The End of Civil Nuclear Power?

The World Nuclear Industry Status Report 2018 published by Mycle Schneider in September presents a hard-hitting critique of the status of and prospects for nuclear power. 

There are currently 31 countries operating 413 reactors (excluding reactors on “Long-Term Outage”), 25 fewer than the 2002 peak of 438, and total installed capacity now stands at 363GW.  Capacity and production are dominated by the “Big 5” of the USA, France, China, Japan and South Korea who generate 70% of nuclear electricity in the world.

However, production only grew by 1% in 2017 and an 18% increase in Chinese nuclear production otherwise masks an ongoing decline. The nuclear share of the world’s power generation remained almost stable over the past five years, with 10.3 per cent in 2017, which markets a long-term declining trend from a historic peak of about 17.5 per cent in 1996.

15 countries have 50 reactors with a combined capacity of 48.5 GW under construction, the lowest numbers in a decade and comparing with a peak of 234 in 1979. Only four new reactors were commissioned in 2017 (3 in China and 1 in Pakistan).  The average reactor age is now 30 years with 77 units at age 41 or more.

An interesting territory to watch is India which has 5 reactors under construction as it wrestles with the challenges of supplying enough energy to power its economic growth as it heads to 5th place in global GDP in 2019 and second place in 2050.

While the nuclear industry makes a strong case for an essential role in the climate change challenge it is continuing to grapple with the long-standing challenges of construction and decommissioning costs and periods and public safety concerns from the legacy of Fukushima, Chernobyl, Three Mile Island and Windscale, the greatest challenge of late has come from competition from the striking cost reductions being achieved in solar and wind power.

The report quotes Lazard “levelized cost of energy” comparisons which US$112-143/MWh for nuclear power against US$30-60/MWh for onshore wind, US$43-48/MWh for solar PV, US$42-78/MWh for combined cycle gas and US$60-143/MWh for coal.

It should, therefore, be no surprise that US$280 billion was invested in new renewables capacity commissioned in 2017 compared with US$16 billion in nuclear capacity and the report concludes: “there is every reason to believe that renewables will, in virtually all markets and systems, be the preferred option over nuclear power. Furthermore, renewables are now also the preferred source of power in most cases over fossil fuels.”

So, will nuclear power hang on?  This may depend on whether nuclear baseload capacity and energy mix/balance security arguments will out way “only cost matters” government policy decisions. The report raises the controversial issue of the magnitude of public provision for a shared civil and military strategic base in education, skills, research and key industrial and supply chain capabilities and specific reference is made to the crossover between small nuclear reactors for civil use and nuclear submarine systems. On the futuristic level, will commercially feasible fusion reactors emerge and change the dynamics?

From a supply chain point of view, the best bet in the next 5 years appears to be to focus attention on the life extension and decommissioning skills and capabilities which the industry is going to need.