HomeNewsReports of nuclear's death are greatly exaggerated

Reports of nuclear’s death are greatly exaggerated

ࢀ¢à¢€¢à¢€¢ BY TIM PROBERT ࢀ¢à¢€¢à¢€¢

As Germany, Italy and Switzerland turn their backs on atomic energy in the aftermath of the Fukushima accident, the much-vaunted ‘nuclear renaissance’ suddenly looks far-fetched. But the prospects for nuclear power are much better than the current climate suggests.

The nuclear power industry has taken a succession of blows in recent weeks. The accident at the Fukushima Daiichi plant in Japan, the second worst in history, is yet to be under full control and plant operator Tokyo Electric Power is teetering on the edge of bankruptcy, its share price having plummeted 85 per cent to all-time lows.

Last month, Germany’s coalition government decided that all 17 of the country’s nuclear power plants would be closed by 2022. Also in May, Switzerland agreed that no more nuclear reactors will be built once the current fleet reaches the end of their lifespan, with the newest remaining in operation until 2034.

Earlier this month, Italians voted overwhelmingly against a return to nuclear power in a national referendum, repealing legislation allowing the construction of new reactors. Of the 55 per cent of citizens who participated in the referendum, a crushing 94 per cent voted against the construction of any new plants.

In these countries, nuclear power looks as dead as the dodo, with politicians promising to embark on a renewables build-out programme instead. On the face of it, nuclear energy is once again the black sheep of the power industry. Yet Germany aside, the prospects for nuclear new build around the world before Fukushima were rather healthy. What has really changed? Not much at all, really.

Clearly, Fukushima has had a major impact in Japan. Pre-Fukushima, the Tokyo government had a target of 50 per cent of national power output to be generated by nuclear by 2030, up from 30 per cent now. Post-Fukushima, the government has suspended the new build programme and has pledged to draw up an entirely new energy plan. Industry minister Banri Kaieda, however, said this month that nuclear will remain a core energy source for Japan’s power generation.

The overseas prospects for Japan’s nuclear manufacturers like Toshiba and Hitachi are not good. Furthermore, GE, Hitachi’s global nuclear partner and designer of the ill-fated boiling water reactors at Fukushima, appears to have lost interest in nuclear power. It is investing heavily in solar photovoltaics and predicts it will be cheaper than nuclear within five years.

For the most part, however, any setbacks to the nuclear industry will be to the benefit of gas fired generation. At a recent press conference to launch its H Class turbine, Siemens was positively salivating at the prospect of the German phase-out increasing demand for its combined-cycle gas turbines (CCGT).

And while GE may be rather grandly boasting that its new FlexEfficiency CCGT will “revolutionize” the power sector by enabling more renewables, it is worth noting that its heralded 530 MW ‘integrated renewable combined-cycle’ plant in Turkey will comprise just 22 MW of wind and 50 MW of solar.

Many advanced economies now seem bent on committing themselves to a generation mix focused on ‘cheap’ gas. Whether this is a sensible long-term move is doubtful, but it certainly makes short-term financial sense in liberalized power markets in Europe, as gas prices have been squeezed by abundant and geopolitically secure sources.

But as Ansaldo Nucleare CEO Roberto Adinolfi said at this month’s Nuclear Power Europe in Milan, “Energy is a competitive factor in the overall economy and no government should forget to consider the consequences of its policies on the relative positioning of its economy. It would be nonsense to give a competitive advantage on energy cost to other countries on the basis that this is a price to be paid for privatization policies.”

It is for this reason, perhaps more than any other, that in its June report, ‘The future of nuclear energy: One step back, two steps forward’, the Economist Intelligence Unit (EIU) said the overriding global trend for nuclear power over the next decade will be one of growth, despite recent events.

While acknowledging that one of the main problems for nuclear power in the next decade remains financing large, variable nuclear construction costs in privatized markets, the EIU expects most nations to pursue nuclear technology essentially as before the Fukushima crisis.

The EIU has revised down its forecasts for capacity additions in the top ten nuclear nations ” USA, France, Japan, Russia, Germany, South Korea, Ukraine, Canada, UK and China ” but by 2020 it still expects a 27 per cent rise to 405 GW, compared to the figure for 2010.

The EIU states: “Much of the nuclear scepticism that other governments have signalled does not represent an erosion of enthusiasm for atomic power. Rather, it has more to do with showing tact in front of a jittery public.

“Nuclear energy is a response to long-term trends, and hence not easily abandoned or replaced. The need for new sources of electricity to power economic growth persists, and the promise of nuclear in bolstering energy security and reducing carbon emissions makes it an appealing option.”

Add to this the increasing interest in the sector shown by Eastern Europe and the Middle East and nuclear power looks far from dead. It could even be argued that nuclear is undergoing something of a renaissance.

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