Thursday, June 9, 2011

Small Nuclear Reactors are Needed for Charter Cities of the Future

What's the difference between North Korea and South Korea? How about Hati and the Dominican Republic? And what's the major difference between China last century and today? Stanford economist Paul Romer thinks he has an answer:

Bad Rules versus Good Rules

Bad laws and policies (rules) prevent win-win situations. They are almost ubiquitous in all nations with stunted economic growth. One of Dr. Romer's examples is electricity - many people in the world are prevented from getting hooked up with electricity due to bad rules that govern the electric grid, the buying, and selling of power. It's not hard to imagine how this can happen. The "old fashioned" way of structuring an electric grid is generally a regulated monopoly (USA) or a state-run operation (UK). In Dr. Romer's example, when the price was set too low for the company to make a profit, they had no incentive to expand the infrastructure, and those paying the price had no incentive to lobby for something different.

Some places have been testing the waters with a different set of rules in the electricity market, a common structure today is a so-called "Independent System Operator" that runs a market which others feed into and participate in. In the future, small investors could gain access to this market through the smart grid. Innovations in real time pricing could allow a system of rules that lets everyone participate in the management of our power distribution and production. Unfortunately, history has examples of bad rules in the electricity market as well.

The nuclear industry in the United States is no stranger to the consequences of bad rules. There are a host of reasons for the slowdown in nuclear plant builds in the USA at the end of the 70s, but the most powerful one is that the investors couldn't count on the rules not changing. As the regulatory process was changing quickly, there was no guarantee that the design you commit to at the start would be good enough by its finish. No decision was final, and everything was subject to a change later, political or otherwise.

So what's the deal with charter cities?

You start with a Charter. It specifies the rules, and these have to be good enough to attract investment in the new city. The model has to have choice built into it, which is why it is being proposed for uninhabited land. Some amount of foreign, or international, administration is utilized and ease of doing business is maximized. Hong Kong is said to be a historical example of this, and it had tremendous influence on the rest of the nation and the world. It offers opportunities to the poor by allowing them a way to hurtle the numerous institutional problems that are holding them back. This is what Dr. Romer laid out in his 2009 TED talk.

Since then, the idea has gained traction, and the Honduran congress has passed a constitutional amendment to establish just such a charter city (a "special development region", as of yet agnostic to location) with a stunning 124-1 vote, twice. This will give people in Honduras a choice. Many people who would have otherwise migrated to the United States (as 10s of 1000s do now), will instead choose to move to this new city that has the same kinds of opportunities. He just delivered another TED talk about this:

Supposedly, you need around 1,000 km2 for such a city (you may need 100 km2 just for the airport). Honduras supposedly has plenty of empty space that can be a blank slate for such a city.

But the idea is not without its problems. We all understand that cities are higher density and can be more eco-friendly because of that, but what about the invisible supply chain for a city? Where are you going to get all the materials, food, electricity, and all other inputs that must come from the land to supply the city? Plus, when we consider the nations that prospered because they had good rules, life got better and people inevitably used more electricity. Much more. Where will all that additional electricity come from? And how can we possibly get it without destroying more beautiful land like we set aside for the city itself? How do we keep a new city from destroying an environment many times its size?

Just imagine a dozen charter cities blooming around the world in the next 2 decades. Imagine the millions, maybe billions, of people they could lift out of poverty. Maybe we can even imagine powering these cities by a clean energy source that destroys no more land.

Nuclear Power + Rising Economies = The Way to Go

The entire nation of Honduras has a population of about 8 million and consumes on average about 750 MW of electricity. Imagine a new city with 1 million people. If they consume at the same intensity as Hondurans do now, that would be 100 MW. If they consume at the same intensity as people in the United States, we are looking at 1,500 MW average.

Consider the Flexblue - a small nuclear reactor design in development by a few French companies. This one could see market in the coming decade like many small reactor designs, but this particular one would be underwater. The modules would produce 50 MW to 250 MW of electricity each and could be grouped together. They would be 60 m to 100 m underwater "a few km" offshore. Think about that, this image shows a generating station sufficient to power the city we're talking about.

What would this look like? I tried to piece this together somewhat true to scale, and this is what I get:

Actually, I had to go a little further out to get ~200 ft depth since this area seems to have a particularly shallow coastline. The transmission also presents no particular problem, as we use undersea cables for just this type of thing today. What about the exclusion zone? Done. Emergency planning radius? A 10 mile radius for this extends about as far as the coastline in my picture. Also consider the inherent safety available from the abundant coolant source of the ocean. Even should a Fukushima-like accident occur there, the Iodine, Cesium, and Strontium would spread through the ocean, and not through the air. Where does Honduras get its electricity from now? It's 36% from Hydroelectric, 3% from biomass, and 60% from conventional thermal plants.

Finally, why would , or why would this not, work? Rules. It's no mystery that such charter cities would be powered, initially at least, by foreign direct investment. It's likely that the same would apply for a power source. Like every piece of infrastructure, no one will invest if there are not good reliable rules for the project. Although this goes for everything related to the charter city project, good rules for nuclear power development and considerably harder to come by in this world.