Steve Kidd column

Ran across this sobering column by Steve Kidd, nuclear industry consultant and former Deputy Director General of the World Nuclear Association:

Nuclear Intelligence Weekly
September 4, 2015

MARKET INSIGHT
Will Nuclear Power Continue to Stagnate Through 2030?

In his latest Market Insight column, Steve Kidd of East Cliff Consulting
examines the demand side of the uranium market equation: will the
global appetite for uranium expand or contract over the next 15 years?

An earlier Market Insight argued that what we commonly refer to as
the world uranium market, centered on demand from North America,
Western Europe, Japan and South Korea, has entered a zero-growth era
(NIW Jun.5’15). This may last all the way to 2030. To the extent that
there is any expansion in nuclear power, this will happen almost exclusively
in China and in areas well-served by the Russians, where the traditional
uranium vendors have little chance of making substantial
inroads. Hence the conventional analyses of global supply and demand,
such as in the World Nuclear Association’s (WNA’s) biennial fuel market
reports, are rather misleading.

Even the view that the global requirements for uranium will rise
substantially by 2030 could be under threat. One warning is that despite
the regular bouts of optimism that all commodity markets are prone to
(together with the counterbalancing moments of deep despair) the
demand for uranium has remained essentially constant since 2000. In
this time, nuclear power’s share of global power generation has fallen
sharply. At the millennium, it represented 16%-17% of world electricity,
but has since fallen back sharply to 10%-11%. Part of this was due
to the Fukushima accident in March 2011, but the share had already
fallen substantially before then.

The simple reason for the fall is that electricity demand has been
growing steadily, but nuclear has been “marking time” with the number
of reactors in operation remaining almost constant. Hence uranium
demand has been stable. Units that have closed for whatever reason,
technical, political or economic, have been replaced by new reactors​

(notably in China in recent years) but by no more than that.

Looking forward, despite the many forecasts that point to sustained
growth of nuclear, we know that there will be a substantial number of
reactor closures. This is mainly because the average age of the reactors
already in operation is now approaching 30 years. Licensed extensions
beyond 40 years are already a reality in some countries (notably the
US) but this aging cannot be ignored. Although impositions of limitations
on the operating lives of reactors may often be politically rather
than purely safety-driven, they are a reality today (for example in
Belgium and Switzerland). Others, for example Ontario Power
Generation’s six Pickering units in southeast Ontario, Canada, need
such substantial expenditure to extend their operating lives that it is
deemed not worthwhile.

Closures for economic reasons are increasingly worrying. Electricity
markets are changing rapidly and grids are getting integrated. The
incursion of cheap shale gas and lots of renewable power is beginning
to cause acute problems for today’s operating nuclear units. Loadfollowing,
which is economically sub-optimal, will become essential
for some reactors to continue. Even where production costs are maintained
at low levels, revenues become unstable and reactors can start
losing money. Incentives for zero-carbon and reliable operation are​

found to be insufficient. It is almost certain that further units in the US

will close for these reasons. In Europe, the same is likely to happen as
the renewable power input surges upwards. Politically inspired taxes
hurting nuclear are another factor. In Sweden, for example, four older​

and smaller units are likely to close by 2020 (NIW Jun.26’15).

We have learned one thing for certain: it’s a lot easier to shut a reactor
down than to build a new one. There are alternatives to nuclear for
power generation and the competition is getting continuously stiffer.
Hence well-researched and articulate critiques against the concept of
any nuclear growth (and notably of nuclear playing a substantial role in
mitigating climate change) such as the annual World Nuclear Industry
Status Report, are becoming increasingly difficult to ignore (NIW
Jul.17’15). The combination of aging operating reactors, delayed construction
plans combined with escalating costs of new units and competition
from renewable power technologies is becoming a compelling
story to any lay reader.

Whether the number of reactor start-ups exceeds the number of
closures depends on China. Over the next few years, the number of
start-ups (five to six per annum) combined with Japanese reactors
returning to service should certainly outweigh the number of closures.
But in the 2020s things get more unpredictable for both closures and
start-ups. Most people’s expectations of Chinese growth in nuclear
have been cut back substantially. The slowdown in approvals for new
construction starts is worrying, as are a variety of other issues such as
problems with the initial Generation III reactor construction programs
and regional power market issues (NIW Aug.21’15). Russia’s domestic
program has also slowed, while many of the claimed reactor export
deals are little more than statements of intent. India remains something
of an enigma, but it shows few signs of overcoming general
problems in completing major infrastructure projects, including local
land rights and volatile public opinion.

The optimistic view that nuclear will eventually take up the substantial
place allocated for it in energy scenarios that mitigate climate
change (e.g. some of the scenarios in the International Energy Agency’s
World Energy Outlook or the main case in the IEA/OECD-NEA
Technology Roadmap - Nuclear Energy) holds increasingly little water.
The “Paradigm of Fear” that has dominated the nuclear industry since
the 1950s remains undimmed. The WNA and national nuclear associations
have failed since Fukushima to embark on substantive programs
to achieve better understanding (and regulatory understanding) of low
incremental levels of radiation exposure. While people are afraid of
nuclear power, it cannot prosper, even in centrally planned economies
with less democratic political systems. The way people use modern
communications technologies means that a scary technology cannot be
imposed from above.

However, this fear is not irrational, as people only believe what
they’ve been told over the last 60 years by the mass media, in movies
and throughout other popular culture. The industry’s attempts to counter
this by websites, news services, third-party advocacy and appeals to
reason and rationality have been shown to be essentially worthless.
Relying on climate change to bail out the industry at the talks in Paris in​

December will result in nuclear getting marginalized once again.

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