Energy Handbook 2011 - GBR

P o w e r S u m m i t - T h e E n e r g y H a n d b o o k 2 0 1 1
F o c u s : N u c l e a r P o w e r
Developing World Demand
Nuclear technology was born in the
laboratories of North America, western
Europe and the Soviet empire, and these
regions were the first to feed nuclear
power into their grids in the 1950s and
1960s.
In the 1970s and 1980s, however,
the western world was shaken by the
Three Mile Island and Chernobyl events.
The resulting regulatory changes led to
enormous project cost over-runs and
cancellations, and a 30-year lull in nuclear
power investment in this region.
Yet the nuclear industry did not stagnate.
The focus for development of nuclear
plants shifted to new adopters, keen to
diversify their power generation options.
Over the past 30 years the number of
countries employing nuclear power has
grown steadily.
Currently, nowhere is this more true than
in China. According to the World Nuclear
Association, China has the world’s
fastest-growing nuclear programme, with
a target for 2020 of 70 GW in operation
and a further 30 GW under construction.
In other countries, however – Iran being
currently the most notorious example – the
spread of nuclear power is constrained by
political concerns about the proliferation
of nuclear weapons.
Western Renaissance
Since 2001, industry observers have been
increasingly discussing the potential for a
nuclear renaissance across the developed
world. Bans on nuclear development have
been repealed in Sweden and Italy, and
nuclear fleets are being refurbished or
expanded in South Africa, Japan, Ukraine,
the Czech Republic and the USA.
The trend is not universal – Germany and
Spain are uncertain about their nuclear
future and are continuing to phase out
nuclear – but overall the industry is
certainly gaining momentum.
Finland’s Olkiluoto 3 development, for
example, has been plagued by delays,
over-runs and safety concerns. “Nuclear
is ideal for the baseload, because once
it is up and running the operating cost
is very low,” says Tony Masella, Partner
and MD for the Resources Practice at
consultancy Accenture. “However, there
is a lot of debate about whether the cost
of a new build or refurbishment is a good
use of public funds.”
The length of time since the last Western
nuclear plants were constructed means
that the necessary experience may be
lacking.
“The issue that we face in North America
is that we haven’t built one in thirty
years, which causes great uncertainty
in terms of cost,” says Pierre Gauthier,
President, Alstom Canada and USA. “It
is hard to evaluate today what will be the
end cost of a nuclear power plant in North
America.”
Decision-making is made more difficult
by the fact that the cost of natural gas,
although often volatile, is currently low
and looks to stay that way.
“While shale gas is being found everywhere
in huge pockets and being traded at around
$5 a ton the value proposition of nuclear
becomes an even greater challenge,” says
Tony Masella of Accenture. Compared to
nuclear, gas-fired power plants are also
quick to build.
International cooperation
Whether or not nuclear power does see
a western renaissance, the established
nuclear suppliers in these countries see
the global spread of nuclear power as a
great opportunity.
The extension of nuclear power to new
countries is underpinned by international
cooperation. Companies from nations
with expertise are working with aspirants
to provide the technical assistance they
need to take their nuclear programmes
forward.
increasingly globalised. Jean-François
Béland, Executive Vice President at Areva
Canada, says: “It’s a global industry now;
national players no longer exist. Areva
is no longer a French player. We have
employees around the world. It is that
paradigm shift that Canadian companies
are going through now. It is a worldwide
market and it is focused on what is the
most reliable and economically viable
technology for the taxpayer.”
Given that carbon neutrality is one of
nuclear power’s greatest strengths, the
introduction of a globally acknowledged
carbon price would greatly add to the
ability of nuclear energy to compete with
fossil-fuel generation.
“The lack of regulatory certainty regarding
carbon pricing is constraining large capital
investment,” explains Keith Triginer,
Country Executive, GE Energy Canada.
“Unfortunately, large nuclear plants fall
into that bracket. If and when carbon
pricing gets established, I think that will
accelerate large capital investment in
nuclear around the world.”
Next-generation Technology
Nuclear power is generally considered in
terms of four generations of technology
over its five decades. The first generation,
developed in the 1960s and 1970s, is
now rarely operated. Second-generation
reactors were mostly developed in
North America and Europe, and remain
in operation across the world. The third
and fourth generations, now under
development, should make nuclear
power more efficient, safer and easier to
construct.
Though current reactor sizes are typically
around 1 GW, there is a movement
towards smaller, modular reactors to
replace small coal-powered plants.
Michael Lees, President, Babcock & Wilcox
(B&W) Canada Ltd., explains: “We are
developing the B&W mPower advanced
light water nuclear reactor that can
range in the 150–300 MW size. The cost
saving from a large nuclear plant is quite
dramatic, as you move construction and
manufacturing into a shop environment
to create complete, road transportable,
This strategy reduces
construction
risk
significantly, not least by
allowing utility companies
to replace a single large
facility with a number of
smaller modules. “We hope
to have sales in the US
within the next decade,”
says Michael Lees.
Given the increased risk
associated with being
an early adopter of new
technology, some people
think that the renaissance
will only really gain speed
once the next generation
of reactors is already
up and running. “I see
an increasing role for nuclear – it’s a
necessity, not a choice, because of
its reliability,” believes Kurt Strobele,
Chairman and CEO of Hatch, a global
engineering firm that is active across the
power industry.
“But it will be a small start. There is a lot
of inertia, and the new projects and new
technologies have not been as successful
as hoped. Once we get past that first
hurdle I think there will be a very fast
climb in nuclear build.”
Questions to be Answered
Nuclear energy is clearly going to play
an increasingly important role in global
electricity generation. The world is driving
towards a lower-carbon economy and
nations are looking for reliable baseload
energy to complement renewable
sources.
The nuclear industry needs not only to
convince the public of its green credentials
but also to show decision-makers that
the economics of nuclear energy can
compete with the other baseload options
available.
To allay the fears of policy-makers, nuclear
technology companies will need to show
that they can build the next generation of
reactors repeatably, efficiently and costeffectively.
If this can be accomplished,
the long-heralded nuclear renaissance
‘‘
I see an increasing
role for nuclear –
it’s a necessity, not
a choice, because
of its reliability.
Kurt Strobele
Chairman and CEO
of Hatch
One of the big concerns for policy-makers
is the lingering risk of large cost over-runs Nuclear power was traditionally a very
on nuclear construction projects, with nationalistic industry, but today’s
billions of dollars at risk.
nuclear companies are now becoming
units.”
seems likelier that ever.
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