Carbon prices are up due to nuke disaster in Japan

This entry was posted by Wednesday, 16 March, 2011
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Japan’s devastating tsunami and its subsequent nuclear emergency has sent carbon prices to their highest level in two years, in response to higher natural gas prices and Germany’s decision to close nuclear reactors for testing.

The price of the benchmark EU allowance [EUA] contract hit €17.49 today, up 10.9% from its €15.77 close on Thursday, the day before the earthquake hit Japan.

It closed at €17.32, up 4.3% on the day.

Carbon permits under the EU’s emissions trading scheme, which Switzerland is set to join, rose 5.5 percent to close at €16.60 a tonne on the ICE Futures Europe exchange in London.

The Plans to extend the operating life of the Germany’s nuclear plants would be suspended for at least three months, pending an inquiry into their safety. German government has decided to halt its seven oldest nuclear reactors- increasing demand for replacement power from fossil fuels.

Angela Merkel, German Chancellor, decided to suspend the plants for safety checks following concerns about meltdown of nuclear power in Japan, which could remove about 5 Gigawatts of capacity from the power market.

A German government decision to cancel nuclear extensions would result in an additional demand for 700 million tonnes of carbon through 2020. Nuclear energy accounts for roughly 30 percent of Europe’s energy mix, rising to as high as 80 percent in France.

Nathalie Kosciusko- Morizet, French environmental minister said,

Events in Japan were unlikely to change her country’s reliance on nuclear energy – we can’t switch renewable over night! We need nuclear energy for the future; the dependence on it has risen to as high as 80 percent.

Spanish and Italian ministers made similar pronouncements, while separately, EU energy commissioner “Gunther Oettinger” said events in Japan were likely to force a fundamental rethink of energy policy across the globe.

Meanwhile Switzerland has halted plans to build new reactors and the halted approvals for three nuclear plants are ahead for a safety review.

The US, Senator Joe Lieberman said,

US should “put the brakes on” new nuclear power stations, until the consequences from Japan become clearer.

Japanese carbon emissions are set to rise in the wake of last week’s catastrophe, which caused severe damage to nuclear facilities, and will put the country further away from its emissions reduction target under the Kyoto Protocol.

A Deutsche Bank analyst said,

“We think Japan is more likely to make up any further shortfall in its Kyoto requirements arising out of this disaster with purchases of AAUs.

Based on 9.7GW of nuclear capacity being taken out of Japan’s energy mix for a year, the country’s carbon emissions may raise to 70Mt if that capacity remains offline until the end of next year.

Reference: [Environmental Finance], [Bloomberg ]and [EUobserver]

Click here to see the video- on “Nuclear debate heats up in Germany



Related Terms in the Glossary:

Eu Allowance (EUA)

Carbon Price

Carbon Market

Emission Trading Scheme

14 Responses to “Carbon prices are up due to nuke disaster in Japan”

  1. Arj Barkera

    The country’s focus remains the immediate recovery from the March 11 tsunami and the containment of the Fukushima incident. But more strategic shifts in energy policy are also emerging. In the April 2011 supplementary budget to ease post-quake energy shortages, an extra c$US0.9 billion was allocated for electricity demand reduction measures and c$US1.7 billion to tackle fuel supply shortages. In addition, the preferential rates for surplus solar power produced by businesses and schools have been raised by 67 per cent from April 1 and the government plans to mandate the power sector to buy renewables at higher feed-in tariff from April 2012. Longer term, the Fukushima crisis has cast doubts over Japan’s ability to cut emissions by 25 per cent from 1990 levels by 2020 if nuclear power is curbed; pre-crisis the government had plans for 9GW of nuclear over the next decade. We expect a more sustained focus on demand reduction and solar expansion.

  2. orione

    A poll published Wednesday by the Allensbach Institute, an independent polling research center, showed that 31 percent of respondents wanted the nuclear plants to be closed within the next five years, while 37 percent wanted them closed within 10 years and 19 percent in 20 years or later. More than 13 percent had no opinion.

  3. erica

    We’ve got to go on building new nuclear plants,” he said. “We need to get away from foreign oil, that’s the most important thing.”

    He conceded that California’s two nuclear plants might not be prepared to withstand an earthquake of the magnitude that struck Japan last month. “Our plants are not built for 9.0 earthquakes,” he said. “That doesn’t mean you should take them out, but you should learn from it.”

    “When a truck loses brakes, you don’t go out of the trucking business, but you look at how to improve those brakes.” Arnold Schwarzenegger

  4. eginald Thomase

    German Economy Minister Rainer Bruederle said Friday that a switch from nuclear power to alternative forms of energy could cost Europe’s top economy up to two billion euros ($2.9 billion) per year.

  5. ukraine

    Nuclear power remains among the world’s best sources of baseload, largely emission-free electricity.

    It can and should continue to play a major role in efforts to provide reliable and virtually carbon-free power.

    In the final analysis, a future that contemplates nuclear as a major source of baseload generation complemented by small-scale and geographically dispersed renewables still holds much promise for electric power generation.

  6. urika

    ” The science on radiation tells us that the effects of Fukushima are serious but so far much less so than some of the more hyperbolic media coverage might suggest. The power plant operator, Tokyo Electric Power Co., has been releasing enormous quantities of radioactive water into the sea, for example. It sounds scary, but a member of the public would have to eat seaweed and seafood harvested just one mile from the discharge pipe for a year to receive an effective dose of 0.6 millisieverts. To put this in context, every American receives on average 3 millisieverts each year from natural background radiation, and a hundred times more than this in some naturally radioactive areas. As for the Tokyo tap water that was declared unsafe for babies, the highest measured levels of radioactivity were 210 becquerels per liter, less than a quarter of the European legal limit of 1,000 becquerels per liter. Those leaving Tokyo because of this threat will have received more radiation on the airplane flight out than if they had been more rational and stayed put.”
    This LA times blog argues that the only alternative is nuclear.,0,3424093.story

  7. eugenia

    Most experts agree that Japan would be hard pressed to close all of its 54 nuclear reactors anytime soon, especially given that these plants provide over a third of the nation’s electricity supply and 11 percent of its total energy needs. Japan relies so much on nuclear power because it has so few other domestic sources of energy to draw upon. According to the U.S. Department of Energy, Japan is only 16 percent energy self-sufficient, and much of this comes from its now-wounded nuclear power program.

    Despite producing only trifling amounts of oil domestically from fields off its west coast, Japan is the third largest oil consumer in the world behind the U.S. and China, as well as the third largest net importer of crude oil. Imported oil accounts for some 45 percent of Japan’s energy needs. Besides bringing in a lot of oil, Japan is the world’s largest importer of both coal and liquefied natural gas. Against this backdrop of imported fossil fuels, it’s no surprise that Japan has embraced nuclear power; worldwide, only the U.S. and France produce more nuclear energy.

    Factoring in that it would take decades to ramp up capacity on alternative renewable energy sources – right now hydropower accounts for three percent of Japanese energy usage and other renewable sources like solar and wind only one percent – and that Japan must import just about all its fossil fuels, it becomes obvious that the country will need to rely on nuclear power for some time to come, despite the risks.

    “Supplying the same amount of electricity by oil, for example, would increase oil imports by about 62 million metric tons per year, or about 1.25 million barrels per day,” says Toufiq Siddiqi, a researcher with the nonprofit East-West Institute. He adds that at the current price of oil per barrel (roughly $100), switching out nuclear for oil would cost Japan upwards of $46 billion per year. “Further, it would take almost a decade to build enough new oil, coal or natural gas-fired power plants to provide the equivalent amount of electricity, and tens of billions of dollars per year would be required to do so,” he concludes.

    In the short term, the easiest way for Japan to make up for its reduced nuclear output is by importing more natural gas and other fossil fuels, sending its carbon footprint in the wrong direction. What’s less clear is whether Japanese policymakers’ pre-existing plans to increase the country’s nuclear capacity – the stated goal is to generate half of Japan’s electricity via nuclear power within two decades as part of a larger effort to trim carbon dioxide emissions – will still be followed following the Fukushima accidents.

    Read more:

  8. eerie

    The reactors suffered, in effect, a one-two punch that hadn’t really been expected. Clearly, given that an earthquake might well cause a tsunami, the diesel generators should have been designed in a way that would not be affected by tsunami waves. This is very likely a broader issue, that people have not adequately thought through the possibility of multiple traumas that could be caused by the same initiating event (e.g., a blackout and a large object crashing into the diesel generator as a result of a tornado – one could imagine many such coupled events).

    This reinforces the view that whenever someone says there is less than a one-in-a-million chance of a complex system failing, there is more than a one-in-a-million chance they have made unjustified assumptions in their estimate.

  9. eginald Thomase


    TONY JONES: Why have you taken this decision to become an advocate for nuclear power in the light of such a disaster?

    GEORGE MONBIOT: Well, it’s a horrible, traumatic, extremely dangerous thing that’s happening in Fukushima and it’s devastating to the lives of many people living around there. But the extraordinary fact is that no-one has yet received what is believed by scientists to be a lethal dose of radiation. And what has happened is that that power station there has been hit by a force nine earthquake, a major tsunami. Those have exposed a horrendous legacy of corner-cutting, poor design and of course appalling siting on an earthquake zone and all sorts of horrible effects in terms of the necessity for evacuation and the spread of low-level radiation and the rest of it. It’s about the worst possible nuclear catastrophe that you could envisage and it rates very high on the scale of nuclear disasters. And yet even so, the extraordinary case remains that so far – touch wood, and let’s hope very much that this remains the case – no-one has yet received a lethal dose of radiation.

    And that has forced me, really, to challenge myself and to re-examine my preconceptions and to think, well, this is a nasty technology. I don’t like it at all. But if the result of the great switch-off of nuclear power in Japan, in Germany, possibly in China, possibly the US, possibly in the UK, many other countries in response to this disaster is to move more into coal burning, which already seems to be the case, then we’re talking about moving from a bad technology to a much, much worse one. And faced with a choice between those two options, it has to be nuclear.

    TONY JONES: Alright. We’ll come to the other possible alternatives shortly. But first of all, the Fukushima nuclear crisis is far from over. I mean, your initial optimism about no-one getting a fatal dose of radiation still may not be held up. So I’m wondering, did you jump too soon on this?

    GEORGE MONBIOT: Well, of course, things might well change and it may be that some people do receive a lethal dose of radiation, and of course, that would be a terrible and a horrible thing. But, please, let’s look at what will happen if we switch to coal. In fact, countries are switching to coal at the moment. In China alone, 2,300 people a year die in coal mining accidents and tens of thousands, possibly hundreds of thousands die as a result of lung diseases contracted in coal mining. And that’s to say nothing of the very great impacts. We’re talking about many, many thousands, tens of thousands perhaps of people dying as a result of lung diseases contracted through air pollution caused by coal burning. And of course it’s to say nothing of the far greater impact still of climate change.

    Now while of course I put renewables way at the top of my list and way above nuclear power and that’s what I want to see being deployed, what is being deployed and what will be deployed if there’s this global nuclear shutdown, this is the reality we face, is a switch to coal and that will cause many more fatalities even than the horrible situation we are seeing in Japan at the moment.

    TONY JONES: Alright. Let me just be a devil’s advocate for a while and go through some of the other key arguments against nuclear power. One of the strongest arguments is an economic one that the nuclear power industry privatises its profits while socialising its costs, and one obvious example of that is the huge cost of decommissioning plants. And in particular you’ve got the Sellafield nuclear plant in Britain which is going to cost 70 billion pounds to decommission. That’s taxpayers have to pick up the bill there. So, first of all, take up the economic argument. Can there be a serious economic argument for nuclear power when those hidden costs are in every reactor?

    GEORGE MONBIOT: Look, it’s an absolute disgrace. I mean, the failure to prepare for decommissioning, either economically or technically, is absolutely shocking, and the nuclear industry, we’ll they’re a bunch of corner-cutting scumbags. I don’t have any sympathy for them at all. All I’m trying to do here is steer a course between a series of bad options, really. But in terms of the full costs of nuclear power, it probably comes out, most estimates suggest somewhere around four pence per kilowatt hour of electricity generated, which is more expensive than fossil fuel, probably comparable, slightly more expensive than large-scale wind, but cheaper than some other renewable technologies. It comes sort of about two thirds of the way up the scale, as far as we can see. It’s not cheap, it’s not wildly expensive either, but it is of course a low-carbon source of electricity.

    Now if you were to look at the decommissioning costs of coal burning, for example, you will find because they include climate change and the enormous costs of adaptation to climate change, to the carbon dioxide produced by coal as a by-product of that industry, you will find they dwarf those of nuclear power by many, many times. And I just cannot emphasise this enough: that if we’re switching from nuclear to coal, as many governments, like Germany’s, are doing right now, then that is a disastrous move which will incur far greater costs, environmental, humanitarian and economic, upon the world.

    TONY JONES: I’m just going to stick with the costs of nuclear power for a moment, because as we know from the experience in the United States, I mean, tremendous subsidies and loan guarantees, federal loan guarantees have been put in to make sure these nuclear power stations are actually built. They get much higher subsidies, they have in the past, than renewable energies. In Asia, economists estimate that the 110 new nuclear reactors that are going to be built in the next 10 to 20 years are going to be subsidised to the tune of $180 billion. I mean, if those kind of subsidies were put into renewable energies, wouldn’t that create a different playing field?

    GEORGE MONBIOT: Well I couldn’t agree more, and of course I would love to see that happening. But the situation right now – and I’m sorry to keep coming back to this, but this is a key point and it’s absolutely critical for environmentalists to grasp – is that we’re talking about a switch not from nuclear to renewables. We’re talking about a switch from nuclear to coal. And coal is subsidised by all of us in the form of the costs that we must carry for the climate change and the polluting effects, not to mention the deaths and injuries that it inflicts.

    Now, I completely agree: I would love to see that transfer of subsidy from nuclear to renewables, but there’s a limit to how far we can roll out renewables if we’re also going to have to replace nuclear as well as replacing fossil fuels. We’re talking about a steep hill to climb already at the best of times. So, in other words, we’re talking about renewables replacing fossil fuel electricity production, replacing liquid transport fuel and replacing heating fuels, gas and oil, in people’s homes. That’s certainly what we’re calling for right across Europe as an environmental movement.

    If they’re also to replace nuclear power and planned nuclear power, well that makes it a very tall order and it makes our task a lot tougher. And I think our priority has got to be to kick fossil fuels out of the picture and only then do we start to look at whether renewables can also remove the need for nuclear power. Because it’s just – it’s all a matter of getting our priorities in the right scale. I don’t like nuclear power. I think it’s a horrible technology, but I recognise that there’s some far more horrible technologies which will and are replacing it as a result of the nuclear shutdown.

    TONY JONES: Now, there’s argument in this country that we certainly need a transitional technology to replace coal, particularly dirty, brown coal-fired power stations and deliver baseload power at lower emissions. The best option that’s been come up with here by economists and by the Government is a switch to natural gas-fired power. Now that does deliver electricity at far lower emissions than coal. Why isn’t that the alternative, the transitional alternative the Europeans are looking at?

    GEORGE MONBIOT: Well, it’s definitely lower than coal. It’s far, far higher than either nuclear or renewables, and it is in fact far too high if we’re to achieve anything like the climate change cuts, the carbon cuts required to prevent very dangerous levels indeed of climate change – two, three, four degrees of global warming or more. We cannot afford to switch from coal to gas. We have to switch from coal to a much lower emitting technology and that means either renewables, which come …

    TONY JONES: Yes, but George Monbiot, just to – if I could just interrupt you there. I mean, you just made the case that the Europeans are going from – well, you believe they’re going to go from nuclear to coal. I mean, why not go to gas as a transitional measure, because the industry claims 70 per cent lower greenhouse emissions than existing coal-fired power stations, brown coal-fired power stations? That is a big reduction. That’s bigger than many of the targets that are envisaged by most countries.

    GEORGE MONBIOT: Sure. Yeah, but it’s still many times the emissions produced by nuclear power. So, to go from nuclear to gas rather than from nuclear to coal does not solve the problem. It means you’re going from – in terms of climate change, from a low-emitting technology to a high-emitting one as opposed to an extremely high-emitting one, going from nuclear to gas rather than nuclear to coal. That’s not solving the problem, that’s going in quite the opposite direction. It’s actually increasing the extent of the climate change problem, but not by as much as it would be if you switched to coal.

    TONY JONES: Except now from the Japanese case we see very clearly, although it was a disaster driven by a tsunami which is quite unusual, but we see the dangers of siting nuclear reactors anywhere near earthquake zones. And of course, both in Indonesia and in China, which are planning to build many more nuclear reactors, there are serious earthquake zones and issues like that are going to arise. And I’m wondering, why do you trust the Chinese and the Indonesians, for example, to do a better job than the Japanese, who have a high level of technical expertise?

    GEORGE MONBIOT: Hey, look, I don’t trust anyone when it comes to large-scale energy production of any kind, and I think the only safeguard is total transparency, everything to be above board, things to be very rigorously inspected indeed and the precautionary principle to be applied. And, yes, you’re quite right: we should not be building nuclear reactors in earthquake zones.

    TONY JONES: But that is the serious problem, because there are nuclear reactors built in earthquake zones in the United States. There are proposals to build them in earthquake zones in China and Indonesia, and yet still, I would imagine, you’re arguing those reactors should go ahead.

    GEORGE MONBIOT: Well, it depends what risk you’re looking at. I mean, if you’re looking at an area of serious seismicity, then that – obviously that’s a very stupid place to put a nuclear reactor. So, no, I would not support that decision. But China and the US for instance are very big places and there are plenty of places on those land masses which aren’t in earthquake zones and where – or certainly not anything resembling a major earthquake which could cause the sort of situation we’ve seen in Japan and I don’t see why they can’t talk about putting them there rather than in the earthquake zones.

    TONY JONES: OK, George Monbiot, as usual, you’ve given us plenty to think about. We thank you very much for taking the time to come and join us on Lateline tonight.

    GEORGE MONBIOT: Thank you, Tony.

  10. Hughes

    Thomson Reuters Point Carbon is predicting that during Germany’s nuclear moratorium, fossil fuels will be used to make up for the loss of nuclear energy, and their use may release an additional eight million tonnes of CO2 into the atmosphere. In addition, it said carbon prices could rise from about £4 per tonne (€5 per tonne) to about £30 per tonne (€35 per tonne) if the plants do not reopen.

  11. Hughes

    Germany decides to close eight of its old nuclear power plants.

  12. Aathmika

    A slide show of the Chernobyl revisited.

    If you imagine gasping and wheezing grand children, there is no price for carbon.

  13. sabna

    China has about 13 operational nuclear power reactors and is building more than 25, according to a report on the World Nuclear Association’s website quoted by Bloomberg.

    Read more:

  14. Pappu

    Deborah Yedlin, says, One industry’s disaster is another’s gift and nowhere is this more obvious than what has befallen the nuclear power world and how natural gas is perfectly poised to benefit.

    Somewhere, in the last several years, nuclear power had morphed from being an anathema to gradually being viewed as a clean, viable option in the mix of electricity generation alternatives.

    In my opinion CCS is going to gain traction.
    Read more:

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