Nuclear lobbyists are abandoning the tiresome rhetoric about a nuclear power 'renaissance'. Indeed they've turned full-circle and are now warning about a crisis. Michael Shellenberger from the Breakthrough Institute, a US-based pro-nuclear lobby group, has recently written articles about nuclear power's "rapidly accelerating crisis" and the "crisis that threatens the death of nuclear energy in the West".
A recent articlefrom the Breakthrough Institute and the like-minded Third Way lobby group discusses "the crisis that the nuclear industry is presently facing in developed countries" and states that "the industry is on life support in the United States and other developed economies".
'Environmental Progress', another US pro-nuclear lobby group connected to Shellenberger, also acknowledges a nuclear power crisis. The lobby group notes that 151 gigawatts (GW) of worldwide nuclear power capacity (38% of the total) could be lost by 2030 (compared to 33 GW of retirements over the past decade).
As a worldwide generalisation, nuclear power can't be said to be in crisis. To take the extreme example, China's nuclear power program isn't in crisis â€’ it is moving ahead at pace. Nuclear power is moving ahead at snail's pace in some other countries (e.g. Russia, South Korea), while in others the industry faces problems but is not in crisis (e.g. UK, Sweden, Switzerland, Belgium, Ukraine).
Nonetheless, the global picture is one of stagnation and malaise. The July 2016 World Nuclear Industry Status Report provides an overview of the troubled status of nuclear power:
- nuclear power's share of the worldwide electricity generation is 10.7%, well down from historic peak of 17.6% in 1996;
- nuclear power generation in 2015 was 8.2% below the historic peak in 2006; and
- from 2000 to 2015, 646 GW of wind and solar capacity were added worldwide while nuclear capacity (not including idle reactors in Japan) fell by 8 GW.
Renewable energy generation doubled over the past decade and renewables now account for 23.5% of global electricity generation, more than twice the contribution from nuclear reactors. The gap is widening every day. The International Energy Agency's 2016 Renewable Energy Medium-Term Market Report anticipates 825 GW of new renewable capacity from 2016-21.
The International Energy Agency report notes that record deployment of 153 GW of renewable energy capacity in 2015 was accompanied by "continued sharp generation cost reductions", with further cost reductions of 15% for onshore wind and 25% for utility-scale solar PV anticipated over the next five years. Conversely, the Hinkley Point project in the UK typifies nuclear power's astonishing cost increases â€’ the estimated cost (including finance) is A$40 billion for two reactors.
US nuclear industry in crisis
The US nuclear industry is in crisis, with a very old reactor fleet â€’ 44 of its 99 reactors have been operating for 40 years or more - and no likelihood of new reactors for the foreseeable future other than four already under construction.
Japanese conglomerate Toshiba and its US-based nuclear subsidiary Westinghouse are in crisis because of massive cost overruns building four AP1000 reactors in the US â€’ the combined cost overruns amount to about US$11.2bn and counting.
Toshiba said in February 2017 that it expects to book a US$6.3bn writedown on Westinghouse, on top of a US$2.3bn writedown in April 2016. The losses exceed the US$5.4bn Toshiba paid when it bought a majority stake in Westinghouse in 2006.
Toshiba says it would likely sell Westinghouse if that was an option â€’ but there is no prospect of a buyer. Westinghouse is, as Bloomberg noted, "too much of a mess" to sell. And since that isn't an option, Toshiba must sell profitable businesses instead to stave off bankruptcy.
Toshiba is seeking legal advice as to whether Westinghouse should file for Chapter 11 bankruptcy. But even under a Chapter 11 filing, Reuters reported, "Toshiba could still be on the hook for up to $7 billion in contingent liabilities as it has guaranteed Westinghouse's contractual commitments" for the US AP1000 reactors.
Pro-nuclear commentator Dan Yurman says that a "sense of panic is emerging globally" as Toshiba exits the reactor construction industry. He adds:
After nine years of writing about the global nuclear industry, these developments make for an unusually grim outlook. It's a very big rock hitting the pond. Toshiba's self-inflicted wounds will result in long lasting challenges to the future of the global nuclear energy industry.
The French nuclear industry is in crisis
The French nuclear industry is in its "worst situation ever", former EDF director Gérard Magnin said in November 2016. The French government is selling assets so it can prop up its heavily indebted nuclear utilities Areva and EDF.
The current taxpayer-funded rescue of the nuclear power industry may cost the French state as much as €10bn, Reuters reported in January, and in addition to its "dire financial state, Areva is beset by technical, regulatory and legal problems."
France has 58 operable reactors and just one under construction. French EPR reactors under construction in France and Finland are three times over budget â€’ the combined cost overruns for the two reactors amount to about €12.7bn.
Bloomberg noted in April 2015 that Areva's EPR export ambitions are "in tatters". Now Areva itself is in tatters and is in the process of a government-led restructure and another taxpayer-funded bailout.
On March 1, Areva posted a €665m net loss for 2016. Losses in the preceding five years exceeded €10bn. A large majority of a €5bn recapitalisation of Areva scheduled for June 2017 will come from French taxpayers.
On February 14, EDF released its financial figures for 2016: earnings fell 6.7%, revenue declined 5.1%, net income excluding non-recurring items fell 15%, and EDF's debt remained steady at €37.4bn. All that EDF chief executive Jean-Bernard Levy could offer was the hope that EDF would "hit the bottom of the cycle" in 2017 and rebound next year.
EDF plans to sell€10bn of assets by 2020 to rein in its debt, and to sack up to 7,000 staff. The French government provided EDF with €3bn in extra capital in 2016 and will contribute €3bn towards a €4bn (US$4.2bn) capital raising this year.
On March 8, shares in EDF hit an all-time lowa day after the €4bn capital raising was launched; the stock price fell to €7.78, less than one-tenth of the €86.45 high a decade ago.
Costs of between €50bn and €100bn will need to be spent by 2030 to meet new safety requirements for reactors in France and to extend their operating lives beyond 40 years.
EDF has set aside €23bn to cover reactor decommissioning and waste management costs in France â€’ less than half of the €54bn that EDF estimates will be required. A recent report by the French National Assembly's Commission for Sustainable Development and Regional Development concluded that there is "obvious under-provisioning" and that decommissioning and waste management will likely take longer, be more challenging and cost much more than EDF anticipates.
In 2015, concerns about the integrity of some EPR pressure vessels were revealed, prompting investigations that are still ongoing. Last year, the scandal was magnified when the French Nuclear Safety Authority (ASN) announced that Areva had informed it of "irregularities in components produced at its Creusot Forge plant." The problems concern documents attesting to the quality of parts manufactured at the site. At least 400 of the 10,000 quality documents reviewed by Areva contained anomalies.
EDF is being forced to take over parts of its struggling sibling Areva's operations - a fate you wouldn't wish on your worst enemy. And just when it seemed that things couldn't get any worse for EDF, a fire took hold in the turbine room of one of the Flamanville reactors on February 9 and the reactor will likely be offline until late March at an estimated cost of roughly €1.2m per day.
Half of the world's nuclear industry is in crisis and/or shutting down
No-one would dispute that Japan's nuclear power industry is in crisis, with no end in sight. Six years after the Fukushima disaster, only three reactors are operating in Japan; before the disaster, the number topped 50.
A February 2017 EnergyPostWeekly article says "the EU, the US and Japan are busy committing nuclear suicide."
Combined, the crisis-ridden US, French and Japanese nuclear industries account for 45% of the world's 'operable' nuclear reactors according to the World Nuclear Association's database, and they accounted for 50% of nuclear power generation in 2015 (and 57% in 2010).
Countries with crisis-ridden nuclear programs or phase-out policies (e.g. Germany, Belgium, and Taiwan) account for about half of the world's operable reactors and more than half of worldwide nuclear power generation.
The Era of Nuclear Decommissioning (END)
The ageing of the global reactor fleet isn't yet a crisis for the industry, but it is heading that way. The assessment by the 'Environmental Progress' lobby group that 151 GW of worldwide nuclear power capacity could be shut down by 2030 is consistent with figures from the World Nuclear Association (132 reactor shut-downs by 2035), the International Energy Agency (almost 200 shut-downs between 2014 and 2040) and Nuclear Energy Insider (up to 200 shut-downs in the next two decades).
It looks increasingly unlikely that new reactors will match shut-downs. Another 20 years of stagnation is possible, but only if China continues to do the heavy lifting. And if China's nuclear program slows, worldwide nuclear decline is certain.
Perhaps the best characterisation of the global nuclear industry is that a new era is approaching - the Era of Nuclear Decommissioning (END). Nuclear power's END will entail:
- a slow decline in the number of operating reactors (unless growth in China can match the decline elsewhere);
- an increasingly unreliable and accident-pronereactor fleet as ageing sets in;
- countless battles over lifespan extensions for ageing reactors;
- many battles over the nature and timing of decommissioning operations;
- many battles over taxpayer bailouts for companies and utilities that haven't set aside adequate funding for decommissioning;
- more battles over proposals to impose nuclear waste repositories on unwilling or divided communities; and
- battles over taxpayer bailouts for companies and utilities that haven't set aside adequate funding for nuclear waste disposal.
Nuclear power is likely to enjoy a small, short-lived upswing in the next couple of years as reactors ordered in the few years before the Fukushima disaster come online. Beyond that, the Era of Nuclear Decommissioning sets in, characterised by escalating battles â€’ and escalating sticker-shock â€’ over lifespan extensions, decommissioning and nuclear waste management.
In those circumstances, it will become even more difficult than it currently is for the industry to pursue new reactor projects. A positive feedback loop could take hold and then the industry will be well and truly in crisis.
Lobbyists debate solutions to the crisis
Josh Freed and Todd Allen from pro-nuclear lobby group Third Way, and Ted Nordhaus and Jessica Lovering from the Breakthrough Institute, write this obituary for large conventional reactors: "If there is one central lesson to be learned from the delays and cost overruns that have plagued recent builds in the US and Europe, it is that the era of building large fleets of light-water reactors is over in much of the developed world. From a climate and clean energy perspective, it is essential that we keep existing reactors online as long as possible. But slow demand growth in developed world markets makes ten billion dollar, sixty-year investments in future electricity demand a poor bet for utilities, investors, and ratepayers."
The four Third Way / Breakthrough Institute authors conclude that "a radical break from the present light-water regime ... will be necessary to revive the nuclear industry". Exactly what that means, the authors said, would be the subject of a follow-up article.
So readers were left hanging â€’ will nuclear power be saved by failed fast-reactor technology, or failed high-temperature gas-cooled reactors including failed pebble-bed reactors, or by thorium pipe-dreams or fusion pipe-dreams or molten salt reactor pipe-dreams or small modular reactorpipe-dreams? Perhaps we've been too quick to write-off cold fusion?
The answers came in a follow-up article on February 28. The four Third Way / Breakthrough Institute authors argue that nuclear power must become substantially cheaper and this will not be possible "so long as nuclear reactors must be constructed on site one gigawatt at a time. ... At 10 MW or 100 MW, by contrast, there is ample opportunity for learning by doing and economies of multiples for several reactor classes and designs, even in the absence of rapid demand growth or geopolitical imperatives."
Other than their promotion of small reactors and their rejection of large ones, the four authors are non-specific about their preferred reactor types. Any number of small-reactor concepts have been proposed.
Small modular reactors (SMRs) have been the subject of much discussion and even more hype. There's quite a bit of R&D â€’ in the US, the UK, South Korea, China and elsewhere. But only a few SMRs are under construction: one in Argentina, a twin-reactor floating nuclear power plant in Russia, and three SMRs in China (including two high-temperature gas-cooled reactors). The broad picture for SMRs is much the same as that for fast neutron reactors: lots of hot air, some R&D, but few concrete plans and even fewer concrete pours.
There isn't the slightest chance that SMRs will fulfil the ambition of making nuclear power "substantially cheaper" unless and until a manufacturing supply chain is mass producing SMRs for a mass market â€’ and even then, it's doubtful whether the power would be cheaper and highly unlikely that it would be substantially cheaper. After all, economies-of-scale have driven the long-term drift towards larger reactors.
As things stand, no country, company or utility has any intention of betting billions on building an SMR supply chain. The prevailing scepticism is evident in a February 2017 Lloyd's Register report based on "insights and opinions of leaders across the sector" and the views of almost 600 professionals and experts from utilities, distributors, operators and equipment manufacturers. Respondents predicted that SMRs have a "low likelihood of eventual take-up, and will have a minimal impact when they do arrive".
In the absence of a mass supply chain, SMRs will be expensive curiosities. The construction cost of Argentina's 25 MWe CAREM reactor is estimated at US$446 million, which equates to a whopping US$17.8 billion / GW. Estimated construction costs for the Russian floating plant have increased more than four-fold and now equate to over US$10 billion / GW.
Small or large reactors, consolidation or innovation, conventional reactors or Generation IV pipe-dreams ... it's not clear that the nuclear industry will be able to recover however it responds to its current crisis.