nuclear-news

Nuclear Europe: a dream unwinding, China Dialogue, Steve Thomas June 06, 2012“…”…….If Europe’s governments have been jolted by the aftermath of Fukushima, the big energy companies have been violently shaken. Nuclear has long been an attractive option for the major operators because the massive demands placed on plant-builders effectively rule out entry by new competitors – unlike smaller-scale decentralised technologies, which allow scope for small companies to join in. ….

while these firms [  EON, RWE and Italy’s ENEL, EDF and GDF Suez] have been badly bruised by Fukushima, it is worth pointing out that the fundamental problems the industry faces – around cost, finance and public opinion – were there already. And, most likely, they would have caused the long-promised nuclear renaissance to quickly run out of steam.

A decade or more ago, a new generation of nuclear designs were announced. The French EPR was expected to drive the revival in Europe, while the Westinghouse AP 1000 would lead the charge in the United States. These technologies boasted improved safety and economics and – because they were expected to be simpler – less risk of the cost and time overruns that had long plagued the industry.

On cost, the promise was that these reactors could be built for US$1,000 (6,300 yuan) per kilowatt of capacity. That would bring a 1,700-megawatt EPR in at US$1.7 billion (10.8 billion yuan). At that price, it was claimed their power would be competitive with the cheapest option, natural gas. Today, even before any of these designs have entered service, the cost estimates are five to six times that level, and there is no sign that they have stopped rising.

On finance, the mandatory opening up of European electricity systems to competition has extinguished the assumption that consumers will underwrite whatever costs are incurred. That means the financial risk falls on the owner, not consumers. Financiers don’t like that equation, especially for a technology with as poor a record for being built to time and cost and operating reliably as nuclear power. Consumers always pay, but plant owners can go bankrupt losing money lent to them by banks.

It has become increasingly clear that a nuclear-power plant will struggle to find finance if destined to operate unprotected in a competitive market. The disastrous Olkiluoto and Flamanville projects suggest the promise of “buildability” was also fanciful – and will have made financiers even more sceptical…. . http://www.chinadialogue.net/article/show/single/en/4956