The Uranium Banana Skin?
by Sam Kirtley05-17-2007
Recently, we wrote an article on the possible threats to the uranium bull
market and nuclear power in general. In this article we will explore what we
believe is the biggest single threat to the long term position of nuclear power
with uranium as a fuel.
What could be on the horizon?
We ask you to look upon this technology with a open mind, no matter what
prejudices or previous conclusion you may have arrived at. We were extremely
sceptical when this was first brought to our attention, but as professionals we
researched the topic thoroughly regardless of our opinions beforehand, and all
that we ask is for you to put your sceptical views aside if you have any, until
you have read this article in its entirety.
Taking the UK as an example, we are taking a careful interest in this power
source, as the UK is one of the areas which could stand to benefit from this
technology. Recently, a review from the UK government showed that there are now
types of wave power that are capable of producing electricity at a cost lower
than USD 0.10/kWh. This is the point at which electricity consumption becomes
Out of all the wave power devices, the "Salter" Duck is the most efficient,
generating electricity at under USD 0.05/kWh. The Duck was invented and
developed in the 1970's, by Professor Stephen Salter at the University of
Edinburgh and the device generates electricity by bobbing up and down with the
waves on the sea surface. Despite its ability to produce energy extremely
efficiently the idea was killed off mid way through the 1980's when a report
from the EU "miscalculated" the cost of electricity produced by a factor of ten!
They hugely overestimated capital cost, underestimating the reliability of
underwater cable s and ridiculously claiming that each Duck would cost the about
the same as the prototype had cost. Recently, the "error" has been uncovered and
the Salter Duck is getting more coverage and consideration.
Many view this "error" or "miscalculation" as a deliberate attempt to destroy
the Salter Duck's future as a source of electricity. Some believe that pressure
from the Nuclear Industry may have influenced the EU in its decision to report
that the Salter Duck was not economically viable as it would have seriously
threatened the existence of nuclear power, which at the time was an extremely
prominent emerging energy source. What does this tell us? Well it suggests that
people in the nuclear industry felt threatened by the possibilities of wave
power and that in itself adds credibility to the wave power idea. It also adds
to the argument that marine renewables are the biggest single threat to nuclear
power and the uranium bull market as the nuclear industry may have been forced
to act this way.
Let us explain in a bit more detail how the Salter Duck actually works. The
Salter Duck works by absorbing 90% of the energy from incoming waves and leaving
a calmer sea behind the cam. The nodding motion of cam operated pistons then
compress hydraulic oil and once this pressure has built up, the pressurised oil
is released through a hydraulic motor that in turn converts 90% of the captured
power to electricity.
Salter Duck Diagram
After campaigning long and hard to save their project, Professor Salter and
his team had to break up in early 1987. Salter wrote to the House of Lords
committee on renewable energy; "We must stop using grossly different assessment
methods in a rat race between technologies at widely differing stages of their
development. We must find a way of reporting accurate results to decision makers
and have decision makers with enough technical knowledge to spot data massage if
it occurs. I believe that this will be possible only if the control of renewable
energy projects is completely removed from nuclear influences." Once the
programme manager of Salter's team started predicting that they could get costs
down to 3.3p/kWh, an economically viable level, he was excluded from the next
important meeting of the key committee. He also claimed that 'They [the
government] basically killed the project because it was going to threaten the
expansion of the nuclear industry,'
Salter admits that the project was perhaps a bit ahead of its time. 'It's a
bit like somebody saying in 1905 that they had a really good idea for a huge
aircraft like the Airbus A380 when people didn't believe that biplanes would
fly." Regardless of the sentiment towards his project, Salter still remains
convinced of the potential from wave power, claiming that "you could run
continents with this sort of power". Salter says, "The long-term dream for the
Duck stream is that you run a long line of them from the Hebrides down to the
west coast of Ireland, with a break to allow shipping through, then you build
out from Cape Wrath [the most westerly point on the northern coast of Scotland],
past the Faroes and all the way to Iceland. You can use hydroelectrics and the
Icelandic geothermal to back that up when there aren't any waves. So you get a
very high-capacity factor of wave power coming into Scotland and Norway and
feeding on down into the rest of Europe. That's a really enormous resource.'
However another renewable marine resource is tidal power and this also has a
lot of potential. The Pentland Firth, which is the channel between Scotland and
Orkney is estimated to hold 50% of Europe's tidal power. Using tidal steam
turbines, many, including Salter himself think that we could get 10-20GW of
power out of the system. I realize that this figure does not mean a lot to a lot
of people so let us put this enormous amount of power into perspective.
This project could produce more energy than all the nuclear power stations in
the UK combined.
Does that sound like a threat to nuclear power? Could marine renewables be
the Uranium Banana Skin?
Personally we think that these two power sources do not have to smash into
each other head first, there should not be confrontation between them, but
co-operation. By working with each other, rather than against each other they
can both offer an extremely good solution to not only the UK's energy needs, but
global energy needs in general. A lot of the research in the article has been
focused on the UK and Europe, but that is simply because that is where the
studies have taken place and where the research has been carried out. We are
confident that with more research in different parts of world, similar
possibilities can be discovered.
We see nuclear energy as a "temporary" solution to the worlds energy needs.
When we say "temporary" we are talking perhaps up to 50 maybe even to 100 years.
Over this period we see nuclear energy surpassing fossil fuels and then
renewable energy sources taking over from there. Nuclear energy is not going to
be a long term solution for energy, if all the worlds electricity was produced
by nuclear power, then we would run out of uranium in five years! Whilst that
would be very beneficial to the uranium price and our uranium stocks it is not
helpful to humanity's energy needs.
Nuclear should be the transition energy, that takes us from fossil fuels to
the renewable energy sources. After all, living on nuclear energy is like living
on a set amount of capital, but living using renewable energy sources is like
living from an everlasting income. This of course would all change if someone
cracked either breeder reactors or nuclear fusion which will be discussed in a
So in conclusion, what it the uranium banana skin? The answer is that
eventually renewable energy, in particular marine renewables such as wave and
tidal power will be the banana skin that causes the nuclear industry to come to
its knees. The good news as far as uranium investors are concerned is that t his
will not begin to happen for at least another decade and nuclear energy is at
the very least, the immediate future whilst renewable energy is still being
developed and most importantly, put into action.