News in Depth: Reflecting on the World Nuclear Industry Status Report

INTRODUCTION

In this week’s News in Depth, we take a look at the World Nuclear Industry Status Report 2015, linked here (and reported on by Katherine Tweed at The Energy Collective). The report’s author’s lay out a number of statistics and cover developments in nuclear energy around the world, concluding that innovation is lacking and progress slow. We will look at some of the report’s key findings in brief here and hope that you, the readers, can voice your feedback on the report and its findings.

THE REPORT’S FINDINGS

To start, here is a selection of key points from the report:

  • Nuclear plant construction starts plunge from fifteen in 2010 to three in 2014
  • Three quarters of all reactor construction projects worldwide are delayed. Five units have been “under construction” for over 30 years
  • The share of nuclear power in the global electricity mix is stable at about 11% (and has been for three years now)
  • Since 1997, when the Kyoto Protocol was signed, 694 TWh of wind power and 185 TWh of solar power capacity have been built. Nuclear has only added 147 TWh
  • The average age of reactors is now 28.8 years. In the U.S., one third (33) of reactors have operated for more than 40 years

Generation

Source: World Nuclear Industry Status Report 2015

Jonathon Porritt, a well known British environmentalist, wrote the forward to the report. His conclusion from the data was that any hope of a global nuclear renaissance was being eclipsed by the rapid development of decentralized renewable energy and storage technologies. In other words, the issue for nuclear in his opinion is its pace of change, or lack thereof.

As Porritt puts it,

The consistent history of innovation in the nuclear energy industry is one of periodic spasms of enthusiasm for putative breakthrough technologies, leading to the commitment of untold billions of investment dollars, followed by a slow, unfolding story of disappointment caused by intractable design and cost issues.

Porritt remains skeptical that future innovations will ever translate to effective applications for energy production (he specifically references Small Modular Reactor (SMR) technology, Generation IV reactors, and thorium technology). In the report itself, many issues relating to the real-world applications of nuclear power are highlighted. In a review of the UK Hinkley Point C project and Areva’s recent financial troubles, the report concludes that “few have started to radically adjust to new circumstances.”

Another noted issue area is that of nuclear’s centralized generation paradigm. As the report notes, nuclear is in some ways incompatible with the decentralized model of energy production that has many cost advantages and flexibility.  Amory Lovins, Chief Scientist at the Rock Mountain Institute, is quoted saying that renewables, which are in their own nature small and modular, can scale down much faster and leverage economies of scale much more effectively. In his words, “Nuclear SMRs can never catch up.”

It’s hard not to read the report, and Porritt’s forward, as a kind of epitaph for the nuclear sector. Porritt’s description of a “static, top-heavy, monstrously expensive” world of nuclear reads so negatively that the future seems bleak. However, with the report’s main points and Porritt’s view in mind, we must ask new questions. What is left unsaid in the report? What are the positive attributes of nuclear energy that are not discussed? Is the analysis of the numbers in the report biased in any way? In the end, what then is the future of nuclear?

OPEN TO DISCUSSION

We hope that this report can be a starting point for discussion in the industry and beyond. While experts may be familiar with many of these figures and facts, they are still new to many. As a result, this can be an opportunity to talk, reflect, and work towards a better future. Nuclear energy presents many challenges – from initial design to waste storage – and they are not solved overnight. Indeed, these things take time. Sometimes, more time than desired. But the last half-century has seen many moments of rapid progress and achievement. They are moments punctuated by stasis, yes, but it is over the long run that we see great progress.

We welcome your thoughts on these issues and many more. Here’s to what comes next.

 

 

 

 

News in Depth: Should Singapore reconsider their “no” to Nuclear?

On Friday, July 4, Peter Schwartz, business strategist and member of Singapore’s Research, Innovation and Enterprise Council, said in a panel at the Institute of Policy Studies that Singapore needs to consider turning to nuclear power as a key part of its strategy against climate change.

Mr. Schwartz, who is also a SVP at Salesforce.com and a co-founder of the Global Business Network, framed it in the context of Singapore’s current reliance on natural gas;

You’re going to continue to need electricity, and renewables will be insufficient. You’re either going to have to continue using natural gas or move to nuclear power.

In this week’s News in Depth, we look at the current state of energy sector in Singapore and consider Mr. Schwartz’s call for the country reconsider its current stance against nuclear power.

Singapore’s Current Energy Landscape and Policy on Nuclear

As the Channel News Asia report on Mr. Schwartz’s talk explains, in 2012 the Singapore government concluded that nuclear power was not suitable for the small industrialized country, owing mainly to the safety risks. The “nuclear pre-feasibility study” – a summary is available here – provides some useful context to our analysis.

Singapore, the study notes, lacks indigenous energy resources and generates around 80% of its electricity from imported natural gas from Malaysia and Indonesia. The study also notes that renewable sources such as solar and wind can only augment the energy supply, as the country simply lacks the space for large-scale renewable installations. As a result, the country is challenged with finding a reliable energy source that can provide a stable baseload of capacity while also moving the country towards a low-carbon energy system.

The government initiated the study in response to these challenges, but the study found that “nuclear energy technologies presently available are not suitable for deployment in Singapore.” Despite the findings, the report did state the Singapore should play an active role in the future of nuclear technologies and safety. In other words, the door may be closed for now, but they did not throw away the key.

Reconsidering Nuclear Energy in Singapore

This renewed call to consider nuclear comes at a crucial time in the global energy industry. With the world’s attention this year on climate change in the lead up to the UN Convention in Paris, perhaps it is time to reconsider what may be possible in Singapore.

Mr. Schwartz argues that nuclear energy technology has advanced a great deal, and believes that nuclear power plants could be built on offshore barges, underground, or potentially on partnering island who have more space and may be willing to share in the benefits of a new nuclear power plant. These ideas echo similar stories we have previously explored. In May, we looked at Dunedin Energy Systems’ idea of deploying SMR (Small Modular Reactors) technology onboard ships in Canada’s arctic. The concept there, and here potentially, is to think of nuclear options that are smaller, safer and perhaps even mobile. In addition, in the last five years more advanced reactor technologies have increased safety and relability, take Westinghouse’s AP1000 PWR as an example.

In short, in the three years since Singapore said “no” to nuclear, the landscape has indeed shifted. Of course, policies don’t change overnight, but perhaps it is time for Singapore to once again consider nuclear and the new applications of safety and operational technology that are emerging today.

Summary report for Future of Nuclear seminar – Nuclear Liability Developments in India, May 27

On May 27th attendees of the Future of Nuclear seminar series had the privilege to hear Els Reynaers discuss recent nuclear liability developments in India. Specifically, the discussion focused on the practical implications for Canadian parties interested in establishing commercial exports of civil nuclear energy technology and uranium.

A review of India’s current energy mix, as well as the country’s ambitious projected energy scenarios provided context for the discussion. By 2050, India wishes to meet 25% of its electricity needs through nuclear energy, a significant increase from the roughly 2% the industry currently represents. Thanks to key international developments, specifically a 2008 exception from Nuclear Supply Group (NSG) guidelines that previously restricted the transfer of technology, it seemed India was on-route to meeting their targets with the help of foreign participation.

Nevertheless, for this union to be successful, foreign nuclear vendors, regulators, and suppliers had to navigate India’s Civil Liability for Nuclear Damage Act (CLND). It is precisely here where the challenges lie. Chief among them were issues regarding the value and time frame of supplier liability, as well as what constitutes a supplier and the right to legal recourse in the event of a nuclear incident.

In response, the recent India-US agreement represents a commitment to address the stipulations of the CLND and so encourage foreign partnerships. The recently launched India Nuclear Insurance Pool (INIP) serves this purpose by providing funds to cover both operator and supplier liability risks and thus generate investor confidence.

Towards the end of the discussion, insightful questions were brought forth that spoke of support as well as the need to delve into the details of both the CLND and INIP. For partnerships to thrive, it is key that the aforementioned challenges be addressed. While we await the finalization of the India-US agreement and INIP policies, the lines of communication between interested parties will be kept open.

Written by Alejandra Tobar, B.Sc. Candidate, University of Toronto

 

News in Depth: Nuclear Energy and Mexico’s Radical Quest to Reduce Greenhouse Gas Emmisions

Mexico’s Bold Emissions Goals

On Friday, March 27, 2015, the Government of Mexico announced new targets that aim to cut output of greenhouse gases by 22 percent and its emissions of black carbon and soot by 51 percent by the year 2030. Such a move would make 2026 its peak emissions year.

While Mexico is only responsible for an estimated 1.5% of global emissions, the country felt strongly that is was important to set the goals high and to set them early in the lead up the global climate conference in Paris in December. Roberto Dondisch Glowinski, Mexico’s lead negotiator to the United Nations (U.N.) climate talks, is quoted in Scientific American saying: “we are trying to show that what we say in the negotiations, we stand by our words. Second, we want to show that it is feasible.”

How does Mexico plan to meet these targets? Steven Mufson, writer for the Washington Post, notes that meeting these goals will require higher fuel efficiency standard for cars and an increasing of investment in renewable and nuclear energy for the power sector.

The Future of Nuclear in Mexico

As the World Nuclear Association (WNA) highlights, Mexico currently operates two nuclear reactors that generate approximately 4 percent of its electricity. The country is also a net energy exporter, as it is rich in fossil fuel resources such as oil and natural gas. As the WNA notes, there is political will to further develop nuclear capacity, but the recent drop in oil prices has stymied any significant progress.

Given these new targets, Mexico’s Federal Electricity Commission (CFE) may pursue an earlier strategy which included building six to eight 1400 MWe units and, potentially, more flexible and less cost-intensive Small Modular Reactors (SMR) that could service the agricultural sector. However, putting these plans into action will require new investments in education and training.

In January 2015, ScienceDaily featured the research of Dr. Lorenzo Martínez Gómez, a researcher at the Institute of Physics of the Autonomous Nacional University of Mexico (UNAM). Dr. Gómez’s argues that nuclear energy is key to mitigating climate change and to reducing fossil fuel use in Mexico. The article summarizes Dr. Gómez’s main points, including: 1) that the public in Mexico fears nuclear, despite fossil fuels inflicting more actual damage to the environment and to public safety, and 2) that the key to the success of nuclear in Mexico will be training and education of scientists and technicians.

The federal government manages employment opportunities that will be generated by energy reform efforts (about 135,000 in total) not only in areas of hydrocarbons, but new technologies to develop alternative energy. Given the government’s investment in training, Mr. Gómez argues that now is the time to spark a revival in nuclear engineering in Mexico.

In short, it’s likely that the nuclear sector can play a big role in helping Mexico achieve its new emissions goals by leveraging investments in training and education and by capitalizing on new found political will both at home and abroad. Significant progress is hard to predict in the short term, but we’re optimistic that the global climate change conference in December may provide the necessary spark to push the government of Mexico and its partners into action.

Russia makes an offer to tender two nuclear power plants in Argentina

July 14, 2014 – Messi lookalike and Economy Minister Axel Kicillof and other top Argentine politicians met with Russian President Vladimir Putin and Energy Minister Alexander Novak to discuss cooperation and sign a deal to develop two new Rosatom nuclear plants in Argentina. Details of the story are available by  clicking this article in the Buenos Aries Herald.

From an international perspective these negotiations depict the high level of official government involvement that is often required in nuclear energy deals. The united efforts of Russia’s President and Economy Minister is in stark contrast to the noticeably absent support that Prime Minster Stephen Harper has shown for marketing Canadian Candu reactors abroad.  How should Canada compete with Russia and other nations to export Canadian nuclear technology and expertise around the world?

In a recent post we pointed out that Ontario’s Minister of Research and Innovation Reza Moridi was actively supporting and advocating on behalf of Candu and other Canadian interests at a conference in China. In the high stakes game of international energy, heads of state need to get involved. 

China leading the way with first nuclear IPO estimated at USD $2.6 billion

Western nations typically cite finance reasons for not being able to fund new nuclear projects. The projects are either too large, costing ten billion dollars or more, or they are deemed to be too risky with too much potential liability and therefore not financeable. What makes a finance project too big or too risky? Certainly projects worth tens of billions of dollars could be syndicated to large pension or sovereign funds. And what makes a project too risky or difficult to insure? Certainly risks associated with nuclear power are not infinite and therefore they are quantifiable. If they are quantifiable then an associated price and risk premium could be calculated. The actuaries and insurance people that first put numbers to the risk and liability issues around nuclear energy will be able to create an entire new category of infrastructure finance to support the buildout of nuclear power reactors in the 21st century.

While many western nations debate the merits of new nuclear, China is progressing aggressively. As a nation with high population density and arguably the world’s worst air quality, China has determined that nuclear will be a critical part of their energy mix. In response to the related finance issues it appears they are using another western innovation, the IPO. For full details, read the linked Reuters article which describes a $2.6 billion IPO planned by China Nuclear Power.

http://www.reuters.com/article/2014/05/05/chinanuclear-ipo-idUSL3N0NR07020140505

If you are interested in nuclear energy finance, please consider attending the Future of Nuclear seminar on May 8 on the topic Nuclear Energy Finance: The UK Experience.

Henry Vehovec,
Chair, Future of Nuclear Advisory Board
President, Mindfirst Inc.

 

 

 

 

 

Westinghouse has inside track on sale of 8 reactors ($24 billion) in China

On Mon Apr 21, 2014 Reuters reported:
* Westinghouse in talks to sell eight AP1000 Reactors
* Nuclear plants, with machinery and services, may cost $24 billion
* Liaoning’s Xudapu and Guangdong’s Lufeng part of discussion
* Sanmen 1 to connect to grid in 2015

“China may sign as early as next year the first of several contracts for eight new nuclear reactors from Westinghouse Electric Co, as the government presses ahead with the world’s biggest civilian nuclear power expansion since the 2011 Fukushima disaster in Japan.”

“China’s main nuclear power companies are moving forward with talks to buy the third-generation Westinghouse AP1000 reactors, said Timothy Collier, China managing director of the U.S.-based company. The eight projects, including machinery and services, are expected to cost $24 billion.”

“We are currently in various stages of negotiations for eight new units,” Collier told Reuters. Westinghouse is majority owned by Japan’s Toshiba Corp and its reactors are the blueprint for China’s own nuclear technology.”

“China currently has 20 nuclear power reactors online, with another 28 under construction, as it seeks to reduce its reliance on costly and polluting fossil fuels to generate electricity. Sun Qin, chairman of major nuclear plant operator China National Nuclear Corp (CNNC) recently told Reuters another 20 nuclear reactors may be built within the next six years.”

“China has vowed to more than double the installed nuclear generation capacity to 58 gigawatts (GW) by the end of the decade. Nuclear installed capacity currently stands at 15.69 GW, according to the latest official data.”

“China’s nuclear expansion is attracting many equipment suppliers, including French power firms Alstom SA and Areva.”

“Candu Energy Inc., a subsidiary of SNC-Lavalin Group , is also working with CNNC to start converting two Candu 6 reactors at Qinshan in Zhejiang province, to burn reprocessed uranium fuel.”

“There’s a huge potential for Canada and Candu energy,” Ontario’s Minister of Research and Innovation Reza Moridi told Reuters during a visit to Beijing last week.  The Reuters article further quoted Moridi, “If China is going to build 100 reactors in the next 20 years, they require 25 Candu reactors to burn the spent fuel coming from the light-water reactors.”

Candu has been criticized in China for not having built any new reactors domestically in Canada in recent years. The Chinese apparently have a hard time understanding that in Canada with a relatively stable population of about 30 million there just isn’t the demand to build new reactors at the rate required in China. As population size and density grows and GHG effects and air quality become greater concerns new nuclear becomes a more attractive option because of the great inherent density of nuclear energy and virtually no GHG emissions.

Kudos to Minister Moridi for making the trip to China to support Candu’s marketing effort. Ontario has created hundreds of jobs by encouraging renewable energy through the Green Energy Act. In comparison, Ontario’s nuclear industry employs more than 20,000. In light of the recent announcement between OPG and Westinghouse to market nuclear services globally, Minister Moridi may have been well served to be cheering on the Westinghouse sales efforts as well.

 

Swafford setting course for Candu in China

On February 25, 2014 SNC-Lavalin Inc. (TSX: SNC) announced the appointment of Preston Swafford to the role of Chief Nuclear Officer, President and CEO, Candu Energy. Based in Toronto and reporting to the Company’s Power Group President, Alexander (Sandy) Taylor, Mr. Swafford will be responsible for growing SNC-Lavalin’s nuclear business to meet the needs of its customers for technical services, major refurbishments and new builds across Canada and in key international markets. Mr. Swafford has impressive experience including senior positions at Tennessee Valley Authority (TVA) and Exelon, both companies are major American nuclear operators. On hearing the news industry observers wondered what course would be set by Swafford, and how applicable would his experience be with the iconic, definitively Canadian Candu heavy water reactors. Reports from a major trade show in China earlier this month, China International Nuclear Industry Exhibition, are providing an indication that Swafford is already starting to make his mark.

Candu Energy Inc. has had a rough period in recent years. Demand for new nuclear softened post Fukushima and in the wake of the financial crisis. Nations with stronger economies, such as China and India, have a burgeoning middle class that is hungry for cheap, reliable energy, and also, a need to rein in greenhouse gas (GHG) emissions for air quality, health and climate change reasons. International manufacturers have made inroads in these emerging markets with innovative new technologies, such as the four Westinghouse light water AP1000 reactors that China started building in 2008. With diminished demand, government support and privatization domestically, Candu needs to reinvent and reposition itself for the new 21st century nuclear market.

Swafford has quickly displayed that he understands the unique attributes of the Candu reactors. Some of the reactor features that made Candu a global leader when first developed decades ago are still highly relevant today. Candu reactors have demonstrated that they can use spent fuel to produce energy. Further, they can be most readily modified to use thorium as a fuel and they have superior safety features. Engineers estimate that for every four new reactors that China builds of various designs, they could and should build one Candu reactor to use the spent fuel. If China follows through on plans to build 100 new reactors in coming decades, this could potentially mean 25 new reactor sales for Candu.

Sales cycles in the nuclear industry are long. It is still early in the game for Swafford and the new Candu. One thing is certain, new innovations, partnerships and financial players are emerging. As with other technology industries, your competitor today may be your partner tomorrow. Who would have thought years ago that western companies would be selling nuclear technologies to China? Who would have thought that China, France and Russia would be involved in building and financing a new reactor in Britain? These are the times we are now in. Candu is setting a course to be a player in this new world.

Henry Vehovec
Chair, Future of Nuclear Advisory Board
President, Mindfirst Inc.

 

Number of nuclear plants projected to grow by 72 globally

Despite the negative sentiment from the meltdown of the Fukushima Daiichi plant, construction of new plants continues.

Nuclear energy has been catching a lot of flak lately. Three years from the day the Fukushima Daiichi nuclear power plant experienced the meltdown of three of its reactors, CNN reports that all of Japan’s nuclear reactors remain offline. Germany will also shut down eight of its nuclear reactors immediately after the accident and will be phasing out the remaining ones in about 18 years. Even Switzerland has expressed the same sentiment by shutting down its nuclear production within the next 20 years.

So does this mean the world is on its way to doing away with nuclear energy in the future? While several countries have chosen to do away with their nuclear programs, others have taken up the slack. The United States Nuclear Energy Institute reports that China will be building 29 new reactors; Russia will construct 10 new plants, India is working to have six additional facilities, South Korea plans to complete five more, and the United States will have five online in the future. The ongoing tally is pegged at 72 new nuclear power plants.

Currently operating nuclear power plants are also getting their operating lives extended by replacing essential parts, such as safety valves or pumps for their cooling systems, in order to prevent another meltdown similar to the Fukushima Daiichi nuclear power plant. However, retrofitting equipment cannot not take too long as power plants incur costs even when they are still not operating. Information found at Sulzer, the leading nuclear plant valve and pump manufacturing partner of Unaoil, suggests that minimum modifications be done to existing hardware in order to accomplish this.

Nuclear energy is not expected to go away any time soon. The construction of 72 new nuclear reactors coupled with the retrofitting of existing ones may ensure that it will continue to provide power for generations to come.

800px-Nuclear_Power_Plant_Cattenom

Topic announced for Future of Nuclear Seminar #3 – Nuclear Energy Finance: the UK Experience

On May 8, 2014, Jonathan Dart, Consul General at the British Consulate in Toronto, will speak about the UK’s recent experience in nuclear energy finance and lessons that can be learned.  Below is the abstract for the event:

“Financing nuclear energy projects has become increasingly complex in recent years. The potential for projects going over budget and difficulty in quantifying project risk contribute to financing complexity and cost. The large capital requirements in nuclear energy projects have typically required that national governments become involved in order to guarantee payments or backstop projects. In many jurisdictions the high level of complexity have made nuclear projects prohibitively expensive. Coupled with negative public sentiment towards nuclear energy there has been a decline in nuclear power useage in several Western economies. Concurrently, there are numerous countries such as China and India, that are ramping up their nuclear energy capabilities. In the United Kingdom, after years of decline in nuclear energy the government has decided to proceed with building a new reactor. How was this financed? What changed in the eyes of policy makers that they decided to proceed with new nuclear? Is there an opportunity for Canadian funds and investment bankers to participate in the large nuclear projects that will be deployed globally?”

Click here to learn more and to register.