2015 Nuclear Energy Global Outlook

By Sharryn Dotson, Editor

The year 2014 was a year of resurgence in some countries and loss in others in the nuclear energy industry. Some nuclear power projects broke ground while others shut down. The U.S. released financing for advanced technologies, and regulators worldwide addressed waste storage issues. The global nuclear industry is now assessing the expectations of the previous year to see what direction it should take this year.

According to the World Nuclear Association (WNA), there are 435 operating nuclear reactors around the world, with another 72 under construction. In 2013, global nuclear energy generated 2,359 TWh of electricity. The U.S., Japan and Germany all saw drops in nuclear generation due to the shutdown of reactors, but it was offset by a 34 TWh increase in China and increases in other countries, according to a 2014 outlook published by the International Atomic Energy Association (IAEA).

What does 2015 hold for the nuclear industry around the world? Dan Lipman, Executive Director of Policy Development and Supplier Programs with the Nuclear Energy Institute (NEI), said we could expect more growth for nuclear due to increased support and funding from governments.

“There are a variety of rationales for developing nuclear in your country,” Lipman said. “Governments have many reasons for pursuing nuclear power programs, and it varies from country to country.”

The Watts Bar 2 Nuclear Project is one of 72 reactors currently under construction.
The V.C. Summer Unit 2 is one of two Westinghouse AP1000 units under construction in Jenkinsville, S.C.

The U.S., in particular, is seeing resurgence after the so-called nuclear renaissance a few years back that failed to take off. Out of the 72 plants under construction, the U.S. has five: one at Watts Bar 2 in Tennessee, and two each at Plant Vogtle in Georgia and V.C. Summer in South Carolina.

“When you look at the U.S. new build program, the plants are constructed under a microscope into which many stakeholders peer. We have a modest building program, the first we’ve had in three decades and that’s a big plus,” Lipman said.

“The world sees how we are progressing or not, and whether they’re running into any public acceptance hurdles and if the supply chain is or isn’t working.”

Lipman said that while the U.S. industry is looking at what to do and not to do when building a new plant, other countries are watching to see how the nation follows up when these projects are completed.

“Specifically, they are looking at further developments in U.S. policy for deployment of new nuclear plants,” he said.

Policies are just one part of helping increase nuclear developments around the world.

“Most countries face different resource issues than we have,” Lipman said. “They’re reliant on imports, for example, whether it’s fossil fuels or something else.”

William D. Magwood IV, director-general of the Organisation for Economic Cooperation and Development (OECD)’s Nuclear Energy Agency (NEA), said the effects of the Fukushima accident on global nuclear capacity were dependent on how each country viewed nuclear’s importance in its energy mix.

“I don’t think we will see many countries change the course when it comes to nuclear energy,” Magwood said. “The countries that moved toward phase out made those decisions very soon after the Fukushima accident. We’re not seeing any additional countries shy away from nuclear.”

What the Fukushima accident did was put a spotlight on the importance of safety at power plants, Magwood said.

“For many in the nuclear area, one of the shocks of Fukushima was experiencing the accident and watching it unfold on television,” Magwood said. “While intellectually, operators understood the importance of safety, seeing (the accident) unfold changed the psychology and brought the importance of safety even more to the forefront.”

We will continue to see countries implement lessons learned from Fukushima and install additional safety measures and training.

“There will be an ongoing need to educate nuclear workers on enhanced safety communication and ensuring that workers always put safety first,” said Cecilia Tam, head of the Energy Demand Technology Unit and Technology Roadmaps Program with the International Energy Agency (IEA). “Fukushima highlighted the need for enhanced transparency and having reporting procedures in place.”

Tam was one of the authors on IEA’s and NEA’s update of the 2010 Technology Roadmap: Nuclear Energy. The roadmap said that nuclear power holds an 18 percent share of electricity production in OECD countries in 2013.

Lipman said the U.S. needs a policy that encourages investment in order to help the industry continue to grow. Many investors are deterred from investing money into projects with such long payback periods.

Research and development of advanced technologies are also expected to grow in 2015. “We see that new nuclear generation technologies need to be deployed in the 2020’s for SMRs and into the 2030’s for advanced technologies. These are the timeframes when the existing fleet in the U.S. reaches its licensed life.”

The U.S. Department of Energy’s Loan Programs Office announced in December it opened $12.6 billion in loan guarantees for advanced nuclear technologies such as small modular reactors, molten salt reactors and breeder reactors. The solicitation also covers uprate and upgrade projects and front-end projects. The loan guarantees are a positive step, but more needs to be done, Lipman said. Other countries such as China and India have cost-sharing and risk-sharing agreements between the government and utilities, Lipman said, which are the most cost-effective ways to increase nuclear investments and advance the industry. Also critical are expeditious and predictable regulatory processes that reduce uncertainties.

SMRs could open up a new market for nuclear, but only if they can demonstrate their economics, IEA’s Tam said. The scalability of modular reactors eases financing and could be a potential game changer. However, NEA’s Magwood says that over the next decade, industry will prefer light water reactors for new developments as advanced reactor technologies continue to develop.

Even with the financial boost from the DOE, Lipman said he doesn’t think there will be any new projects in the U.S. this decade. Other countries such as Russia, Turkey, Brazil, Canada, France, South Korea, South Africa and the U.K. have already broken ground on or are planning new projects.

“Some countries have thoroughly aggressive construction schedules, but may start building in 2015,” said Carol Berrigan, Senior Director of Supplier Policy and Programs with NEI.

“India, for sure, and China, for sure,” Lipman added. “We tend to look at who is awarding new projects instead of who is starting new projects.”

The Sendai nuclear power plant is one of the first granted permission to restart in Japan.
The Sendai nuclear power plant is one of the first granted permission to restart in Japan.

According to the WNA, 14 reactors in China, India, Taiwan, the U.S. and Russia are scheduled to come online in 2015, totaling 14.3 GW of capacity.

The restart of reactors in Japan will also help boost nuclear generation worldwide. “You have 54 plants in Japan that have not operated since 2011 and it’s been a slow and painful process for Japan to begin restarts based on new regulatory authorities, safety cases, investments in new accident scenario preparations and accident response,” Lipman said.

IEA’s Tam said restarts in Japan would help to create confidence in nuclear safety because the industry continues to implement enhanced safety and security procedures and policies.

“Following Fukushima, countries undertook an extensive review of the state of their plants to ensure continued safe operation of these facilities. There are limited alternatives which provide the security and predictability of electricity supply, stable long term costs and other aspects such as addressing emissions,” she said.

While the shutting down of the entire fleet negatively impacted Japan’s economy and emissions levels, the restarts – along with new reactors that were on hold after the disaster – should give it a nice boost. The restarts will also help lower emissions in the country since it had to use more fossil-fueled generation to make up the generation deficit.

As more nuclear plants are built and more projects use foreign content, growing the global supply chain will be important in 2015.

“As a global supply chain, we’re very interconnected, and it’s taking a while for suppliers in and outside of the U.S. to gear up to supply products and services that are defect-free and meeting all requirements,” Lipman said. “It’s hard being a supplier, whether you’re in Rome, New York, or Rome, Italy.”

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