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Global Outlook for Nuclear Energy

By Michael Angwin

Despite the Fukushima disaster, Australian uranium miners are confident that the growing demand for electricity in a carbon-constrained world will drive an increase in nuclear power generation.

A small uranium development company, Toro Energy, believes it’s worth spending 6 years and countless millions in remote Western Australia preparing to mine and export the radio­active metal that the industry needs for fuel. This signals the confidence some people have in the future of the global nuclear energy business.

Toro hopes to be in a position to start shipping uranium in 2014 for use in reactors overseas. It hopes that by then China’s and India’s reactor expansion will be well underway again. It hopes that Japan’s paralysis will have passed, and its sizeable reactor fleet, or a good part of it at least, will be operating again after being “shuttered” since the Fukushima disaster.

Are Toro and its peers, along with a considerable number of international energy officials and analysts, justified in their confidence that the nuclear industry is not only still alive but indeed will grow in coming decades?

Or, as Greens and Greenpeace would have it, is the nuclear industry for all intents and purposes dead and beyond resurrection?

Ballooning demand for electricity is a certainty, rising by as much as 80% by 2035 in official estimates. The key driver is economic growth, mostly driven by population growth and the wealth aspirations of people in less-developed countries.

Some believe this demand could be met by renewables alone, but on cool assessment it is clear that for foreseeable decades only large-scale base-load generation (fossil-fuelled or nuclear) in combination with distributed smaller-scale technology (wind, solar, biomass, modular nuclear) will deliver the needed capacity.

Fukushima’s effects have been to reduce by single digit percentages the scope and scale of nations’ nuclear expansion plans and, in some cases, to defer the investments. But the fundamentals of nuclear power can still be attractive.

Nuclear energy produces no emissions (carbon, particulate, nitrous) in electricity generation and very few carbon emissions – about the same as wind and fewer than some solar technologies – across its lifecycle.

For China and India, which are struggling to provide their enormous populations with equitable access to reliable electricity, much of the extra generation they install will be coal-fired. But a considerable portion will be low-carbon nuclear.

South Korea already has a considerable nuclear fleet and will grow it. For countries in the Middle East, like Saudi Arabia and the United Arab Emirates, installing nuclear power is an immediate priority. They will pay a premium to jump to the head of the queue for nuclear power components.

Germany is the largest of the few countries turning away from nuclear. The future there will be a return to coal, along with renewables. Turning again to coal is strange for a country whose no-nuclear energy policy is driven by Greens.

Japan might return to energy imports. The pathway there is uncertain. It would seem most likely that a portion of the operable reactor fleet will be re-started, but that is not sure, nor is the proportion.

Modelling by the International Energy Agency and the International Atomic Energy Agency reflect all this. Currently, 440 operable reactors exist around the world and have around 390 GW of total capacity. Forty-nine of those reactors are in Japan, operable but not operating.

The IAEA produces low and high estimates of future reactor numbers based on differing policy and demand scenarios:

Forecast total global reactor numbers.
Year Low High
2020 429 525
2030 501 746
2050 560 1228
Source: International Atomic Energy Association, May 2011

The IEA’s New Policies Scenario projects a rise in global reactor capacity to 630 GW in 2035, around 20 GW less than it projected in the previous year, as a result of Fukushima.

The increase comes mostly from non-OECD countries; a 40% increase in nuclear capacity in China; a tenfold increase in India; and two-thirds in Russia. In the OECD, 60% of the additional capacity replaces ageing plant, delivering a net increase in nuclear capacity of just 16%.

So it might prove patchy, but there will be growth nonetheless. If you were Toro Energy’s boss, Greg Hall, who won environmental approval for his project in May, you might still think you were on a pretty good thing.

Michael Angwin is CEO of the Australian Uranium Association.