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information about Fukushima published in English in Japanese media info publiée en anglais dans la presse japonaise

Opinion piece about future demand for nukes

Tuesday, July 17, 2012


 

ENERGY SYMPOSIUM

 

Global demand for nuclear power remains high

Emerging powers seek more energy; U.S. nuclear revival may hinge on natural gas prices

http://www.japantimes.co.jp/text/nb20120717d1.html#.UAVKSpFIwpU

 

 

By TAKASHI KITAZUME 

Staff writer


Despite the Fukushima nuclear power plant disaster that hit Japan last year, the global appetite for nuclear energy remains largely unchanged as emerging economic powers are set to account for much of the growth in worldwide electricity demand in the coming decades, a U.S. think tank expert said at a recent seminar in Tokyo.


The United States also has not wavered from its recent moves to resume construction of nuclear power plants for the first time since the Three Mile Island accident in 1979. However, the future of the U.S. nuclear power industry will hinge on various other factors, including price competition with domestically produced natural gas, Jane Nakano said.


Nakano, a research fellow with the energy and national security program at the Center for Strategic and International Studies, was speaking at the seminar organized by the Keizai Koho Center on June 13 to discuss the global prospects for nuclear energy and U.S. energy policy.


Before the Fukushima accident in March 2011, about 30 countries around the world operated over 440 nuclear power reactors, which accounted for 14 percent of global electricity generation. The nuclear power industry has seen steady growth, with about 50 commercial reactors coming online over the past 15 years, Nakano said.


The real story behind the growth, she said, is China, Russia, India and some other fast-growing economies. "Today, about 65 reactors are under construction, and about 40 percent of them are being built in China alone," she said.

Nakano said the Fukushima plant meltdowns and the radiation fallout "did not cause major changes to the level of interest in nuclear energy" worldwide, except in Japan.


Several countries, including Germany, Italy and Switzerland, decided to phase out their nuclear power generation or adopt a no-nuclear policy after Japan's nuclear crisis.


Nakano pointed out, however, that the high-profile German case was a reversion to the country's decision made in 2000 to phase out nuclear power, which had been reversed just a few years ago by Chancellor Angela Merkel. Italy had no nuclear power facilities but planned to build ones, and the no nuclear vote was seen more as a public vote against the policies of then Prime Minister Silvio Berlusconi, Nakano said.


Among countries that have had sustained interest in nuclear energy, including nations that do not currently have their own reactors but have been in talks to build ones, the Fukushima incident did not seem to have a major impact on their demand for nuclear energy, Nakano said. That should not come as a surprise given that a major part of the demand comes from developing countries, where growth in energy needs is much stronger than in mature economies, she said.


Energy consumption by rich countries that belong to the Organization for Economic Cooperation and Development was surpassed by non-OECD economies for the first time in 2007, Nakano noted. Global energy consumption is forecast to rise by 50 percent by 2035, and 85 percent of the growth is estimated to come from developing countries experiencing rapid economic growth, "where the population is still rising and the interest is growing among the public for modern conveniences," she said. And these countries are interested in nuclear power because growing energy consumption usually comes with rising emissions of greenhouse gases, she added.


Along with such shifts in the global energy demand landscape come the changes on the suppliers' side of the market, where countries such as South Korea and China are having a growing presence, Nakano said.


South Korea's successful bid in 2009 to supply four reactors to the United Arab Emirates was made in a "Team Korea" approach that involved many domestic suppliers and full government support. Nakano also said it is "a matter of when, not if, China will become one of the established suppliers of nuclear reactors in the global scene."


"The rise of these new suppliers pose challenges to traditional suppliers because many of (the latter) are mature economies whose home markets do not have the same type of thirst for electricity compared with developing countries. So the competition is becoming more and more fierce in the third-party markets such as Vietnam, Jordan and Turkey," she said.


Meanwhile, the United States has not had any new nuclear reactors built since the Three Mile Island accident. "It has become too expensive as an investment to build one," and due to regulatory uncertainty given the updates to safety regulations, "many other fuels have become more favored," Nakano said.


In recent years, however, policies have been put in place to support the nuclear power industry, including introduction of a simplified process for issuing permits for construction and operation of new reactors, as well as federal government loan guarantees and tax credits, she noted.


In 2010, about a year prior to the Fukushima accident, roughly $8 billion in loan guarantees was awarded for two new reactors. Following the disaster in Japan, President Barack Obama and his administration quickly expressed their support for the U.S. nuclear industry, and in February this year construction and operation permits were issued for the two power stations in Georgia and South Carolina, she said.


Still, construction of new reactors in the U.S. faces an uphill battle, "but not because of Fukushima," Nakano observed.

"Given the current serious deficit issues the government has, it is unlikely that the federal loan guarantee would be sustained at a strong level in the next couple of administrations, whoever gets elected," she said.


The price of natural gas — a major competitor to nuclear power in the U.S. energy mix — has come down quite sharply in recent months, Nakano said. And current debate in Congress suggests that there is "very little chance for the U.S. to have either cap-and-trade or carbon tax" plans to cut carbon dioxide emissions for at least the coming decade, and without these mechanisms in place, "nuclear power will have a harder time economically vis-a-vis natural gas," she observed.


Out of the 104 nuclear reactors in operation in the U.S. today, the operational life of 50 has so far been extended to 60 years. But there are movements in some states to reconsider the life extension of reactors beyond 40 years, and if there are no additional life extensions, "about one-third of nuclear power generation capacity will disappear in the U.S. by 2035," she said, adding that that is a "possibility given the low price of natural gas."


In recent years the U.S. has experienced a sharp increase in domestic production of shale gas, aided by new exploration technology and economically attractive gas prices that encouraged investments, Nakano said.


Shale gas accounted for a mere 5 percent of natural gas production in the U.S. five years ago, but that has increased to 30 percent today and is estimated to rise further to 45-60 percent by 2035, she noted. The "shale revolution" could result in natural gas accounting for a much bigger part of power generation in the U.S. — and U.S. export of domestically produced natural gas, she said.


Meanwhile, Akihiro Sawa, an executive senior fellow with the 21st Century Public Policy Institute and a former trade ministry official, said at the same seminar that he sees contradictions in the ongoing discussions in Japan on the future of the energy mix in the country following the Fukushima disaster.


An advisory panel to the Ministry of Economy, Trade and Industry has proposed four options for Japan's future energy mix, and the government is set to compile a new energy policy this summer after soliciting public comments on the options.


The options presented by the panel in May call for the government to seek a society in which nuclear power represents zero percent, 15 percent, or 20 to 25 percent of the nation's electricity provision by 2030, compared with 26 percent in fiscal 2010. All of the panel's options call for increasing renewable energy use to between 25 and 35 percent by 2030.

The government's energy policy prior to the Fukushima disaster stated the government would seek to increase reliance on nuclear energy to 45 percent of total supply by 2030 through the construction of new reactors.


Sawa said that if the government is trying to reduce the reliance on nuclear energy, the focus should be on energy policy, whose objective is to secure steady supply of energy sources, both in volume and economic terms.


If Japan is to make up for the termination or reduction of nuclear power generation, renewable energy would not normally be the primary option because it's still expensive and supply volume is small, so the priority should be how much can be secured through increased thermal power generation and at what cost, he said.


Renewable energy would be a priority option if the objective is to reduce emissions of carbon dioxide from energy production, while thermal power would be the primary option if the objective is to secure a steady energy supply at low cost, he said. Still, all the scenarios being contemplated seems to focus on increasing renewable sources to make up for the cuts in nuclear energy, which appears to contradict the objective of what the government is trying to do, Sawa said.

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