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Chinese Slowdown May End Nuclear's Last Hope for Growth

Qinshan Nuclear Power Plant

This year has been catastrophic for nuclear power, and just when it seemed the situation couldn’t get any worse for the industry, it did, writes Jim Green, editor of Nuclear Monitor: there are clear signs of a nuclear slow-down in China, the only country with a large nuclear new-build program. According to Green, if this program stalls, nuclear power looks headed for an irreversible decline. Courtesy Nuclear Monitor.

China’s nuclear slow-down is addressed in the latest World Nuclear Industry Status Report and also in an August 2017 article in trade publication Nuclear Engineering International by former World Nuclear Association executive Steve Kidd.

China’s nuclear program “has continued to slow sharply”, Kidd writes, with the most striking feature being the paucity of approvals for new reactors over the past 18 months. China Nuclear Engineering Corp., the country’s leading nuclear construction firm, noted earlier this year that the “Chinese nuclear industry has stepped into a declining cycle” because the “State Council approved very few new-build projects in the past years”.

Kidd continues: “Other signs of trouble are the uncertainties about the type of reactor to be utilised in the future, the position of the power market in China, the structure of the industry with its large state owned enterprises (SOEs), the degree of support from top state planners and public opposition to nuclear plans.”

Over-supply has worsened in some regions and there are questions about how many reactors are needed to satisfy power demand. Kidd writes: “[T]he slowing Chinese economy, the switch to less energy-intensive activities, and over-investment in power generation means that generation capacity outweighs grid capacity in some provinces and companies are fighting to export power from their plants.”

Nuclear power in China may become “a last resort, rather as it is throughout most of the world”

Kidd estimates that China’s nuclear capacity will be around 100 gigawatts (GW) by 2030, well below previous expectations. Forecasts of 200 GW by 2030 were “not unusual only a few years ago,” he writes, but now seem “very wide of the mark.” And even the 100 GW estimate is stretching credulity ‒ nuclear capacity will be around 50 GW in 2020 and a doubling of that capacity by 2030 won’t happen if the current slow-down sets in.

Kidd states that nuclear power in China may become “a last resort, rather as it is throughout most of the world.” The growth of wind and solar “dwarfs” new nuclear, he writes, and the hydro power program “is still enormous.”

Chinese government agencies note that in the first half of 2017, renewables accounted for 70% of new capacity added (a sharp increase from the figure of 52% in calendar 2016), thermal sources (mainly coal) 28% and nuclear just 2%. Earlier this month, Beijing announced plans to stop or delay work on 95 GW of planned and under-construction coal-fired power plants, so the 70% renewables figure is set for a healthy boost.

Crisis in the US

The Chinese nuclear expansion program was arguably the last hope of the nuclear industry to get back on a growth trajectory. Almost everywhere else, the nuclear sector finds itself in heavy weather.

In the United States, the plan to build two AP1000 power reactors in South Carolina ‒ abandoned in July after US$9‒10.4 billion was spent on the partially-built reactors ‒ is now the subject of multiple lawsuitsand investigations including criminal probes. Westinghouse, the lead contractor, filed for bankruptcy protection in March. Westinghouse’s parent company Toshiba is selling its most profitable business (memory chips) to cover the debts of its rogue nuclear subsidiary and to stave off bankruptcy.

The cost of the two reactors in South Carolina was estimated at US$9.8 billion in 2008 and the latest estimate ‒ provided after the decision to abandon the project ‒ was US$25 billion. Cost increases of that scale are the new norm for Generation III nuclear plants. Cost estimates for two French reactors under construction in France and Finland have tripled.

Pro-nuclear commentator Dan Yurman discussed the implications of the decision to abandon the VC Summer project in South Carolina in a September 11 post:

“It is the failure of one of the largest capital construction projects in the U.S. Every time another newspaper headline appears about what went wrong at the VC Summer project, the dark implications of what it all means for the future of the nuclear energy industry get all the more foreboding. … Now instead of looking forward to a triumph for completion of two massive nuclear reactors generating 2300 MW of CO2 emission free electricity, the nation will get endless political fallout, and lawsuits, which will dominate the complex contractual debris, left behind like storm damage from a hurricane, for years to come.

The only other nuclear new-build project in the US ‒ two partially-built AP1000 reactors in Georgia ‒ is hanging on by a thread. Georgia’s Public Service Commission is reviewing a proposal to proceed with the reactors despite the bankruptcy filing of the lead contractor (Westinghouse), lengthy delays (5.5 years behind schedule) and a doubling of the cost estimate (the original estimate was US$14 billion and the latest estimates range from US$25.4‒30 billion for the two reactors).

“Instead of looking forward to a triumph for completion of two massive nuclear reactors generating 2300 MW of CO2 emission free electricity, the nation will get endless political fallout, and lawsuits”

No other reactors are under construction in the US and there is no likelihood of any construction starts in the foreseeable future. The US reactor fleet is one of the oldest in the world ‒ 44 out of 99 reactors have been operating for 40 years or more ‒ so decline is certain.

Six reactors have been shut down in the US over the past five years and many others are on the chopping block. How far and fast will nuclear fall? Here are some estimates:

  • Exelon claims that “economic and policy challenges threaten to close about half of America’s reactors” in the next two decades.
  • A January 2017 article, written by a nuclear industry PR consultant and published by World Nuclear News, states that “as many as two-thirds of America’s 99 reactors could shut down by 2030”.
  • Nuclear Energy Insider claims that 38 reactors will be shut down upon reaching their end-of-licence terms by 2035.
  • A pro-nuclear lobby group states that almost one-quarter of US reactors are at high risk of closure by 2030, and almost three-quarters are at medium to high risk.
  • In May 2017, the US Energy Information Administration released an analysis projecting nuclear’s share of the nation’s electricity generating capacity will drop from 20% to 11% by 2050. The analysis makes heroic assumptions about the longevity of existing reactors so the true figure could be well below 11%.
  • A September 2017 report by S&P Global Ratings estimates that half of the 99 reactors could be taken offline in the next 17 years.

There is some disagreement about how far and fast nuclear will fall in the US ‒ but fall it will. And there is no dispute that many plants are losing money. More than half of the country’s reactors are losing money, racking up losses totaling about US$2.9 billion a year according to a June 2017 analysis by Bloomberg New Energy Finance. A separate Bloomberg report found that expanding state aid to loss-making reactors across the eastern US may leave consumers on the hook for as much as US$3.9 billion a year in higher power bills.

France’s nuclear industry is in its “worst situation ever” according to former EDF director Gérard Magnin

Indicative of their desperation, some prominent nuclear advocates in the US (and to a lesser extent the UK) are openly acknowledging the contribution of nuclear power (and the civil nuclear fuel cycle) to the production of nuclear weapons and using that as an argument to sharply increase the massive subsidies the nuclear power industry already receives. That’s a sharp reversal from their usual furious denial of any connections between the ‘peaceful atom’ and the proliferation of Weapons of Mass Destruction.

Global decline

Elsewhere, the nuclear industry is also in deep malaise and has suffered any number of set-backs this year. Pro-nuclear lobby groups are warning about nuclear power’s “rapidly accelerating crisis” and noting that “the industry is on life support in the United States and other developed economies“.

Lobbyists are warning about a “crisis that threatens the death of nuclear energy in the West” and soon they will be warning about a crisis that threatens the death of nuclear energy in the East. Public support for South Korea’s nuclear power program has been in free fallin recent years, in part due to a corruption scandal. Incoming President Moon Jae-in said on June 19 that his government will halt plans to build new nuclear power plants and will not extend the lifespan of existing plants beyond 40 years.

In June, Taiwan’s Cabinet reiterated the government’s resolve to phase out nuclear power by 2025.

In Japan, Fukushima clean-up and compensation cost estimates have doubled and doubled again and now stand at US$192 billion. Only five reactors are operating in Japan, compared to 54 before the March 2011 Fukushima disaster.

India’s nuclear industry keeps promising the world and delivering very little ‒ nuclear capacity is 6.2 GW and nuclear power accounted for 3.4% of the country’s electricity generation last year.

Rosatom’s deputy general director Vyacheslav Pershukov said in June that the world market for new nuclear power plants is shrinking, and the possibilities for building new large reactors abroad are almost exhausted

France’s nuclear industry is in its “worst situation ever” according to former EDF director Gérard Magnin. The only reactor under construction in France is six years behind schedule, the estimated cost has more than tripled from US$3.9 billion to US$12.4 billion, and the regulator recently announced that the pressure vessel head of the reactor will need to be replaced by 2024 following a long-running quality-control scandal. The two French nuclear utilities face crippling debts (US$44.2 billion in the case of EDF) and astronomical costs (up to US$118 billion to upgrade ageing reactors, for example), and survive only because of repeated government bailouts.

In the UK, nuclear industry lobbyist Tim Yeo says the compounding problems facing the industry “add up to something of a crisis for the UK’s nuclear new-build programme.” The only two reactors under construction ‒ EPR reactors at Hinkley Point in Somerset ‒ are eight years behind schedule.

The estimated combined cost of the two Hinkley Point reactors, including finance costs, is US$35.4 billion (the EU’s 2014 estimate of US$32.5 billion plus a US$2.9 billion increase announced in July 2017). Excluding finance costs, the estimated construction cost for one EPR reactor in the UK was US$2.66 billion in the mid- to late-2000s and that has risen five-fold to US$13.3 billion.

In Switzerland, voters supported a May 21 referendum on a package of energy policy measures including a ban on new nuclear power reactors. Thus Switzerland has opted for a gradual nuclear phase-out and all reactors will probably be closed by the early 2030s, while all of Germany’s reactors will be closed by the end of 2022 and all of Belgium’s will be closed by the end of 2025.

In South Africa, a High Court judgement on April 26 ruled that much of the country’s nuclear new-build program is without legal foundation. There is little likelihood that the program will be revived given that it is shrouded in corruption scandals and President Jacob Zuma will leave office in 2019 (if he isn’t ousted earlier).

Perhaps most worryingly of all for the nuclear industry is that even Rosatom, the ambitious Russian nuclear company that not long ago hoped to export its nuclear reactors all over the world, is not so optimistic anymore. Rosatom’s deputy general director Vyacheslav Pershukov said in June that the world market for new nuclear power plants is shrinking, and the possibilities for building new large reactors abroad are almost exhausted. He said Rosatom expects to be able to find customers for new reactors until 2020‒2025 but “it will be hard to continue.”

Another problem is the ageing of the nuclear workforce. The IAEA recently noted that maintaining and developing a competent nuclear workforce is “among the biggest challenges” the industry faces

Globally, the industry’s biggest problem is the ageing of the current fleet of reactors. The International Atomic Energy Agency (IAEA) estimates that just to maintain current capacity of 392 GW, about 320 new reactors (320 GW) would have to be built by 2050 to replace retired reactors. That’s 10 new reactors each year. A nuclear ‘renaissance’ has supposedly been underway over the past decade yet on average only five reactors have come online each year.

Another problem is the ageing of the nuclear workforce. The IAEA recently noted that maintaining and developing a competent nuclear workforce is “among the biggest challenges” the industry faces.

Comparison with renewables

The International Atomic Energy Agency (IAEA) has released the 2017 edition of its International Status and Prospects for Nuclear Power report series. It states that the share of nuclear power in total global electricity generation has decreased for 10 years in a row, to under 11% in 2015, yet “this still corresponds to nearly a third of the world’s low carbon electricity production.” In other words, renewables (24.5%) generate more than twice as much electricity as nuclear power (10.5%) and the gap is growing rapidly.

Five years from now, renewables will likely be generating three times as much electricity as nuclear reactors. The International Energy Agency (IEA ‒ not to be confused with the IAEA) recently released a five-year global forecast for renewables, predicting capacity growth of 43% (920 GW) by 2022. The latest forecast is a “significant upwards revision” from last year’s forecast, the IEA states, largely driven by expected solar power growth in China and India.

The IEA forecasts that the share of renewables in global power generation will reach 30% in 2022, up from 24% in 2016. By 2022, nuclear’s share will be around 10% and renewables will be out-generating nuclear by a factor of three. Non-hydro renewable electricity generation has grown eight-fold over the past decade and will probably surpass nuclear by 2022, or shortly thereafter, then leave nuclear power in its wake as renewables expand and the ageing nuclear fleet atrophies.

Editor’s Note

Dr Jim Green is the editor of the Nuclear Monitor newsletter, where a version of this article was originally published, and national nuclear campaigner with Friends of the Earth Australia.

Original Post

Content Discussion

Bob Meinetz's picture
Bob Meinetz on October 18, 2017

“The reports of nuclear’s death have been greatly exaggerated.” – Mark Twain (paraphrased)

Jim, be sure to let Georgia Power and Tennessee Valley Authority know nuclear is doomed, is in a state of “deep malaise”, is in “crisis”, is “hanging on by a thread”, faces “crippling debt” and any other ominous hyperbole you’re tempted to imagine.

Georgia Power is enthusiastic, renewing plans to complete Units 3 & 4 at Vogtle (and with plans to build even more). TVA is reaping the rewards of their persistence with Watts Bar Unit 2, and China is full-steam ahead, with 21 new reactors in construction.

You may think my eyes are moistened in sympathy for how antinuclear fear factory “Friends of the Earth”, and their allies The American Petroleum Institute must feel, but no need to worry – mine are tears of joy. It seems all the fear in the world can’t keep robust, clean energy down.

Jarmo Mikkonen's picture
Jarmo Mikkonen on October 18, 2017

The International Atomic Energy Agency (IAEA) has released the 2017 edition of its International Status and Prospects for Nuclear Power report series. It states that the share of nuclear power in total global electricity generation has decreased for 10 years in a row, to under 11% in 2015, yet “this still corresponds to nearly a third of the world’s low carbon electricity production.” In other words, renewables (24.5%) generate more than twice as much electricity as nuclear power (10.5%) and the gap is growing rapidly.

Renewables in this context refer mainly to hydro. Wind and solar generate only half of what nuclear does.

Thorkil Soee's picture
Thorkil Soee on October 18, 2017

I am afraid the credibility of the article suffers badly from the following statement:
I quote
“EPR reactors at Hinkley Point in Somerset ‒ are eight years behind schedule.”
The long delays in decision-making should not be included as “construction time”.
However, in my opinion everything gets too expensive because there is no level playing field.
Yes. Western nuclear is in big troubles.
If you ask “Why?” You may find some of the answer on http://wp.me/p1RKWc-11D

Nathan Wilson's picture
Nathan Wilson on October 18, 2017

China and India, with their coal-dominated grids, have a serious dilemma: as cheap as wind solar have become, when they are combined with coal-fired backup, they cost more than coal-power alone, plus they require a much more expensive transmission system. The problem is much less significant when fossil gas is used for backup, but neither country has large gas production now.

With wind & solar at a combined single-digit penetration, the extra cost can be ignored. But as they grow, their poor economics will start to hurt noticeably.

China for one, has bragging rights as the world’s largest user of wind and solar power, but in fact their penetration is about the same as in the US (because China has such a large electricity demand), so they can afford to simply keep the growth rate low (as a percentage of generation), until the rest of the world recognized the problem with renewables, and nuclear inevitably returns to fashion. In the mean-time expect China, to continue seeking regulatory approval to export their reactors to other countries (e.g. their projects in the UK, Pakistan, Argentina).

Meanwhile in the US, the clean energy market will start to shift substantially, as the four-year extension to Federal wind energy subsidy, which occurred in 2016, comes to an end. Solar is likely to replace wind as the renewable energy favorite; this will be good news for the nuclear industry, since nuclear and solar together makes such a good approximation of the daily demand curve, while minimizing the need for fossil fuel backup.

Roger Arnold's picture
Roger Arnold on October 19, 2017

Nice try, Dr. Green.

I note that Nuclear Monitor bills itself as “The magazine of the global anti-nuclear community”. Cool. Truth in advertising. It’s up front, so we needn’t wonder about where the magazine is coming from or the slant its articles will be taking.

China’s nuclear power pipeline is long and deep; there’s no prospect that it will be running dry any time soon. Pundits have long been reading tea leaves and speculating about where China is headed; China pays them no heed. Its decisions generally appear rational, serving the long term interests of China itself. Fortunately, Beijing hasn’t yet been captured by the sum-zero game mentality that seems to dominate in Washington, London, and Tel Aviv. They don’t see their gains as depending on others’ losses.

Frankly, if I were in the position of China’s leaders, I too would probably be holding back on commits to big PWR starts beyond the many already in the pipeline. Not from any concerns about nuclear power in general, but because the whole energy technology picture is truly in a state of flux. New possibilities are sprouting up, and China can afford to pause and see how things develop. Some of the new possibilities appear to offer better prospects than a massive buildout of current large PWR designs. It’s not as if more PWR builds can’t quickly be injected into the pipeline if alternatives don’t pan out.

China’s policies are expedient, but it believes in hedging its bets. To grow its economy quickly, it built massive numbers of cheap coal-fired power plants. The country is now paying a heavy toll in public health from air pollution, and would like to switch to cleaner energy as quickly as practical. But China is a big country, and electrification of the country as a whole is still in early stages. The quick buildout of coal has created a temporary surplus of capacity. Rather than shutter recently built coal plants to make way for many large new PWRs, it would be economically efficient to replace just the coal-fired boilers in those recently built power plants. Some of the small modular reactor concepts now in development may offer an efficient way to do that.

Or not. We’ll just have to see.

Bob Meinetz's picture
Bob Meinetz on October 19, 2017

Matt, sources of information here are disingenuously quoted by the author to diminish the value of nuclear and hype the value of renewables, hoping that by burying his readers in an avalanche of misrepresentations and obfuscations the value of his argument might, in sum, rise above its parts.

It doesn’t. Green writes

Chinese government agencies note that in the first half of 2017, renewables accounted for 70% of new capacity added (a sharp increase from the figure of 52% in calendar 2016), thermal sources (mainly coal) 28% and nuclear just 2%.

A reputable reporter might observe Chinese nuclear generation has tripled in the last seven years, and provide a link to his source: “Chinese government agencies”. Green does neither, instead cherry-picking the first half of 2017 and linking to a renewable energy promotional website (which doesn’t link to Chinese sources either). Once again we’re taken down the rabbit hole of lies and dead-end talking points which form the crumbling foundation of renewables activism.

I had to laugh when I saw Green quoting the “World Nuclear Industry Status Report”, written by anti-nuclear activists Mycle Schneider and Antony Frogatt. At one time of some reknown in the antinuke community, these two have no training in physics, engineering, climatology, or any other discipline which might qualify them to speak out on energy/environmental issues. Like many of their kind, their reputation seems to be the result of creating new titles for themselves, and generating a non-stop fountain of dogma which can’t be refuted fast enough.

Like others, they’re members of a privileged class whose lives have never been threatened by a lack of reliable energy. Their message is an insult to those whose lives depend on it.

Mark Pawelek's picture
Mark Pawelek on October 19, 2017

(1) According to the BBC (this morning), Chinese economic growth this year is running at over 6% p.a. (2) The ruling committee of the Chinese Communist Party are mostly educated in engineering. So they are a bit Gung-Ho on technology and economic growth. (3) The Chinese will not cede the world market in nuclear reactors to Russia. That’s 3 good reasons why Jim Green’s forecast is not quite right.

The “World Nuclear Industry Status Report” has shown itself to be an unreliable document in the past. I see many of authors of past WNISR documents continue to author the most recent report. With no new blood to give a different point of view. I can’t help but feel it is another politically slanted, green movement/anti-nuclear power/100% renewable energy, report. It’s a shame the authors of the WNISR can’t break out of energy tribalism. Likewise Jim Green.

I don’t think we will see much growth in nuclear power until some less expensive technology, such as molten salt reactors, is launched. The cost of nuclear power is currently too high. About the only thing I agree with the WNISR on. Whereas Jim hopes nuclear power will continue to be over-expensive and eventually die; I hope it gets cheaper and takes over world electricity generation. Que Sera, Sera.

PS: “Uncertainties in the kind of reactor which will be developed in future” points to new designs and new technologies in the pipe line. A good thing if those are better, as I expect. Jim is definitely a glass ¼-full person. What others see as an opportunity for better nuclear power, he sees as the final nuclear drought.

Mark Pawelek's picture
Mark Pawelek on October 19, 2017

Being such a low emitter of CO2, one thing in favour of nuclear power is the unfulfilled promise of renewables (RE). RE is not dispatchable, and is highly variable. So it depends on fossil fuels (coal, diesel or gas). This leads to RE being both: (1) Too pricey when an electricity grid has large amounts installed. German consumer electricity prices are some of the highest in the EU. They have 115 GW of RE (50GW of solar and 65GW of wind); and (2) RE makes little impact of CO2 emissions. Despite their massive RE capacity, German carbon dioxide (CO2) emissions are unchanged from 2009. In contrast, most other EU countries continued to cut their CO2 emissions in recent years.

Consequent of the high prices and black-out/brown-out threats brought to use by variable energy, RE will no longer be able to freeload dispatchable power. In USA, the DoE want to bring in a resiliency pricing rule. UK now pays dispatchable providers to stay open; especially over winter.

Nuclear power is the only mass-deployable, “non-CO2 emitting” technology we have.

PS: I might have left out the dissing of RE, but Jim brought it up. So I had to correct him.

michael fellion's picture
michael fellion on October 19, 2017

This is what I do not understand, the left simply is unable to not lie. Planned under construction nuclear power plants worldwide are 60 with 60,000 Mwe as of 11/16, that is not the death of nuclear power.

michael fellion's picture
michael fellion on October 19, 2017

On renewables you get as many different percentages as sources. as on 2014 renewables per wiki is bio mass, wind, solar was 6.3% of total energy production. Wind and solar gave zero energy if the sun was not shining or the wind was not blowing. Bio mass , in Japan , for example is a big business.

michael fellion's picture
michael fellion on October 19, 2017

France closed their reactors for safety inspections and as those are finished they are reopening the power plants.

Sean OM's picture
Sean OM on October 19, 2017

The technological progress in the last 10 years by RE and other technologies has put real market pressure on the whole energy industry, and really all that is left is trying to manipulate the government for funding. The strong arm tactics used by both the coal and nuclear industry for decades are not nearly effective now that there is real market competition.

The competition isn’t going away either. The technological improvements will continue, and prices will continue to decline over the next decade. I am not seeing a whole lot of interest in investing in nuclear or coal over a 50 year period, when in the last 10, solar pv and wind have gone from “it ain’t gonna happen” to “it is cost competitive or cheaper” and batteries aren’t far behind.

The technology is starting to become viable for home users and businesses at this point, so you also can’t do any price gouging errm cost averaging to cover for big mistakes as a utility anymore. You are seeing that in the Australian market right now. The utilities all bet on coal, and their high electric prices plus their low feed-in tariff have resulted in massive amounts of folks installing solar plus batteries. It is a <10 year payback for a home system.

I know it isn't a popular opinion with a nuclear heavy group, but i just don't see it.

Levis Kochin's picture
Levis Kochin on October 19, 2017

Except in Saudi Arabia little petroleum is now burned to generate power to load onto the grid.
The joy with which Georgia power builds nuclear power plants when their allowed rate of return exceeds market interest trates was predicted 55 years ago by

Averch, Harvey; Johnson, Leland L. (1962). “Behavior of the Firm Under Regulatory Constraint”. American Economic Review. 52 (5): 1052–1069. JSTOR 1812181.

Levis Kochin's picture
Levis Kochin on October 19, 2017

The only thing that has been declining more rapidly than the cost of solar power is the marginal value of solar power. Energy turn enthusiasts note that in Germany on Spring mornings and in California at some times of day almost all electric power is from “renewable” sources. What they don’t note is that the power market rewards this solar generated power with a negative price reflecting the fact that at the margin solar power is frequently an economic “bad” in California and Germany which must be disposed of rather than an economic good .