On the face of it, the Fukushima nuclear power plant disaster in Japan, following the 9.0 magnitude Tohoku earthquake in 2011, should have dealt a fatal blow to nuclear power proponents who had long argued that it was a ‘safe’ form of clean energy.
The tsunami that destabilised the Japanese nuclear reactor shook not just the country but the entire global nuclear industry. Nuclear projects that were in the works were mothballed as many countries got cold feet about building new plants amid a public backlash.
Japan, a country that relies on nuclear energy for 30 per cent of its electricity needs, and is seen as a poster child for the global nuclear industry, mothballed 48 nuclear reactors in the aftermath of the crisis and took a hard look at its energy needs.
Although the accident caused no direct radiation- related casualties, it raised concerns over the safety of nuclear power plants and led to a drop in public acceptance, as well as to changes in energy policies in a limited number of countries, said the International Energy Agency (IEA) in a recent report.
“The near-term outlook for nuclear energy has been impacted in many countries by the Fukushima Daiichi nuclear power plant accident,” according to the IEA January report on nuclear energy.
“This, together with an economic crisis that has lowered demand in many countries and a financial crisis that is making financing of capital-intensive projects challenging, has led to a decrease in overall construction starts and grid connection rates over the last four years.”
Indeed, with Western economies having only recently (and slowly) emerged from the near meltdown of the Western banking system after Lehman Brothers crashed, the industry was bracing itself for the near perfect storm.
Lenders were less willing to lend and consumers were cutting demand for electricity as the economic crisis continued to bite.
Hindsight has shown however that whilst lessons were learned from Fukushima, with action undertaken at both local and global level regarding operating safety – not least in the form of ‘stress tests’ (under extreme scenarios) and comprehensive reviews undertaken by the European Union, for example – talk of a meltdown for the industry as a whole has proven wide of the mark.
DOWN BUT NOT OUT
Over the past year or so, the industry has shown signs of recovery. While the number of construction starts on new reactors dropped from sixteen in 2010 to four in 2011, seven projects began construction in 2012 and ten in 2013, indicating an upward trend since the accident at the Fukushima Daiichi nuclear power plant.
As Douglas Cook, a manager in PwC Abu Dhabi’s power and utilities team puts it: “Global new nuclear build is down, but I do not believe that it is out.
“I believe the ‘down’ is a combination of factors (not only of Fukushima), which specifically include the very high capital costs of nuclear build, the rising efficiency of CCGTs (Close Cycle Gas Turbine), the relatively low cost of gas internationally and the dramatically falling cost of solar and wind,” he adds.
But as he further notes: “Politically, nuclear power will remain a very difficult topic.”
“However, technically, nuclear remains a clean, reliable base load, an indispensable input for many electricity systems worldwide.”
While the dash for nuclear power is alive in the GCC, especially in the UAE, which aims to generate up to 25 per cent of its electricity needs from four reactors by 2020, the global picture is a more complicated one.
Germany’s announcement, following Fukushima, to shut all of its nuclear reactors by 2022 – as part of a longer term strategy to reduce power by 10 per cent by 2020 and further expand the use of wind, solar power and other renewables – was seen as knee-jerk by some at the time, radical by others.
Meanwhile, France’s subsequent decision, in June 2014, to reduce atomic energy, as a proportion of domestic power output, to 50 per cent from 75 per cent by 2025, has similarly been viewed as radical, given the nation’s long-term heavy reliance on nuclear power as an energy source.
Paris has far from thrown in the towel however with the country’s state- owned utility exploring the possibility of extending the lifespan of the nation’s existing 58 nuclear reactors from 40 year to 60 years.
Canada is similarly rolling back its programme. At present about 15 per cent of the country’s electricity needs come from nuclear power, with 19 reactors, mostly in Ontario, providing 13.5 GW of power capacity.
While Ottawa did have plans to expand its nuclear capacity over the next decade by building two more new reactors, those plans have now been deferred.
THE ‘FOR’ CASE
Nuclear energy has its advocates that are pushing for the technology as a viable alternative to unreliable renewable energy such as solar and wind, and carbon-intensive crude oil and coal.
The World Nuclear Organisation, which promotes the interests of the industry, says that increased awareness of the dangers and effects of global warming and climate change has helped in this regard.
“It has led decision makers, media and the public to realize that the use of fossil fuels must be reduced and replaced by low-emission sources of energy, such as nuclear power, the only readily available large-scale alternative to fossil fuels for production of continuous, reliable supply of electricity,” it said.
For resource-poor Japan, for example, which relies heavily on coal, natural gas and crude oil imports from other nations, nuclear energy provides some energy security in addition to providing high-end jobs, scientific and atomic skillsets and investment opportunities. As the world focuses on climate change, nuclear energy offers distinct advantages over fossil fuels.
The US National Aeronautics and Space Administration (NASA)’s Goddard Institute for Space Studies notes that nuclear power prevented an average of 64 gigatonnes of CO2-equivalent net GHG emissions globally between 1971-2009.
“This is about 15 times more emissions than it caused. It is equivalent to the past 35 years of CO2 emissions from coal burning in the US or 17 years in China – i.e., historical nuclear energy production has prevented the building of hundreds of large coal-fired power plants,” NASA said.
But nuclear energy is not without its critics. Despite rapid advances in technology and the development of small modular reactors that are less expensive, many scientists are opposed to the technology.
While some analysts believe nuclear energy could be the “transition technology” between fossil fuels and renewables, environmental groups such as Greenpeace International and Public Citizens believe that nuclear is not the answer to climate change.
The disaster of Chernobyl in Ukraine in 1986 continues to haunt the industry, and many sceptics fear a similar episode could spell the end of nuclear technology, leading to billions of dollars in waste.
“Every user of nuclear power is hostage to the safety performance of other users because of the adverse consequences that would arise if there were a nuclear accident anywhere,” the International Atomic Energy Agency (IAEA) said in an annual letter.
Nuclear waste is another big issue for countries. Spent fuel, if not disposed of properly, could contaminate water supplies or could land in the hands of unsavoury elements.
Despite its challenges, the nuclear industry continues to present a compelling case. The industry can provide a hedge against commodity price volatility that is crucial for countries that cannot just rely on any one source of energy – in that respect, nuclear energy must be part of the energy mix.
IN VOGUE, SOMEWHERE
This is not the industry’s first brush with disaster. The city of Chernobyl is synonymous with nuclear radiation and remains uninhabitable 29 years on. But the industry bounced back from that much-bigger disaster.
Nuclear power is now the largest source of low-carbon electricity in OECD countries, with an 18 per cent overall share of electricity production in 2013 and second at global levels with an 11 per cent share.
The power source is expected to grow by between 17 per cent in a low-case projection and 94 per cent in a high-case projection by 2030, according to the IEA’s latest forecast, factoring in Fukushima Daiichi accident, the low prices of natural gas and the increasing capacities of subsidized renewable energy.
Nuclear energy capacity is expected to rise fourfold to 20 GW by the coming decade from its current levels.
“The strongest projected growth is in regions that already have operating nuclear power plants, led by Asian States, including China and the Republic of Korea,” the IEA said.
“Eastern Europe, which includes the Russian Federation, as well as the Middle East and South Asia, which includes India and Pakistan, also show strong growth potential.”
As many as 72 reactors are under construction – the highest number since 1989. Expansion remains concentrated in Asia, which is home to 48 of the
Counterbalancing the German, French and Canadian initiatives is the Indian government, which already runs a 1 GW reactor at the Russian-built Kudankulam power station (a second is due to come on stream this year).
The government concluded an agreement in December 2014 with Russia’s state-owned Rosatom to supply it with 12 nuclear energy reactors over the next 20 years. Though this is a far cry from the as many as 25 reactors Vladimir Putin had been hoping to sell Delhi, India’s nuclear power intent is self-evident.
China meanwhile – under the State Council’s Energy Development Strategy Action Plan 2014-19 – envisages tripling its nuclear generating capacity to 58 GW by 2020, ranking it number three (after the US and France) in terms of overall capacity, according to the World Nuclear Association (WNA).
However, Beijing’s ambitions don’t end there, given a target of 150 GW by 2030, as the country continues to reduce its reliance upon coal.
WNA figures show Mainland China currently has 23 nuclear power reactors in operation, 26 under construction, and more about to start construction. In the US, meanwhile, talk of a nuclear renaissance may have been overplayed but Washington did confirm in April 2013 that it would resume building nuclear power plants after a three decade gap – principally to ensure nuclear power will continue to provide about 20 per cent of US energy needs between now and 2035.
The US programme largely represents a holding pattern – five new plants now being built set to replace four ageing reactors that are due to be decommissioned. But with an estimated dozen reactors set to be decommissioned over the next decade, further plants are likely to be built.
THE MIDDLE EASTERN PICTURE
Projects have also commenced in Middle East, specifically in the UAE and Saudi Arabia.
“After the UAE, where construction of the first nuclear power plant started in 2012, Belarus is the second nuclear ‘newcomer’ State in three decades to start building its first nuclear power plant,” the IAEA noted.
Apart from the UAE, a number of other Middle East nations including Saudi Arabia, Egypt and Jordan have also expressed an interest in developing nuclear technology. Others such as Kuwait, Algeria, Libya and Qatar have also discussed the potential of harnessing nuclear energy.
But in the Middle East, the UAE is closest to reaching the goal of developing a nuclear industry, with construction already under way.
The Environment Agency – Abu Dhabi (EAD), the country’s environment regulator’s approval to build the Barakah Nuclear Power Plant Units 1 & 2 is groundbreaking as it has become the most advanced civil Gulf nuclear power project.
The Korean conglomerate of Korea Electric Power Corp (KEPCO), Hyundai Engineering and Construction, and Samsung and Doosan Heavy Industries, as well as US firm Westinghouse are proceeding to build the $20 billion facility.
The project is already boosting the wider economy with a string of contracts.
“Along with the UAE’s prime contract with its Korean partners, many subcontracts have been concluded with local contractors, particularly in the areas of construction, site preparation and infrastructure development,” Hamad Al Kaabi, Resident Representative of the UAE to the IAEA, told the agency in December 2014.
“Emirates Steel, for example, has been a main supplier in the Barakah NPP construction, having so far delivered around 100,000 tons of steel expecting to do more.”
The country is already benefiting from the expertise and development of a brand new sector.
“Building a sustainable national capacity is a challenge for the global nuclear sector and naturally also for the UAE,” Al Kaabi said.
“We have taken aggressive steps in developing the required human resources through an array of programmes,including scholarships, on-the-job trainings, and introducing nuclear education at undergraduate, Masters and PhD levels. These will produce an advanced nuclear cadre to support long- term sustainability objectives.”
Saudi Arabia is also looking to develop as much as 18 GW of nuclear capacity by 2032, under the King Abdullah City for Nuclear and Renewable Energy (KA-CARE).
Egypt was also reportedly considering the construction of a nuclear power plant in an effort to utilise its rich uranium reserves. Efforts to build 4 GW of nuclear capacity, by 2025, were reportedly under way, with Russian co-partners being considered.
AN IMPROVING SITUATION
Globally, there may be light at the end of the tunnel, at least according to the Nuclear Energy Agency (NEA) and the IEA.
In the 2015 Edition of their ‘Technology Roadmap – Nuclear Energy’, the global situation, three years after Fukushima, has been improving with the number of construction starts again on the rise.
But they add that the grid connection rate is still too low to meet the 2 degrees Celsius Scenario (2DS) target for nuclear power by 2025 (IEA, 2014).
The 2DS scenario, as described by the IEA in 2014, envisages an energy system consistent with an emissions trajectory that recent climate science research indicates would give an 80 per cent chance of limiting the average global temperature increase to 2 Degrees Celcius.
In addition, it sets a target of cutting energy-related CO2 emissions by more than half in 2050 (compared with 2009) and ensuring they continue to fall thereafter.
Even in Japan, where political sensitivities are never far from the surface Prime Minister Shinzo Abe’s government has been pushing to bring some of the country’s reactors back online, arguing they’re integral to future economic growth.
Late last year, a Japanese city voted to start two reactors. Abe, who considers nuclear as a key source of base-load power for the economy that relies heavily on expensive hydrocarbon imports, also announced a plan to gradually bring back reactors that had passed a Japanese Nuclear Regulation Authority (NRA) fitness test.
With several nations now conducting feasibility studies, the global nuclear industry, longer term, is likely to see the roll-out of so-called SMRs (Small Modular Reactors).
Seen as potentially flexible cost effective energy alternatives – and defined by the IAEA as having an output of less than 300MW, these types of reactors are constructed off site and then brought to the site.
Whether their proponents, who argue SMRs allow for increased containment efficiency, and heightened nuclear materials security, ultimately prove correct, remains open to question, however.