Friday's 8.9 magnitude earthquake in Japan, which damaged four nuclear power plants, will make it harder for Minister of National Infrastructures Uzi Landau to realize his dream of a nuclear power plant in Israel, which is also in a seismic zone. The problem is not only the increased public awareness about safe risks of nuclear power plants, but also skyrocketing costs to build them.
Landau and other ministry officials have said that they want to build a nuclear power plant at Shivta in the Negev. Israel Electric Corporation (IEC) (TASE: ELEC.B22) is an enthusiastic supporter of the plan, and is financing a department of nuclear engineering at Ben Gurion University. The IEC workers committee has obtained a Ministry of Finance promise for the company to build the plant, known as Project E, involving two 1,200-megawatt power plants to generate 10% of Israel's electricity needs, in 2025-35.
The advantages of large nuclear power plants equal their disadvantages, however. It is easy to store the nuclear fuel, which can operate the plant for decades. There are no emissions of greenhouse gases, and nuclear power is considered a cleaner fuel than natural gas. The new fourth generation of reactors is intended to provide almost perfect solutions to the operational safety risks.
The biggest obstacle facing Israel's building of a nuclear power plant is the fact that Israel is not a signatory of the Non-Proliferation Treaty (NPT). The government believes that it is possible to get around this obstacle through diplomatic means, using the precedent set by India.
Another problem is the government's inability to realize strategic infrastructure projects on schedule. For example, just a few months ago, a collection of environmental organizations and local authorities blocked the construction of a terminal for the Tamar gas field at Dor Beach near Hadera. Without thorough reform of planning and building procedures, the government has no chance of passing a plan to build a nuclear power plant.
These obstacles, however, are likely to become insignificant in the face of spiraling costs to build nuclear power plants. Recent studies estimate the cost of building nuclear power plants at $3,600 per kilowatt installed, which translates into $4-5 billion for a 1,200-megawatt power station.
Friday's earthquake in Japan, which shut down several power plants, and has resulted in a crisis and possible core meltdown at the Fukushima Daiichi Nuclear Power Station, will undoubtedly further boost these costs to meet even tougher safety requirements.
It is doubtful that the Ministry of Finance will approve such an outlay that Landau or his heirs would need to realize the vision of a nuclear power plant, and the Ministry of Finance has the final word on energy affairs.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2011
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