By OGJ editors
HOUSTON, Sept. 21 -- Nuclear power plays a key role in protecting Japan's economy from the volatile crude oil price spikes, but too heavy of a reliance on nuclear power would raise electric costs to the point of diminishing returns, Rice University's Institute for Public Policy reported in a new study.
"The study clearly demonstrates that although nuclear power can reduce a nation's exposure to international oil market fluctuations, diversity of fuel choice in the electricity sector is important to a nation's energy security," said the study's principal author, Kenneth Medlock III, senior research fellow in energy studies at the Baker Institute and a visiting economics professor.
The study examined the possible economic impact of an oil price shock. In the absence of nuclear power, the cumulative impact of a 25% increase in oil prices could result in a loss of up to $18.2 billion in gross domestic product.
The statistics do not account for nuclear power's controversial operating issues such as the problem of waste disposal or potentials costs of nuclear accidents, the study noted.
Fuel diversity is important to keeping electricity prices low and maintaining system stability, the study concluded. If all electricity in Japan were to be shifted to nuclear power, then electric prices would increase above current levels because of the costs of managing peak loads without peaking facilities—typically fired by natural gas or fuel oil.
Moreover, absent alternative fuel choices for generating electricity, the costs of the recently staged shutdown of nuclear reactors in Japan would have been exceedingly high, the report said.
