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Sweden: Nuclear is Back on the Table

Professor Ferdinand E. Banks
ferdinand.banks@telia.com
February 11th, 2009

Vladimir Lenin ostensibly believed that Soviet power plus electricity would create a heaven on earth. Analogously, the implicit assumption in Sweden after the Social Democrats assumed power was that something called the ‘Swedish welfare state’ would feature social democracy plus electricity. A low level statistical analysis, together with a simple algebraic demonstration, makes it clear that in terms of reliability, cost and the quantity of electricity delivered, the Swedish nuclear sector might have been the most efficient in the world before the curse of (electric) deregulation arrived.

For some obscure reason, in l978 all the major political parties in Sweden agreed that the growing controversy over the future of nuclear energy should be settled by a national referendum. The electorate was subsequently asked to choose between nuclear acceptance, or the more-or-less immediate closing of as many nuclear facilities as possible, or a gradual phase-out that was to be complete by 2010. Confronted by a whirlwind of neurotic fictions launched by a technophobic nuclear opposition, the latter option was selected. Although not fully understood by most Swedes even now, a key factor in that pseudo-scientific travesty was an assumption that the enviable and growing prosperity of Sweden could be maintained even if the country’s nuclear assets were liquidated. In other words, the choice between nuclear energy and ‘something-else’ was reduced to a matter of taste, and to add insult to injury, the country’s energy assets were pictured by many politicians as having little or nothing to do with the macro-economy, although in point of truth they have everything to do with it.

Notice the observation “to be complete by 2010”. This obviously was impossible, which even the anti-nuclear booster club accepted, and so the intention became to scrap nuclear assets when they reached the end of their productive life. This of course meant decades, and so to show that they were serious – and also to recruit at least some of the members of that club to the social democratic party – the reactors at Barsebåck (Malmö) were taken out of operation between 1999 and 2005. I discuss the economics of that closure in my energy economics textbook (2007), but environmentally, according to Carl Hamilton (2009), it meant that if those two comparatively small reactors were still in operation, this part of the world would have avoided about 11.5 million tonnes/year of greenhouse gas emissions. Needless to say, it would also have meant less expensive electricity in Sweden, and perhaps in adjacent countries.

It is due to an intensified concern for the economic future that the irrational nuclear ‘downsizing’ in Sweden has at last been at least temporarily halted. The key departure of course came earlier, and it involved upgrading the ten remaining reactors so that they could produce approximately the same electric energy (in kilowatt-hours per time period) as the original twelve reactors, which amounts to nearly 47 percent of the total electric energy generated in Sweden. Now the intention is to maintain that output of energy, even if it means that new capacity must be constructed. The logic here is straightforward, and cannot be altered by the resolute ignoring or downgrading of mainstream economic history: a high electric intensity for firms, combined with a high rate of industrial investment and the technological skill created by a modern educational system, will lead to a high productivity for large and small businesses. This in turn results in a steady increase in employment, real incomes, and the most important ingredients of social security (such as pensions and comprehensive health care).

In my lectures I use the last part of the previous paragraph to argue that if, ex-post, there was the increase in employment, real incomes and welfare in its broadest sense, that was promised ex-ante, then it is also true that the so-called subsidies that nuclear in this country is supposed to have received is a fiction. Put another way, taxpayers as a group have gained rather than lost as a result of financing the Swedish nuclear inventory.

To a considerable extent, the ill-founded assumption that Sweden without nuclear can be as prosperous as it has been with nuclear is now passé, which is why a majority of Swedish voters are no longer hostile to nuclear. With bad economic news rolling in from every corner of the world, and filling small as well as large newspapers, the voters of this country are losing their famous ability to tolerate economic nonsense.

Notice the expression “losing their capacity”. They have not completely lost it yet, because the Swedish government recently appointed a gentleman with a PhD in physics to the highest position in the energy bureaucracy. His exact goals – other than to secure for himself a highly paid non-job in Brussels or anywhere else between the southern tip of Sweden and the Capetown naval yard – are unclear, but perhaps he or one of his subordinates have been talking to Ms Mona Sahlin, who on the basis of present polls, seems to have an excellent chance to become the prime minister of this country after the next election.

Ms Sahlin has claimed that the production of renewable electricity – or ‘green electricity’ as it is called by environmentalists – has increased by 9 Twh/year in the period after the closing of the two reactors at Bårsebåck (Malmö) took place. As is the case in every country on the face of the earth, this is another resort to a blatant untruth in order to conceal the kind of stupidity that textbooks on economics (and in particular game theory) insist cannot take place in a community inhabited by rational human beings.

The situation with nuclear has played out exactly the way that I predicted that it would in one of my earlier books, with one exception. At a large international conference in Canberra (Australia) many years ago, after an American gentleman put in a good word for the breeder reactor, I did not talk to a single person who thought that he was in his right mind. Now of course, dozens or maybe even hundreds of breeder or fast-spectrum reactors are right around the corner, and if the kind of intelligence which believes that orthodox fission reactors can be replaced by wind and solar are eventually in charge of managing those reactors and their outputs of plutonium, then we are in serious trouble.

REFERENCES

Banks, Ferdinand E. (2007). The Political Economy of World Energy: An Introductory< Textbook. Singapore. London and New York: World Scientific.

Hamilton, Carl B. (2009) ‘Sahlin slarvar med sanningen om Barsebåck’. Svenska Dagbladet (22 January).



Professor Ferdinand E. Banks
February 11th, 2009
ferdinand.banks@telia.com




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