Rapidly growing renewable energy sources, a bountiful and inexpensive supply of natural gas and oil, and the aging population of existing nuclear power plants represent challenges that the industry must address moving forward.
The UK's planned Hinkley C nuclear plant is looking increasingly like a dead duck - or possibly parrot.
As the Financial Times reports today, Parliament's Public Accounts Committee has abandoned plans to examine the 'value of money' Hinkley C offers taxpayers - because no deal has been reached and none is expected before the general election in May.
In other words, all that bullish talk about Hinkley C launching Britain's 'nuclear renaissance' has melted away like a spring frost in the morning sun.
There is no deal on the table for the PAC to examine - indeed it's looking increasingly as if there may never be a deal, in spite of the astonishingly generous £30 billion support package on offer, at the expense of UK taxpayers and energy users.
Only last week Austria confirmed that it will launch a legal action against the Hinkley C support package, on the grounds that it constitutes illegal state aid. The action looks likely to succeed - and even if it doesn't, it's predicted to ensure at least four years of delay.
The nuclear slump has gone global!
But it's not just in the UK that the 'nuclear renaissance has hit the rocks. Global nuclear power capacity remained stagnant in 2014 according to the World Nuclear Association:
- Five new reactors began supplying electricity and three were permanently shut down.
- There are now 437 'operable' reactors compared with 435 reactors a year ago. Thus the number of reactors increased by two (0.5%) and nuclear generating capacity increased by 2.4 gigawatts (GW) or 0.6%. (For comparison, around 100 GW of solar and wind power capacity were built in 2014, up from 74 GW in 2013.)
- Construction started on just three reactors during 2014. A total of 70 reactors (74 GW) are under construction.
Thus a long-standing pattern of stagnation continues. In the two decades from 1995-2014, the number of power reactors leapt from 436 to 437.
Ten years ago, the rhetoric about a nuclear power renaissance was in full swing. In those ten years, the number of reactors has fallen from 443 to 437. But despite 20 years of stagnation, the World Nuclear Association remains upbeat. Its latest report, The World Nuclear Supply Chain: Outlook 2030, envisages the start-up of 266 new reactors by 2030.
The figure is implausible - it piles heroic assumptions upon heroic assumptions. If only the World Nuclear Association would take bets on its ridiculous projections, which are always proven to be wrong. Nuclear Energy Insider is a more sober and reflective in an end-of-year review published in December:
"As we embark on a new year, there are distinct challenges and opportunities on the horizon for the nuclear power industry. Many industry experts believe that technology like Small Nuclear Reactors (SMR) represent a strong future for nuclear.
"Yet, rapidly growing renewable energy sources, a bountiful and inexpensive supply of natural gas and oil, and the aging population of existing nuclear power plants represent challenges that the industry must address moving forward."
Nuclear power's ever shrinking share of global power generation
Steve Kidd, a nuclear consultant who worked for the World Nuclear Association for 17 years, is still more downbeat:
"Even with rapid nuclear growth in China, nuclear's share in world electricity is declining. The industry is doing little more than hoping that politicians and financiers eventually see sense and back huge nuclear building programmes. On current trends, this is looking more and more unlikely.
"The high and rising nuclear share in climate-friendly scenarios is false hope, with little in the real outlook giving them any substance. Far more likely is the situation posited in the World Nuclear Industry Status Report ...
"Although this report is produced by anti-nuclear activists, its picture of the current reactors gradually shutting down with numbers of new reactors failing to replace them has more than an element of truth given the recent trends."
Kidd proposes reducing nuclear costs by simplifying and standardising current reactor designs.
Meanwhile, as the International Energy Agency's World Economic Outlook 2014 report noted, nuclear growth will be "concentrated in markets where electricity is supplied at regulated prices, utilities have state backing or governments act to facilitate private investment."
Conversely, "nuclear power faces major challenges in competitive markets where there are significant market and regulatory risks, and public acceptance remains a critical issue worldwide."
Four countries supposedly driving a nuclear renaissance
Let's briefly consider countries where the number of power reactors might increase or decrease by ten or more over the next 15-20 years. Generally, it is striking how much uncertainty there is about the nuclear programs in these countries.
China is one of the few exceptions. China has 22 operable reactors, 27 reactors under construction and 64 planned. Significant, rapid growth can be expected unless China's nuclear program is derailed by a major accident or a serious act of sabotage or terrorism. But there are plenty of reasons to be concerned:
- numerous insiders have warned about inadequate nuclear safety standards in China;
- China's nuclear regulatory agency is not independent and it is understaffed;
- China's nuclear program lacks transparency, and there are repressive controls on the media and social media / the internet;
- the persecution of whistleblowers who have raised concerns about nuclear safety standards;
- China has the world's worst insurance and liability arrangements;
- most reactors under construction in China are being built in areas at risk from tsunamis according to an Oilprice.com analysis; and
- security risks (in particular those associated with China's fast reactor program) including inadequate laws and regulations for the physical security of materials and for mitigating insider threats; and
- risks arising from political instability, governance challenges, and "colossal corruption [at] every scale of state and society".
In the other three countries supposedly driving a nuclear renaissance - Russia, South Korea and India - growth is likely to be modest and slow.
Russia has 34 operating reactors and nine under construction. Just three reactors began operating in the past decade and the pattern of slow growth is likely to continue. As for Russia's ambitious nuclear export program, Steve Kidd noted in October 2014 that it "is reasonable to suggest that it is highly unlikely that Russia will succeed in carrying out even half of the projects in which it claims to be closely involved".
South Korea has 23 operating reactors, five under construction and eight planned. Earlier plans for rapid nuclear expansion in South Korea have been derailed by the Fukushima disaster, a major scandal over forged safety documents, and a hacking attack on Korea Hydro's computer network.
India has 21 operating reactors, six under construction and 22 planned. But India's nuclear program is in a "deep freeze" according to a November 2014 article in the Hindustan Times.
Likewise, India Today reported on January 8: "The Indian nuclear programme is on the brink of distress. For the past four years, no major tender has gone through - a period that was, ironically, supposed to mark the beginning of an Indian nuclear renaissance in the aftermath of the landmark India-US civil nuclear deal."
A November 2014 article in The Hindu newspaper notes that three factors have put a break on India's reactor-import plans: "the exorbitant price of French- and U.S.-origin reactors, the accident-liability issue, and grass-roots opposition to the planned multi-reactor complexes."
In addition, unresolved disagreements regarding safeguards and non-proliferation assurances are delaying US and European investment in India's nuclear program.
What about South Africa and Saudi Arabia?
Last year Saudi Araba announced plans to build 16 reactors by 2032. Already, the timeline has been pushed back from 2032 to 2040. As with any country embarking on a nuclear power program for the first time, Saudi Arabia faces daunting logistical and workforce issues.
Numerous nuclear supplier are lining up to supply Saudi Arabia's nuclear power program but political obstacles could easily emerge, not least because Saudi officials (and royalty) have repeatedly said that the Kingdom will build nuclear weapons if Iran's nuclear program is not constrained.
As for South Africa, its on-again off-again nuclear power program is on again with plans for 9.6 GW of nuclear capacity in addition to the two operating reactors at Koeberg. In 2007, state energy utility Eskom approved a plan for 20 GW of new nuclear capacity.
Areva's EPR and Westinghouse's AP1000 were short-listed and bids were submitted. But in 2008 Eskom announced that it would not proceed with either of the bids due to lack of finance.
Thus the latest plan for 9.6 GW of new nuclear capacity in South Africa is being treated with scepticism. As academic Professor Steve Thomas noted in a July 2014 report:
"Overall, a renewed call for tenders (or perhaps bilateral negotiations with a preferred bidder) is likely to produce the same result as 2008: a very high price for an unproven technology that will only be financeable if the South African public, either in the form of electricity consumers or as taxpayers, is prepared to give open ended guarantees."
Nuclear negawatts in North America
Now to briefly consider those countries where a significant decline of nuclear power is possible or likely over the next 15-20 years, patterns of stagnation or slow decline in North America and western Europe can safely be predicted.
Steve Kidd wrote in May 2014 that uranium demand (and nuclear power capacity) "will almost certainly fall in the key markets in Western Europe and North America" in the period to 2030.
The United States has 99 operable reactors. Five reactors are under construction, "with little prospect for more" according to Oilprice.com. Decisions to shut down just as many reactors have been taken in the past few years.
As the Financial Times noted last year, two decisions that really rattled the industry were the closures of Dominion Resources' Kewaunee plant in Wisconsin and Entergy's Vermont Yankee - both were operating and licensed to keep operating into the 2030s, but became uneconomic to keep in operation.
The US Energy Information Administration estimated in April 2014 that 10.8 GW of nuclear capacity - around 10% of total US nuclear capacity - could be shut down by the end of the decade.
The most that the US nuclear industry can hope for is stagnation underpinned by new legislative and regulatory measures favouring nuclear power along with multi-billion dollar government handouts.
And in the EU ...
In January 2014, the European Commission forecast that EU nuclear generating capacity of 131 GW in 2010 will decline to 97 GW in 2025, mirroring the situation in North America.
The UK is very much a case in point - the nuclear power industry there is scrambling just to stand still, and as noted above, looks increasingly likely to lose its Hinkley C mascot.
France is well known as Europe's most nuclear country, and that's likely to be the case for some time. But nuclear's share of its power generation could be set for a sharp decline.
The country's lower house of Parliament voted in October 2014 to cut nuclear's share of electricity generation from 75% to 50% by 2025, to cap nuclear capacity at 63.2 GW, and to pursue a renewables target of 40% by 2030 with various new measures to promote the growth of renewables. The Senate will vote on the legislation early this year.
However there will be many twists and turns in French energy policy. Energy Minister Segolène Royal said on January 13 that France should build a new generation of reactors, and she noted that the October 2014 energy transition bill did not include a 40-year age limit for power reactors as ecologists wanted.
Meanwhile in Germany, the government is systematically pursuing its policy of phasing out nuclear power by 2023. That said, nothing is certain: the nuclear phase-out policy of the social democrat / greens coalition government in the early 2000s was later overturned by a conservative government.
The Fukushima effect, and ageing reactors
Japan's 48 operable reactors are all shut down. A reasonable estimate is that three-quarters (36/48) of the reactors will restart in the coming years.
Before the Fukushima disaster, Tokyo planned to add another 15-20 reactors to the fleet of 55 giving a total of 70-75 reactors. Thus Japan's nuclear power industry will be around half the size it might have been if not for the Fukushima disaster.
Part of Japan's problem is that of ageing reactors, with many that it will simply be too expensive to bring up to current safety standards. The topic came into global focus in 2014 - and will remain in focus for decades to come with the average age of the world's power reactors now 29 years and steadily increasing.
Problems with ageing reactors include:
- an increased risk of accidents (and associated problems such as generally inadequate accident liability arrangements);
- an increased rate of unplanned reactors outages (at one point last year, less than half of the UK's nuclear capacity was available due to multiple outages);
- costly refurbishments;
- debates over appropriate safety standards for reactors designed decades ago; and
- the uncertainties and costs associated with reactor decommissioning and long-term nuclear waste management.
Greenpeace highlighted the problems associated with ageing reactors with the release of a detailed report last year, and emphasised the point by breaking into six ageing European nuclear plants on 5 March 2014.
The International Energy Agency (IEA) said in its World Energy Outlook 2014 report: "A wave of retirements of ageing nuclear reactors is approaching: almost 200 of the 434 reactors operating at the end of 2013 are retired in the period to 2040, with the vast majority in the European Union, the United States, Russia and Japan."
A growing problem - underfunded nuclear decommissioning
IEA chief economist Fatih Birol said: "Worldwide, we do not have much experience and I am afraid we are not well-prepared in terms of policies and funds which are devoted to decommissioning. A major concern for all of us is how we are going to deal with this massive surge in retirements in nuclear power plants."
The World Energy Outlook 2014 report estimates the cost of decommissioning reactors to be more than US$100 billion up to 2040. The IEA's head of power generation analysis, Marco Baroni, said that even excluding waste disposal costs, the final cost could be as much as twice as high as the $100 billion estimate, and that decommissioning costs per reactor can vary by a factor of four.
Baroni said the issue was not the decommissioning cost per reactor but "whether enough funds have been set aside to provide for it." Evidence of inadequate decommissioning funds is mounting.
To give just one example, Entergy estimates a cost of US$1.24 billion to decommission Vermont Yankee, but the company's decommissioning trust fund for the plant - US$ 670 million - is barely half that amount. As Michael Mariotte, President of the US Nuclear Information & Resource Service, noted in a recent article:
"Entergy, for example, has only about half the needed money in its decommissioning fund (and even so still found it cheaper to close the reactor than keep it running); repeat that across the country with multiple and larger reactors and the shortfalls could be stunning. Expect heated battles in the coming years as nuclear utilities try to push the costs of the decommissioning fund shortfalls onto ratepayers."
The nuclear industry has a simple solution to the problem of old reactors: new reactors. But the battles over ageing and decommissioned reactors - and the raiding of taxpayers' pockets to cover shortfalls - will make it that much more difficult to convince politicians and the public to support new reactors.
This article is reprinted from Nuclear Monitor #797, January 2015, with updates by The Ecologist.
Dr Jim Green is the national nuclear campaigner with Friends of the Earth Australia and editor of the Nuclear Monitor newsletter. Nuclear Monitor is published 20 times a year. It has been publishing deeply researched, often strongly critical articles on all aspects of the nuclear cycle since 1978. A must-read for all those who work on this issue!