Recent economic and social factors in Japan, the USA and France, today's major nuclear countries, are causing the decline of nuclear power there, just as it reaches full stride in China, and starts to blossom in the Middle East.
It is now generally accepted that there has been a fundamental eastwards switch in the centre of gravity of the nuclear world, with growth increasingly concentrated in China and other Asian countries. Growth prospects are much more modest in the more established nuclear world - Western Europe and North America. Indeed, it was mentioned last month that world uranium demand will likely fall in the period to 2020 in these regions, which are currently satisfied by the established uranium producers. Part of this reflects changes in the mix between uranium and enrichment requirements, but it is entirely possible that the number of reactors in operation in both regions will decline markedly by 2030.
One way to look at this is to consider prospects in the top three countries for nuclear power today. One curiosity is that the statistical tables provided by both the World Nuclear Association and International Atomic Energy Agency still show Japan at number three, with 48 reactors listed as 'operable'. Everyone knows that none of these units are currently operating, and that there is little chance that all of them will be allowed to return to service. On the other hand, both the USA's 100 reactors and France's 58 all are definitely operating (excepting those shut down for outages).
Japan: little clarity on nuclear power
The resolution of the Japanese nuclear situation is obviously very important for the world industry and there is little clarity at present about what will eventually happen. There were strong forces present in the immediate aftermath of the Fukushima accident suggesting that Japan should move away completely from nuclear for part of the country's power generation mix; they have been somewhat weakened. The notable upward pressure on electricity prices from more fossil fuel generation, the adverse impact on the country's balance of payments (and also on its carbon emissions) are all important factors in this. There also remain deep concerns about the energy security of relying more heavily on imported liquefied natural gas.
Japanese Prime Minister Shinzo Abe has to balance a wide range of opinion about the future of nuclear, even within his own Liberal Democratic party, with prominent and well-respected members such as former PM Junichiro Koizumi strongly opposed to reactors restarting. They want to rely more on other energy resources and in particular seek to maximise the contribution of renewables. On the other hand, there are strong forces, centred within Japanese industry, very much opposed to this viewpoint and wanting an early restart of as many reactors as possible.
The government's overall energy policy for the future is still very unclear (planners are currently sitting on the fence about nuclear) but the immediate reactor restart prospects are essentially out of its hands. They rest with the new Nuclear Regulation Authority (NRA) and local public opinion in the prefectures surrounding the plants. The NRA needs quickly to establish its credibility as an independent agency free of the political and industrial biases of its discredited predecessor and so will be cautious about allowing restarts. Even when the NRA has given its approval, local opposition could conceivably prevent some reactors returning to service. For example, it is generally viewed as highly unlikely that the four units at Fukushima Daini will ever return to service, in spite of any technical merits.
A reasonable estimate is for perhaps 25-30 of the 48 reactors to come back online, but this may take up to five years. It is important that the first few restarts go very smoothly, without even minor safety-related incidents, or else the whole process could become quickly compromised. Another important point is that proposals for a thorough restructuring of the Japanese power generation sector are now under discussion, adding to the uncertainties of the regional utilities owning and operating the nuclear stations. So the situation is still evolving and it will take time for the new Japanese energy strategy to become apparent.
US: Existing reactors look vulnerable
Turning to the USA, the good news is that there are four reactors at two sites (Vogtle and Summer) now actively under construction. This adds to the second unit at Watts Bar, which is now being completed after many years of suspended work. Each of these projects seems to be progressing well, with the prospect of new reactors for the first time in many years clearly a major boost to the US industry.
The good news unfortunately runs out just about here. Despite the beginning of the process of extending the operating licence of the 100 current reactors to as much as 80 years, this is purely an assessment on safety grounds from the Nuclear Regulatory Commission (NRC). Whether a reactor continues to operate or not is ultimately an economic decision for the owners, and many US units are now vulnerable to a combination of various forces.
Much attention has been given to the advent of much lower natural gas prices stemming from the exploitation of unconventional resources now deemed economic via technologies such as fracking. This has made some US reactors (particularly in those areas with liberalised and competitive power markets) economically vulnerable. Nobody can say for certain that low gas prices will continue (for one thing, they must greatly stimulate demand) but the competitive position of ageing nuclear units has clearly worsened substantially. Cheaper gas has largely been behind the abandonment of other plans for new reactors in the US. It is not impossible that there will be further new units beyond those currently under construction, in areas where the power market is still regulated, but the likelihood is that there will be more closures.
The other key economic factor is the arrival of substantial amounts of heavily-subsidised renewable power on some local US electricity markets. In common with the situation in Europe, when wind and solar units are generating their power is essentially zero-cost. When this gets taken up by the grids, it causes substantial problems for other generating modes. Where there is excess supply, prices can become negative, owing to the need to dump some output. The previous assumption that nuclear stations can run at capacity factors of 90%-plus is no longer true. This has very adverse impacts on their economics. The largest US nuclear operator, Exelon, has emphasised that several of its plants are now very vulnerable to cheaper gas and subsidised renewables. The industry is lobbying for proper recognition of the value of nuclear generation (such as steady, reliable and substantial supply) in power market regimes, but is finding it hard to be heard.
There are other problems in the USA that tend to chip away at the nuclear industry's prospects, ranging from the uncertainties over used fuel policy post-Yucca Mountain, to the failure to come up with workable policies to curb greenhouse gas emissions. It is hard, however, to predict where and when reactor closures will occur. The closures of five units where definitive decisions have been made over the past 18 months were also hard to predict, and the explanations for closure are very different. Given what we know today, it is reasonable to predict that maybe 30 of the 100 units currently in operation will shut by 2030, but the actual number could be more or less than that. Even if we assume perhaps another four new units will follow the five currently under construction, the overall picture is for a substantial reduction in US nuclear generation.
France debates energy transition
Until comparatively recently, it was assumed that France would always be a strong supporter of nuclear, with over 70% of its electricity coming from its 58 operating units. While other European countries like Germany, Belgium and Switzerland may choose to phase out their nuclear units, France would surely always be supportive. This has changed quite quickly in recent years and France has begun debating its own 'energy transition'. This change of attitude has been caused by a combination of factors, notably what has been happening in Germany, the Fukushima accident, the context of running a large number of ageing reactors, and the complexities of French electoral politics. The previous assumption that France has already achieved the move to low carbon and cheap electricity supply (and that the future involved more of the same, that is, nuclear) is now being seriously questioned.
The decision to close the two oldest PWRs at Fessenheim before the end of Prime Minister François Hollande's tenure (2016) is seen as an important test of this new thinking. A plan to cut the nuclear share of electricity to 50% is still under debate and seems to be a reasonable compromise, if it is to be carried out over a long period (perhaps by 2030). This would involve the closure of perhaps another eight units beyond Fessenheim, with the EPR at Flamanville the sole new unit (the third unit at Penly has now effectively been shelved).
A large number of French units reach 40 years of operation in the 2017-2025 period, and it should be technically possible to extend their operating lives well beyond this, given the experience from the USA and elsewhere. Indeed, utility EDF has made financial plans to undertake the necessary investment (about €40 billion) to allow this to happen. It seems, however, that the regulatory body (ASN) does not see things quite the same way. It will take some convincing (in the aftermath of Fukushima) before it will authorise continued operation as a matter of course. Each case will be taken strictly on its merits, but wider political and economic forces will also intervene.
There is a much stronger anti-nuclear movement in France than in, for example, the UK or USA, and its complaints that energy policy has been misguided and run by an undemocratic narrow elite have gained more traction. The current economic malaise in France is also leading to a great deal of angst and questioning of policies. Unconventional gas is not an issue in France (nor yet in Europe as a whole) but the impact of renewables on power sector economics clearly is. In line with the situation in the USA, renewables in an increasingly integrated European power grid have the potential to constrain the economics of nuclear in France. Load following with nuclear units has been carried out as a matter of course in France for many years, but it is not ideal from either a technical or economic viewpoint. And when the wind blows and sun shines in Germany, there will be large quantities of cheap power available to the regions of France bordering Germany.
Expansion in Asia to offset closures?
Taking the world as a whole, the rapid expansion of nuclear power in China (assuming it doesn't face a major unforeseen hurdle) will more than counterbalance these expected reductions in nuclear capacity in the previous Big Three. China is set to add about 40 GWe by 2020 alone and could conceivably add another 80-100 GWe by 2030. At this rate of expansion, it should overtake the USA and become the world's leading generator of nuclear power by 2025. With growth in other major countries such as Korea, India and Russia also more than offsetting closures in Germany and other countries, world nuclear generating capacity should still grow by 2-3% per year to 2030.
What has changed over the past five years is the expectation of where nuclear growth will take place. The mooted 'renaissance' in North America and Western Europe has been put on hold and may now not come until the late 2020s. By then, the limitations of renewables generation (particularly to supply large quantities of reliable power to an increasingly urbanised world population) should have become apparent. In the meantime, other countries have to take up the nuclear baton - including (perhaps unexpectedly) the UAE and Saudi Arabia in the Middle East.
Steve Kidd is an independent nuclear consultant and economist with 17 years of work in senior positions at the World Nuclear Association and its predecessor organization, the Uranium Institute.