be used as legal documentation related to commercial or operational decisions.

Overall, I found this a very useful book, which I will recommend to my colleagues in the energy game, whether they are traders, academics or fellow energy journalists.

Price £24-95

  • · Paperback: 560 pages
  • · Publisher: AuthorHouseUK (29 Jun 2012)
  • · Language: English
  • · ISBN-10: 1468586041
  • · ISBN-13: 978-1468586046
  • · Product Dimensions: 15.2 x 3.1 x 22.9 cm
  • ·

Do Energy Saving Light Bulbs Really Save Energy?

Some considerations about the usefulness of energy saving light bulbs.

Conventional light bulbs which are now banned in the EU since 1st September 2012 are very inefficient when it comes to turning electrical energy into visible light. More than 90 % of the energy input are emitted in the form of heat. Thus with a less than 10 % efficiency in terms of light production the classical light bulb may indeed look a rather hopeless case and energy saving lamps appear to be the preferable choice.

However, a closer inspection shows that the odds are not at all so bad for the conventional lighting medium. During the cold season, i.e. whenever people feel the need of switching on their heating, the classical light bulb contributes to the heating effort. Thus whenever we count heading degree days the old fashioned light bulb lowers the need to switch on the heating. From a physical point of view during the heating period the energy saving light bulb does not save energy. That is a simple deduction from the law of energy conservation. On the contrary, if we turn to energy saving lamps, the work load of our heating systems gets higher.

On the other hand, it is true that during the warmer period energy saving light bulbs are the better choice because then we really do not need any extra heating. So in order to understand the energy balance of both lighting systems we developed a model which is based on the following assumptions:

Get-up time: 6:00

Leaving home in the morning: 8:00

Returning home in the evening: 17:00

Sleepy time:  24:00

In addition to that we assume an average performance of 200 W(el). Our model is then applied to two European cities, one in the northern (Stockholm) and the other in the southern part (Rome). From this model it follows that the maximum number of lighting hours per day is 9 which is reached during the dark winter months. On the other hand, during the long daylight hours in summer, it may be necessary to switch on the light for no more than 2 hours per day. Electricity consumption for light sources is thus fluctuating between those two extremes. Fig. 1 shows the distribution of lighting hours in both cities.

Fig. 1 Lighting hours in Rome and Stockholm.

How much artificial light we actually need is largely determined by the length of the daylight period which in turn is governed by sunrise and sunset.  The data for those astronomical observables are easily accessible, clearly highlighting the differences between northern and southern locations. Although these differences may be very large during certain periods of the year, their overall impact on our model is far less dramatic than expected. On an annual basis the number of lighting hours in Stockholm is not very much different from the one in Rome, 2160 vs. 2110, respectively, i.e. less than 3 percent difference. These lighting hours correspond to an average electricity consumption of 432 kWh and 423 kWh, respectively.

Lighting and heating

What is, however, different is the number of heating degree days between the two cities. Correspondingly, the number of lighting hours during the heating period is much larger in northern Europe than in the southern part. Our analysis shows that more than 80 % of lighting hours are consumed during the heating period in the case of Stockholm. This, in turn, means that during that period there is no gain from using energy saving light bulbs. The respective number for Rome is 62 %. Thus also in southern Europe a substantial amount of lighting is used when people are likely to put on their heating. The rest of Europe lies, in its vast majority, somewhere between these two extreme values. There are exceptions, but these are statistically insignificant.

From a physical point of view, energy saving lamps are only useful when it is warm outside, because then there is no need for excessive heat. During winter those lamps do not lead to an overall reduction of energy consumption. Let us look at the situation from the point of view of a classical light bulb. It wastes energy in summer, but not in winter. According to our model, the waste energy produced by a classical lighting system amounts to about 78 kWh (Stockholm) and 145 kWh (Rome), respectively, over the whole year. We may also ask how much heating energy we can save by using normal light bulbs. The figures are 311 kWh (S) and 235 kWh (R), respectively. Thus we may conclude that, physically speaking, the energy balance of classical light bulbs is clearly better than the one of their energy saving competitors. Their contribution to heating in winter outweighs their waste of energy in summer. Of course, the effect is much more pronounced in northern Europe than in the southern countries. But even in the latter ones, the result is undoubtedly in favour of normal light bulbs. Figs. 2 and 3 demonstrate the contribution to heating and the waste energy of conventional light bulbs for the two cities.

Fig. 2 Heating potential vs waste energy of conventional light bulbs in Stockholm.

Fig. 3 Heating potential vs. waste energy of conventional light bulbs in Rome.

It is, of course, conceivable that under certain circumstances energy saving light bulbs live up to their expectations. Our model indicates that this may be the case in tropical areas where heating is hardly ever needed.

In any case, energy-saving lighting systems are not reducing energy consumption at the level of private consumption which we have considered inour model. This is even less so at a more general level, when taking into account the energy effort for producing and disposing of light bulbs. The recycling of energy saving systems is putting an extra burden on their overall energy balance, therby seriously questioning their high expectations.

A crisis in leadership in Japan’s nuclear industry.

By: Nicholas Newman

Failing to make the right decision is easy to do. Regrettably, despite years of technological progress and experience, governments and energy companies continue to make such mistakes. Nevertheless, due to the increasing scale of investment and environmental hazards that the industry faces, the world energy leadership needs to do better than it has in the past.

It is clear those events at Japan’s Fukushima Daiichi nuclear plant have as much to do with bad decision-making by the country’s energy leadership as it has to do with the massive sea quake that caused a tidal wave to hit the doomed nuclear power station. Examining the factors that contributed to the poor decision-making that led to disaster in Japan last year, one comes to the conclusion that the events transpired could have been substantially mitigated or even avoided by the country’s energy leadership.

Here are some of the reasons that contributed to Japan’s unpreparedness for such a nuclear crisis and surprising negligence of nuclear power plant safety standards. These factors that contributed to the Fukushima incident range from internee sign fighting between the country’s government agencies (Ministry of Environment and its two regulatory agencies the Nuclear Safety Commission and Nuclear and Industrial Safety Agency) as well as the plant’s owners Tokyo Electric Power Co. Nor did it help that the power plant’s operator had been found to have ignored safety advice on several occasion from both domestic and international nuclear professionals such as the International Atomic Energy Agency (IAEA).

It is clear from government reports that the leaderships of various stakeholders in the industry, including Japan’s regulatory agencies and nuclear power station operator TEPCO made serious errors which would have been avoided if the organisational culture was more accountable and open to inspection to not only Japan’s voters, but also the international community at large.

For instance, there are several documented examples of the national regulatory agencies ignoring the advice of such world agencies such as the IAEA. Reports suggest that the regulatory system was suffering from turf wars and intra-agency rivalries between regulatory agencies and departments of government ministries.

Nor did it help that TEPCO falsified safety records and ignored the advice given to it by both the domestic regulators and the International energy agency revealed in a report by Japan’s Independent Investigation Commission. In this report, it was revealed that Japanese electric power companies had since 1980, been unwilling to cooperate with the IAEA ‘s operational safety review of the country’s power plants. This review known as the Operational Safety Review Team (OSART), is where a team of experts conduct an in-depth review of operational safety performance at a nuclear power plant by checking the factors affecting safety management and personal performance.

In 1992, this operational safety review of Fukushima made a number of recommendations which Tokyo Electric Power Co, subsequently dismissed. In 2002, it was revealed that TEPCO had falsified 29 cases of safety repair records regarding cracks found at several of its nuclear reactors, including those at Fukushima Daiichi in the late 1980s and 90s. Despite this, the power company declined the offer by the IAEA to institute a fact-finding process to improve safety at the plant concerned. It was announced by the Chief Executive at TEPCO, that the proposed regulations were unrealistically strict and not in accordance with actual operational requirements.

Nor did it help that the entire nuclear community of the country was suffering from isolationist and secrecy tendencies, which were not helped by delusions that the country’s nuclear power sector was the best regulated, most advanced and managed industry in the world. The perception amongst many Japanese nuclear professionals was there was no need for Japan to learn from the rest of the world. In a sense Japan’s nuclear community was suffering from classic Galapagos Island syndrome symptoms.

Much to the surprise of these professionals the events at Fukushima were a wake-up call; it became clear from various investigations that Japan’s nuclear power sector was rotten to the core. It became clear that the industry was totally unprepared for the crisis when it occurred and was not able to provide solutions to such a crisis. It did not help that many of those civil servants working in nuclear regulation and safety management, did not have the opportunity to develop long-term expertise in the subject, because of the practice of regularly rotating civil servants to other government ministries. In addition, it did not help that findings found that the regulators were not truly independent of the power companies they were supervising.

Unfortunately, breaking out of the Galapagos syndrome for Japan’s nuclear sector is going to prove a hard task. Japan will need the help of the international community to create a new decision making energy leadership culture so that it equips it with the tools to avoid such complacency and a repeat of such disastrous mistakes. There are plans to establish a new, powerful nuclear safety agency this summer that will replace the old agencies and ministerial departments. Unfortunately, many of the new staff for this new agency will come from the failed organisations that contributed to Japan’s nuclear disaster.

However, perhaps the best way to revolutionise Japan’s nuclear community is if it imports new leadership and experts from abroad, until Japan has trained up the necessary recruits in the standards of the world nuclear community. Unfortunately, foreign CEO’s leading Japanese companies are rare and tend only to stay a short time due to inherent organisational resistance to change. In addition, Japan, the country finds very difficult to change its organisational culture, given the extremely conservative, traditional nature of its society. This is despite its appearance as one of the world’s most technologically advanced nations. This can be seen by its failure to implement the radical changes required to break the country out of economic stagnation in recent years.

Japan’s government wants to restart two nuclear plants to avert summer power shortages this summer, but public skepticism of nuclear safety and the industry remains high. Before March 2011, Japan depended for 30% of its power from nuclear power plants. Unless Japan can make the necessary changes it is unlikely there will be public support for the country’s nuclear power stations to start operating again. Instead the country’s energy leadership will have to continue to depend on expensive renewables and imports of gas from Australia to fuel its power sector in order to maintain energy security.