Nuclear Power: Is the Renaissance Real or a Mirage? H-Holger Rogner & Alan McDonald International Atomic Energy Agency (IAEA) 1 Keywords: Nuclear power status and projections, nuclear power economics, manufacturing capacity Summary In 2009, in the midst of the global financial and economic crises that began in 2008, and as the nuclear power industry posted its first two-year decline in installed capacity in history, the IAEA revised its projections for future nuclear power growth upwards. This paper summarizes the status of nuclear power in the world today and the status of all steps in the nuclear fuel cycle. It summarizes nuclear power’s prospects and important trends in key factors. It explains the reasons for optimism and rising expectations about nuclear power’s future, and it acknowledges that there is, nonetheless, much uncertainty. Conflicting indicators For nuclear power, 2009 was a second straight paradoxical year. In 2008, pprojections of future growth were revised upwards even though installed nuclear capacity actually declined during the year and no new reactors were connected to the grid. It was the first year since 1955 without at least one new reactor coming on-line. There were, however, ten construction starts, the most since 1987. In 2009 installed nuclear capacity dropped yet again, the first two-year drop in nuclear power’s history, with three reactors being retired and only two new ones connected to the grid. But the IAEA’s projections for nuclear power growth were again revised upward, by about 8%, even as the world was still dealing with the financial and economic crises that started in late 2008. One reason for the higher projections was that construction starts on new reactors also increased. There were eleven new construction starts (see Figure 1), extending a continuous upward trend that started in 2003. 50 40 30 20 Constructionstarts 10 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Figure 1: Construction starts of nuclear power plants by year. Source IAEA, 2010a. 1 IAEA, Wagramerstrass 5, P.O. Box 100, A-1400 Vienna, Austria. Tel +43-1-2600-22776; Email: [email protected] 1 Interest and expectations are high. Since 2004, some 60 countries currently without nuclear power have expressed an interest to the IAEA in exploring or starting nuclear programmes. Countries with phase-out policies have lifted or are considering a reversal of restrictive policies on the use of nuclear energy. But the rising interest must still be translating into new power plants. Reaching the IAEA’s high projection (presented below) would require bringing on-line an average of 22 new reactors each year through 2030. This is much higher than the average of three new reactors connected to the grid each year from 2000 through 2009, and one third higher even than the average of 16 new reactors each year during the 1970s. The reasons for the apparent paradoxes are several. First, the current financial and economic crises have not affected the longer term market fundamentals (or drivers of nuclear energy), most importantly growing energy demands due to population growth and economic development, an interest in stable and predictable generating costs, and concerns about energy security and environmental protection, especially climate change. Second, the financial and economic crises have had a more pronounced impact on projects with short lead times. The prospect of lower demand growth in the near term reduces the pressure for near term investment decisions, and the long lead times associated with nuclear projects allow for additional analysis and less rushed preparation. Put differently, the current crises hit most nuclear projects in the early planning stages, years before key financing decisions would have to be made. Hence only a few nuclear expansion plans have been postponed or cancelled, and the order pipelines remain filled. Third, investment costs for non- nuclear generation options have also increased, and the relative economics of electricity generation options have been realigned only marginally, if at all. This is not to say that the global financial and economic crises left the nuclear power business unscathed. It was cited as a contributing factor in near term delays or postponements affecting nuclear projects in some regions of the world. Vattenfall announced in June that it was putting decisions on nuclear new build in the UK on hold for 12–18 months, citing the economic recession and market situation. Financing uncertainty was cited in connection with the withdrawal of the utilities GDF SUEZ and RWE from the Belene project in Bulgaria. The Russian Federation announced that for the next several years, because of the financial crisis and lower projected electricity use, it would slow planned expansion from two reactors per year to one. Ontario, Canada, suspended a programme to build two replacement reactors at Darlington, partly because of uncertainty about the future of Atomic Energy of Canada Limited (AECL). The Canadian Government had reported it planned to seek buyers for AECL to reduce budget deficits. In the USA, Exelon deferred major pre-construction work on a proposed new nuclear power plant in Texas, citing uncertainties in the domestic economy. Of 17 combined license applications before the US NRC, 4 were put on hold in the course of 2009 at the request of the applicants. In South Africa, Eskom extended the schedule for its planned next reactor by two years to 2018. In contrast, China saw nine construction starts in 2009 after six construction starts in 2008. It appears that as utilities elsewhere dragged their feet in following through with nuclear plant and equipment orders, China seized the opportunity and moved ahead in the queue and negotiated attractive terms. As the year 2009 drew to a close, the United Arab Emirates (UAE) announced their signing of a contract to purchase four 1 400 MW(e) reactors from a South Korean consortium led by the Korea Electric Power Corporation (KEPCO). About a dozen countries currently without nuclear power are continuing preparations to start their first nuclear power plants by the early 2020s while an even larger number are familiarizing themselves with the prerequisite nuclear infrastructure requirements. In short, while the prospects for nuclear power now are brighter than at the turn of the millennium, uncertainty remains about whether and when all the high ambitions will be realized. 2 Government policies and private sector risk perception remain decisive factors shaping the future of nuclear power. Nuclear Power Plants in Operation and Under Construction As of 1 June 2010, there were 438 nuclear power reactors in operation worldwide, totalling 371.7 GW(e) of generating capacity (see Table 1). This is almost identical to the peak of 2007 due to closures of plants in Lithuania and Slovakia (integral parts of the EU accession agreements) as well as in Japan and France (after more than 30 years in service), no grid connections in 2008 and only little more than 1 GW(e) of new capacity additions in Japan and India. Since the turn of the millennium, the global nuclear generating capacity has grown on average by 0.5% per year compared with an overall global generating capacity expansion of almost 4% per year. The global fleet of nuclear power plants produced between 2 544 TWh and 2 661 TWh of electricity per year. The 2009 production of 2 558 TWh translates into a market share of 14 percent, i.e. every seventh kilowatt-hour produced in the world was generated by nuclear power. The market share has been declining slowly but consistently since the turn of the millennium as overall electricity generating capacity has grown faster than nuclear power and the temporary unavailability of several reactors, such as those at the 8.2 GW(e) Kashiwazaki-Kariwa nuclear power plant in Japan, which was shut down in July 2007 after a major earthquake. After in-depth safety inspections and seismic upgrades, two of the seven were restarted and connected to the grid in 2009. Moreover, the past increase in availability factors, which helped keep the nuclear share relatively stable during the 1990s despite limited investment in new build, appears now to have plateaued (see Figures 2 and 3). The low hanging fruit of streamlined plant services and maintenance scheduling, improved plant operation and management, higher burn-up and shorter refueling down-times has been harvested, and further increases in load factors have become more difficult to achieve. 90 45 2,700 Total nuclear electricity in generationelectricity TWh nuclear Total 40 2,400 85 82.2 81.9 82.1 35 2,100 81.0 81.1 79.6 79.6 80.0 79.8 80 78.4 78.7 30 1,800 75.4 75.7 25 1,500 75 73.7 74.3 20 1,200 71.2 70.1 70.2 70.5 GWe 70 15 900 Percent 66.8 10 600 65 5 300 60 0 0 Incremental nuclear power capacity additions in capacitynuclear in additions powerIncremental -5 -300 55 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 Figure 2: Development of the load factor of the global Figure 3: Annual incremental nuclear fleet of nuclear power plants. Source: IAEA, 2010a. capacity additions and nuclear electricity generation. Source: IAEA, 2010a. A total of 55 reactors were under construction on 1 June 2010, the largest number since 1992. Altogether, the plants under construction represent 50.9 GW(e) of nuclear generating capacity. More than half of the construction starts occurred since 2007 (see Figure 1). Note that most of the plants under construction are scheduled to be connected to the grid over the next 4 to 6 years and thus are not yet reflected in the incremental capacity additions of Figure 3.