atw Vol. 63 (2018) | Issue 8/9 ı August/September
434
INSIDE NUCLEAR WITH NUCNET
A Stark Warning to Trump on China, Russia
and the ‘Crisis’ Facing US Nuclear Industry
NucNet, David Dalton
The US has the largest number of nuclear plants in the world – 99 in commercial operation at the time of
writing – but its global leadership position is said to be declining as efforts to build a new generation of
reactors have been plagued by problems, and aging plants have been retired or closed in the face of economic,
market, and financial pressures.
A recent report by the Washington-based think-tank the
Atlantic Council issued a stark warning, arguing that the
US nuclear energy industry is facing a crisis that the Trump
administration must immediately address as a core part of
its “all of the above” energy strategy that is intended to
herald an era of American energy dominance, with tens of
billions of dollars to be spent on drilling and construction
of pipelines, processing plants and liquefied natural gas
export terminals. The administration might be bullish on
energy policy, but the nuclear industry is worried.
Six US nuclear plants have been shut down permanently
since 2013 and 12 more are slated to retire over the
next seven years. The Washington-based Nuclear Energy
Institute, which represents the nuclear industry in the US,
says the US electricity grid is enduring “unprecedented
tumult and challenge” because of the loss of thousands
and thousands of megawatts of carbon-free, fuel-secure
generation that nuclear plants represent. Closing nuclear
plants makes electricity prices go up and is putting
emissions reduction targets hopelessly out of reach, NEI
president and chief executive officer Maria Korsnick said.
The Atlantic Council says the decline of the nuclear
power industry in the US is “an important policy problem”
that is not receiving the attention it deserves. The report
was made public in the same week that Ohio-based utility
FirstEnergy announced plans to permanently shut down
its three nuclear power stations – Davis-Besse, Perry and
Beaver Valley – within the next three years without some
kind of state or federal relief.
The nuclear industry has long argued that electricity
markets should be reformed to recognise the ability of
traditional baseload generation with onsite fuel supplies –
including nuclear power plants – to provide grid resiliency
during extreme events like hurricanes or extreme winter
weather.
To save financially-ailing nuclear plants, state legislatures
in Illinois and New York last year approved subsidies to keep
nuclear plants operating after utilities made appeals about
protecting consumers and jobs. But other proposed bailouts
of nuclear plants have stalled in New Jersey, Connecticut,
Massachusetts, Ohio and Pennsylvania. In Minnesota, the
state legislature is considering a bill that would help Xcel
Energy, owner and operator of the Monticello and Prairie
Island nuclear stations, plan for the high costs of maintaining
old nuclear power plants. The proposed legislation would
give utilities earlier notice about how much money they could
recover for costly work, Minnesota Public Radio reported.
The Atlantic Council report says nuclear power should be
elevated in the Trump administration’s national security
strategy because nuclear is an important strategic sector, and
US global leadership and engagement in nuclear power are
“vital to US national security and foreign-policy interests”.
It also argues that nuclear power is an important
component of a diversified US energy mix, but notes that in
sharp contrast to developments in the US, China and Russia
are pushing to expand their nuclear industries, develop
complete fuel cycles, and build and commercialise new
reactors for both domestic and international markets. The
results of these efforts are striking – nearly two-thirds of the
new reactors under construction worldwide are estimated to
be using designs from China and Russia, countries that have
the advantage of using “state- monopoly and authoritarian
systems” to advance nuclear energy for geopolitical means.
China has the largest nuclear construction programme
in the world by far, with 20 of the 53 total reactors under
construction worldwide. The 13 th Five-Year Plan (2016 to
2020) calls for 58 GW of nuclear capacity online by
2020 to 2021, and an additional 30 GW under construction
at that time.
But what is really worrying the US nuclear industry is
the success of China’s nuclear strategy to establish joint
ventures with Western companies (Toshiba-Westinghouse,
Framatome-Areva, SNC-Lavalin, Energoatom) to build and
evaluate different technologies (AP-1000, EPR, Candu,
VVER-1000), and to incorporate this experience into its
own indigenous designs. Although cost estimates are
difficult to obtain, China has seemingly been able to build
reactors quicker, and at lower cost, than the US, Europe,
and even South Korea, the report says.
China brings a complete package of design, construction,
labour, technology, and financing, which improves
the economics compared to industries in the West.
Both China and Russia offer attractive financing
packages to fund these projects. China goes into markets
abroad with financing options from its Export-Import
Bank, while Russia uses resources from both the Russian
state budget and the Russia Wealth Fund.
In contrast, says the NEI, the US Export-Import Bank’s
board of directors remains without a quorum and as a
result cannot consider medium- and long-term transactions
exceeding $ 10 m. Typically, commercial nuclear
deals are measured in billions of dollars, not millions:
Turkish President Tayyip Erdoğan said that the investment
in the country’s first nuclear power plant, being built by
Russia’s Rosatom, will exceed $ 20 bn.
While China’s relationship with nuclear power is
relatively new – with its first nuclear plant completed in
1991 – Russia’s long history with nuclear power dates to
1954, when the first reactor was commissioned in Obninsk.
The industry has since grown to 37 reactors in commercial
operation and five under construction. Nuclear generation
reached a record of 196.3 TWh in 2016, accounting
for 17 % of domestic electricity generation, and further
increased to 202.868 TWh and 19.9 % in 2017.
Inside Nuclear with NucNet
A Stark Warning to Trump on China, Russia and the ‘Crisis’ Facing US Nuclear Industry ı NucNet, David Dalton
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