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2016 Look Ahead for Nuclear Energy

nuke next year

The outlook for nuclear energy globally is better than expected, but in the US it is a time of retrenchment.

This is the annual look ahead for the global nuclear energy industry. While it is too early to predict whether the high concept promises of the COP 21 climate change conference will translate into concrete being poured for nuclear power stations, there are a number of positive developments.

China will continue to be the world leader in starting and completing new domestic nuclear power plants. It has 30 reactors in operation and 21 under construction. Additionally, China will continue to pursue its export drive with deals in Argentina, Romania, and the UK. Competition from Russia’s Rosatom may be tempered by a lack of capital at plunging oil & gas prices dry up funds to finance new builds in places like Turkey and Argentina.

Political disputes aside, Russia’s Rosatom has been trying, without success, to lay off some of the equity of its planned four 1200 MW VVERs to be built at Turkey’s Akkuyu site on the Mediterranean coast. Conflicting media reports indicate work on the project has been suspended for the time being. The reason is a hot war in on Turkey’s eastern borders complicated by Russia’s military presence in Syria. Similarly, an agreement to build a VVER for Argentina may go on a back burner since that country, which is broke, expects most of the financing to come from Rosatom.

The UK new build, lead by the mammoth and expensive twin EPR Hinkley C project, will move ahead because that nation must replace it current aging fleet of nuclear reactors and its North Sea natural gas reserves are nearing an end. The development of small modular reactors (SMRs) in the UK, both for power generation and for export, could be a significant factor in the global market by the mid-2020s.

China has entered the UK nuclear market with a 33% equity stake in Hinkley C and a commitment from the UK government to help it get its new Hualong One 1000 MW PWR through the Generic Design Review and slated for up to two future new build projects.

US firms NuScale and Westinghouse are investigating supply chain opportunities with an eye, long-term, towards eventual development of SMR factory manufacturing sites in the UK. Rolls-Royce, which has been making the equivalent of SMRs for the UK Royal Navy, is also developing plans to pursue commercial opportunities.

The French nuclear fleet is likely to outlast the politically expedient alliance President François Hollande has made with the Green Party to reduce the nation’s reliance on reactors by 25%.

The French government will recapitalize Areva’s reactor division with help from outside investors most likely Chinese state owned nuclear firms and Japan’s Mitsubishi. Both entities have significant commitments with Areva for multi-billion dollar projects which makes the firm too big to fair.

EDF’s gamesmanship over what it will “pay” for its 51% equity stake in Areva will be buried in the pages of a bureaucratic budget document avoiding the public appearance of a bailout. The reason is over 85% of the stock for both firms is owned by the French government.

Finland will start work to build its sixth and seventh nuclear reactors. One will be the product of a domestic consortium and the other will be a Rosatom supplied VVER. France will settle Areva’s financial liabilities with Finland for the Olkiluoto 3 plant, and Areva will complete it by 2018.

The Czech Republic will decide in 2016 whether it will guarantee rates to support financing of at least two new reactors, one at Temelin and one at Dukovanny. The market lure of selling carbon emission free electricity to coal-dependent Germany, which closed half its nuclear fleet, is too big a deal to pass up.

Austria will continue to try to make trouble for the Czech Republic, but economic trade between the two countries is also a big deal which suggests the anti-nuclear drum rolls from Vienna are mostly intended for domestic ears.

In Romania China General Nuclear Power (CGN)  will invest $7.7 billon in a project to build and operate two CANDU type reactors at Cernavoda. Canada’s SNC-Lavalin will benefit from these contracts having purchased AECL’s reactor division from the government in 2011 for a mere $15 million.

Turkey will continue to pursue development of nuclear power stations at three sites – Akkuyu, a Russian led effort, Sinop on the Black Sea, a joint venture by Mitstubishi and Areva, and at a third as yet to be named site on the western shore of the Black Sea which is likely to be a Westinghouse led effort.

The United Arab Emirates will finish all four of its South Korean built 1400 MW PWRs at the Barakah site on the Persian Gulf by 2020. The first unit is expected to start operations in 2017.

South Africa’s plans to build 9.6 GWe of nuclear power will continue to be embroiled in political controversy and be hobbled by a lack of feasible financial plans to pay for the reactors. Claims by both Rosatom and Chinese state nuclear firms that they have won the business are not credible.

Even if written down on paper, these claims cannot be guaranteed in the long term due to the political twists and turns of South African President Jacob Zuma. Most recently, he burned through three finance minister over differences about whether the country could afford the cost, said to be at as much as $100 billion including upgrades to the electrical grid.  Zuma is plagued by political and personal scandals.

The country remains plagued by brownouts and shutdowns of its heavy industries over a lack of electricity which has, in turn, depressed GDP.

India will continue to thumb its nose at the West while buying its uranium. It has inked deals with Canada and Australia for uranium and must now build an enrichment plant, a conversion plant, and fuel fabrication facilities, to convert the stuff to nuclear fuel.

Areva’s Jaitpur project, for two 1600 MW EPRs, will continue to be mired in local land disputes, environmental permit controversies, and other bureaucratic impediments. No American nuclear firms will do business with India as a result of its draconian supplier liability law driven by coal interests and the nation’s political tilt as a “nonaligned nation.” India will break ground this year for two new Rosatom 1000 MW VVERs at Kudankulam.

India will continue to build 700 MW CANDU type reactors and some, for the first time, allow partnerships between NPCIL and other state owned industries. Two examples are to boost the equity stake in NPCIL by NALCO, the state-owned aluminum company, for a joint venture to power a smelter and finished goods factor and another project with L&T for a heavy steel forgings plant. The latter project is expect to include large forgings for nuclear reactors as one of its product lines.

Japan will continue to restart reactors which are less than 40 years old and which can meet new safety standards set by the now independent Nuclear Regulatory Authority. Of the nation’s remaining reactors, 24 have applied to restart. Possibly as many as six will restart in 2016.

Work to restart of the two newest BWR type reactors at TEPCO’s Kashiwazaki-Karia, a seven reactor power station, will continue in 2016, but overcoming the strident political opposition of Hirohiko Izumida, the provincial governor, will likely make it a slow process.

South Korea will begin pursuing development of spend fuel reprocessing and development of advanced fast reactors now that the crucial umbrella agreement with the US has gotten a new lease on life. The US Department of Energy’s Argonne National Laboratory is an R&D partner in the fast reactor effort.

In the US it should come as no surprise to anyone with a pocket calculator that Entergy will continue to close its cash cow reactors in the US as the price of natural gas continues to make their operation unaffordable in the long run.

In California PG&E will have to decide whether to seek a 20-year license extension from the NRC for its Diablo Canyon reactors. Intense challenges by green groups to knock off the state’s remaining reactor, along with their influence over state regulatory agencies, could make it an uphill battle.

Southern and SCE&G will continue to make progress to complete their construction of Westinghouse AP1000s.  Westinghouse has restructured its supplier pipeline resolving financial liabilities hanging over both projects. Both utilities expect to have all four reactors in revenue service before the end of this decade.

TVA will bring Watts Bar II on to the grid in 2016. The quasi-government utility will continue to keep a wary eye on the potential for new nuclear power investments, but is unlikely to ever complete either of the Bellefonte reactors. TVA will pursue a long-term option for one or more small modular reactors by completing an Early Site Permit application with the NRC for the at the Clinch River site.

NuScale says it has plans to submit its 50 MW SMR to the NRC for a safety design review in late 2016. If all goes well, its first customer, UAMPS, will then apply for a COL to build the first of a kind unit. No site has officially been selected for the reactor project, which could eventually be home to up to 12 50 MW units.

NuScale and UAMPS have explored the possibility of using a site at the Idaho National Laboratory, located 250 miles east of Boise. However, opposition to new nuclear energy projects from two former Idaho governors recently killed an effort by the lab to conduct R&D testing of a small quantity of spent nuclear fuel. This raises a question of what position they would take on new spent nuclear fuel from from the UAMPS power station.

Meanwhile, the legislature in Wisconsin, possibly sensing an opportunity, has put pedal to the metal to overturn its long standing ban on new nuclear power plants.  Idaho’s loss could be Wisconsin’s gain.

Efforts by start-up type firms to build advanced reactors will continue to generate a lot of media buzz. The Third Way, a think tank in Washington, DC, is tracking more than three dozen advanced reactor projects at various stage of maturity. Bill Gates effort with TerraPower will pursue development of a half-scale prototype in China and also will branch out to explore Molten Salt type designs.

Photo Credit: Nuclear Energy Next Year/shutterstock

Dan Yurman's picture

Thank Dan for the Post!

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Bob Meinetz's picture
Bob Meinetz on December 21, 2015

Dan, excellent summary of global nuclear energy markets. Lots of food for thought here, but portentous: 

“China has entered the UK nuclear market with a 33% equity stake in Hinkley C…” 

Being at the mercy of exported sources of fuel has always been an Achilles Heel for island economic powerhouses the UK and Japan. Being at the mercy of the exported technology that turns it into electricity doesn’t make the UK any less dependent; less so, allowing a foreign government ownership interest in generation.

As much as “energy security” is promoted by the fossil industries as justification for cracking rocks and boiling tar sand for hydrocarbons, it would behoove the U.S. to take steps to get back into the game of developing and marketing innovative nuclear technology. Especially if we have any intent of taking COP 21 pledges seriously, and don’t believe dependence on China and a worsening trade deficit won’t have equally serious geopolitical implications for the future.

Mark Heslep's picture
Mark Heslep on December 26, 2015

At what point does an imported good or service turn from the proven advantages of the  division a labor into placing oneself at the “mercy” of others?

Willem Post's picture
Willem Post on December 31, 2015

Mark,

The US has had trade and balance of payment deficits since the mid 60s, plus quite a large share of the US economy and its debt is owned by foreigners.

The means a large quantity of profits, interest, dividends, and capital gains accrue to foreigners.

It is a sorry state of affairs that can continue only because, the dollar is still THE reserve currency. When it is replaced with a world dollar, backed by a basket of currencies, the US will be in a relatively weaker position.

Willem Post's picture
Willem Post on December 31, 2015

Rex, 

With help from the IMF, Ukraine is stiffing Russia, by not paying interest or paying back, on time, a $3 billion, government to government, overdue loan.

Even though in default, by IMF standards, the IMF advanced more funds to the dysfunctional black hole, called Ukraine, one of the most corrupt countries in the world, run by a bunch of oligarchs.

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