Many of the age-old arguments being used to renounce the nuclear renaissance fail to address the structural changes that have occurred in the industry in the last 20 years.
The increasing interest in nuclear power that is currently being experienced around the world is reflected in a huge increase in media interest. After years of neglect, journalists are at last beginning to cover nuclear issues and plans well beyond the usual negatives everyone has become so familiar with. But behind this rising popular coverage is a much increased interest in what may be described as intellectual circles, typically in university departments, research centres and the like. Some of this interest reflects an attempt by weakened anti-nuclear forces to attach a final degree of credibility to their largely bankrupt arguments, but there are a number of studies of key nuclear issues beginning to appear from very credible and seemingly independent bodies. Such interest is certainly very welcome to the nuclear industry, which feels it has nothing to hide and can only benefit from serious discussion and debate. Nevertheless, some of the publications originating from such research projects arguably suffer badly from a serious deficiency. This is that they seem to be caught in something of a time warp, describing a nuclear sector that continues to be dominated by issues from the 1970s and 1980s.
Author Info: Steve Kidd is director of strategy & research at the World Nuclear Association, where he has worked since 1995 (when it was the Uranium Institute). Any views expressed are not necessarily those of the World Nuclear Association and/or its members.
Typical of this is a three-and-a half-year Nuclear Energy Futures Project led by Canada’s Centre for International Governance Innovation (CIGI), a private ‘think tank’ which has worked extensively with federal and provincial governments. In February 2010 it issued its final report, The Future of Nuclear Energy to 2030 and its Implications for Safety, Security and Non-Proliferation. The project was conducted in partnership with the Canadian Centre for Treaty Compliance (CCTC) at the Norman Paterson School of International Affairs at Carleton University in Ottawa. In addition to the final report, project outputs include 11 research papers, an online Survey of Emerging Nuclear Energy States (SENES) and ‘A Guide to Global Nuclear Governance’, a useful guide to international nuclear treaties, organisations, initiatives and networks. [The reports are on www.neimagazine.com/cigi]
The research papers contain a large amount of useful material, but several suffer from not reflecting the latest situation – notably the one on India, which (correctly) highlights the failure of that country to achieve its expansive nuclear plans in the past, but then fails to explain sufficiently how this may be overcome by the significant changes in its access to outside nuclear materials and technology, very much apparent now.
Turning to the summary report, the general conclusion is that a significant worldwide nuclear energy expansion is unlikely before 2030 owing to a number of constraints faced by both existing and aspiring nuclear states, which will hold back development. These include
• Unfavourable economics compared to other energy sources
• Fewer government subsidies
• Long development timescales that prevent addressing climate change, and prevent competition with cheaper alternative climate change solutions
• The growing obsolescence of the traditional model of electricity generation and distribution by demands of energy efficiency
• Industrial bottlenecks and personnel shortages caused by the long-term nuclear sector decline
• Lack of a nuclear waste site
• Growing public fears about safety, security and nuclear weapons
• Additional constraints facing developing countries, including inadequate infrastructure, poor governance, deficient regulatory systems and finance.
This list is very familiar to everyone well-versed in nuclear matters. The points made against the likelihood of a rapid expansion of nuclear in many emerging countries are well-made and are certainly shared by many within the industry. It is reasonable to believe that a significant nuclear renaissance in the current nuclear countries is essentially a precondition for its spread to many new countries. There will be examples, such as the UAE, where there is sufficient finance available to buy in both technology and regulatory expertise from outside, but most of the 60 or so countries considered by the International Atomic Energy Agency (IAEA) as seriously interested in nuclear programmes are many years away from achieving them. Yet it is in discussion of the other issues that the report is locked in something of a time warp.
Its outmoded thinking can be seen in its five-part action plan recommending specific steps the international community should take to:
(1) Ensure all states are committed to and capable of implementing the highest nuclear safety standards
(2) Ensure all nuclear material and facilities are secure from unauthorised access or terrorist seizure or attack
(3) Ensure that a nuclear revival does not contribute to weapons proliferation
(4) Reinforce the centrality of the IAEA through increased funding, modernisation and reform
(5) Ensure that all stakeholders, especially industry, participate in judiciously managing a nuclear revival
It ends with a proposed ‘grand bargain’ according to which states that aspire to nuclear power would have to agree to the highest international standards for avoiding nuclear accidents, nuclear terrorism and diversion of materials to nuclear weapons. As for existing advanced nuclear states, if they want newcomers to comply with a newly strengthened global regime not in place when the first NPPs were built, they would have to multilateralise the fuel cycle and disarm their own nuclear weapons as well.
There is clearly a contradiction between the conclusion that few new countries will achieve nuclear power over the next 15 years or so and the focus on such issues. Although the current international regimes are arguably far from perfect, is there really a big problem today on safety, security and non-proliferation? The attention given to these issues over the past twenty or thirty years has definitely borne fruit. The safety record of the nuclear sector is extremely good since Chernobyl. There are certainly recorded incidents of nuclear trafficking, but they have not led to any terrorist incidents. The international non-proliferation regime has arguably been very successful in preventing many further countries acquiring nuclear weapons, with the exceptions of Iran and North Korea. It is unlikely that there will be additional risk in the areas most likely to benefit from the nuclear renaissance, countries with existing power reactors. Indeed, the opposite–that nuclear security will spread–is surely likely to be the case, given the strengthened provisions that are already being introduced.
The fuel cycle is a good case in point; all the talk about ‘multilateralisation’ misses the point that it is already multilateral. Enrichment and reprocessing plants are concentrated in a small number of states and support an international market in nuclear fuel. It is unlikely that such facilities will spread to many new states as technology and economies of scale tend to keep them concentrated in a few locations. Any new nuclear states are almost certain to make use of the established highly competitive markets that ensure secure and economic supply.
CIGI and other analysts and commentators depict the nuclear business as so special that normal rules of industrial development don’t exist. They see it as remaining very much state-dominated, with huge attention needing to be paid to the international regimes. But the nuclear renaissance is almost certain to fail unless the industry throws off these shackles from the past and becomes much more like any other sector. While it is true that the industry and the governmental bodies need to work closely together and that the state will continue to play a major role in many nuclear programmes, the nuclear industry has to become fully commercial over the next period in order to achieve full success.
Within the fuel cycle, it has already gone a long way down this road. When the uranium price rose sharply in the 2003-2007 period, suddenly over 400 so-called junior uranium companies emerged, raising money on stock markets in order to explore for uranium and hopefully eventually develop future mines. The conversion, enrichment and fuel fabrication sectors are highly competitive, with a choice of suppliers for each customer. Years of low prices in the 1980s and 1990s led to concentration of production in low-cost and efficient facilities. There remain trade and transport issues that bear on the business, but these are arguably less significant than before. They point towards as free and fair a world market as is achievable within nuclear.
Elsewhere within the industry, a lot of progress still needs to be made. The supply of new reactors is arguably ripe for substantial rationalisation to a limited number of companies offering a small number of standardised designs, to be built in large numbers in different countries. The lack of reactor orders since the 1980s in the west has led to corporate realignments. This must still have much further to go. An upsurge in orders will, in the short term, allow some vendors to remain in the business for longer, but eventually the need to get capital investment costs of new reactors down to more realistic levels will lead to more radical developments.
The key in this process is getting a large number of orders and beginning to manufacture reactors in volume. Then, as private companies see the advantage of investing in new facilities, the supply chain for reactor components will then develop. We are beginning to see this in China, with 21 reactors now under construction and many more at the planning phase. CIGI gives inadequate coverage to the Chinese market and its potential development. India is likely to follow the Chinese pattern, with tens of reactors under construction at one point, and the experience in these countries will spread elsewhere.
In summary, the biggest problem with CIGI and similar analysts is that they don’t understand how industries develop over time – or if they do, they ignore this by seeing the nuclear sector as completely different. Governments will continue to have an important role to play in setting the planning and regulatory framework for nuclear. The international regimes need evolutionary (but not revolutionary) development. Then they should get out of the way, as far as possible, and allow the industry to develop as unencumbered by rules and regulations as is possible. Some maturity is required in this. It should not be impossible, for example, for the industry to question seriously whether regulations on radiological protection, reactor licensing and waste management are justified, without there being an accusation that it is being cavalier with safety.
If governments believe that nuclear is very important in ensuring secure and environmentally-friendly electricity, they need to allow industry development to be led by private investment seeking profit. The United Kingdom provides something of an experiment in this. Although no government subsidy will be available, the new reactors that are planned will benefit from the experiences of building similar units in other countries, and a domestic supply chain is already developing. The companies involved should eventually join an international supply chain, on the lines of the aircraft manufacturing and other arguably similar sectors. But this is going to take time. China and India can provide a lot of business but new reactor orders are necessary in many established nuclear markets. Any weaknesses of major reactor component and workforce availability will then be overcome by normal commercial forces. The key word in all of this is ‘confidence’. This attribute is needed by all the stakeholders; we know that nuclear projects are inherently risky, but the industry needs to look forward and be optimistic. If CIGI would look at the nuclear sector again in five or ten years, it would see some major changes.
Author Info: Steve Kidd is director of strategy & research at the World Nuclear Association, where he has worked since 1995 (when it was the Uranium Institute). Any views expressed are not necessarily those of the World Nuclear Association and/or its members.