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Future looks bleak for nuclear energy – expert

Nuclear power generation has turned into an expensive operation, even when the machines are amortised, said nuclear expert Mycle Schneider. By Matthew le Cordeur

Schneider, author of the World Nuclear Industry Status Report, told Fin24 on Monday that he questioned whether nuclear power can be seen as an alternative to a whole range of other energy options.

Schneider’s 2015 report, which was released in South Africa this month, concluded that “the promise that Generation III+ designs would be simpler and therefore easier to build appears not to have been fulfilled”.

“Real costs have increased significantly compared to their predecessors suggesting the attempt to reduce complexity was not a success.

“The ‘nuclear renaissance’ appears, in retrospect, to have been a last chance for light water reactor technology,” the report says. “Given the failure to reduce costs – and there are few who would forecast costs are going to go down at all, much less decline to the levels originally claimed – and the apparent failure to reduce the incidence of construction overruns, the future looks bleak for light water technology.”

South Africa is forging ahead to build 9.6 GW of nuclear energy, which critics believe will drain the country’s fiscus due to the large upfront infrastructure costs they say will experience time and budget overruns.

Request for proposals – which would focus on the Generation III+ designs – will be released before the end of the month, the Department of Energy said.

Nuclear for SA would only be ready by 2025

“Nuclear power has the longest lead time of any option to generate electricity,” Schneider told Fin24. “The average construction time of the 40 nuclear reactors that have been brought on line in the world in the past 10 years was about 9.5 years, to which one has to add several years of site preparation and licensing procedures.

“In other words, new nuclear would only be available in SA after 2025. Other options, especially efficiency and renewables, can be implemented within months,” he said.

Schneider said that nuclear energy’s high capital expenditure (capex), low operating expenditure (opex) paradigm is gone.

“Nuclear power generation has turned into an expensive operation, even when the machines are amortised,” he said. “As assessments by the French Energy Regulatory Commission (CRE) and the French Court of Accounts have shown, all of the cost items have increased significantly, to reach a 20.6% increase between 2010 and 2013 to reach about 60 €/MWh.

“The ‘base load’ concept is also rapidly outlived by reality in the market,” he said. “With increasing penetration of renewables, flexibility is the master word.”

Nuclear the least flexible power

“Nuclear power is the least flexible of all of the power generating technologies and is therefore hardly suitable for a future orientated power grid with high levels of decentralised renewables,” he said.

“An assessment we commissioned from the German Fraunhofer Institute for Solar Energy Systems illustrates that nuclear power is increasingly operating in times of low or even negative pricing levels in the German market.”

In his report, Schneider said the reality may be that nuclear technology is simply not mature enough to standardise. “There is still a continuing flow of design changes driven by experience of operating plants and technical change that it would be foolish to ignore,” he said.

“The rate of ordering may also be too low for standardisation to be feasible. If vendors are receiving only a handful of orders per decade, it seems to make little sense to standardise.

“There is considerable momentum to the Chinese and Russian programmes, but unless costs fall, even these countries will have to think again. If the nuclear industry is to have a future, it can only be through new technologies such as Generation IV designs or Small Modular Reactors.

“Both of these options are many years from being commercially available.”

High opex costs

Regarding high opex costs, the report reveals that in countries like Belgium, France, Germany, Sweden and the US, “historically low inflation-adjusted operating costs were escalated so rapidly that the average reactor’s operating cost is barely below, or even exceeds, the normal band of wholesale power prices”.

“This has led to a number of responses from nuclear operators,” it says. “The largest nuclear operator in the world, the French state-controlled utility EDF, has requested significant tariff increases to cover its operating costs.

“In Germany, operator E.ON closed one of its reactors six months earlier than required by law.

“In Sweden, at least four of the ten units will be shut down earlier than planned because of lower than expected income from electricity sales and higher investment needs.

“In the US, utilities are trying to negotiate with state authorities’ support schemes for reactors that they declare are no longer competitive in current market conditions.

“In Belgium, it is uncertain whether Electrabel (GDF-Suez) will be able to restart two reactors with serious defects in their pressure vessels.” – Fin24

 

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