atw 2018-09v3

inforum

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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