American voters dashed the nuclear industry’s hopes for a renaissance last November—or so it seemed. Recent developments in Washington have rekindled those hopes, but will climate-policy...
The Safety Vote
A prerequisite for sustained nuclear renaissance.
After being out in the cold for many years, nuclear energy is again being embraced as an important source for large-scale energy production. Media, academics, and industry alike have popularized the phrase “nuclear renaissance.” Four converging trends have made this possible: tight energy supply and demand balance, security of energy supply, climate-change related issues, and the maturation of the nuclear power industry.
With safety as its central focus, the industry will be well positioned for the nuclear renaissance.
Supply and Demand
Globally, long-term primary energy supplies are tight, especially oil and gas. Limited resources and insufficient investment over the past 20 to 30 years were compounded by increasing demands from fast-growing developing economies. As a result, oil prices were subject to speculation and record highs. The present economic recession has led to a strong decrease in oil prices during the past months, based on the anticipated reduction in energy demands in both developed and developing countries. However, prices likely will rise again in the longer term and when the economic crisis ends.
The previous tensions will reappear and even could be exacerbated by the lack of investment during the recession. Such delayed investments will be especially problematic in long lead-time energy projects, including base-load power plants. A recent report from the International Energy Agency (IEA) estimated that a global investment of $26 trillion is required to build new electricity plants to replace aging facilities and to match the demand for electricity growth.
At the same time, energy-source diversification has become a global priority. Nuclear plants require uranium supplies, which fortunately are abundant and geographically well distributed. Uranium’s high energy content allows countries that have invested in nuclear energy and their power plant operators to easily maintain strategic multi-year stockpiles. In addition, as the price of uranium is only a small component of the total cost of producing nuclear energy, uranium-price volatility has a minimal effect on the cost of nuclear electricity. As a result, countries that have implemented large nuclear programs have increased their energy independence.
At the same time, climate-change issues quickly have become a serious concern for politicians and populations across the globe. The need to build carbon-free electricity generation plants makes nuclear energy a very attractive option. At present, nuclear and hydropower are the only carbon-free energy sources that are able to produce large volumes of schedulable electricity at an affordable cost.
Thanks to such institutions as the Institute of Nuclear Power Operations (INPO) and the World Association of Nuclear Operators (WANO), plant operators can exchange experiences and best practices through various channels. For example, peer-to-peer reviews allow U.S. nuclear operators to improve plant safety, availability and reliability. Also, mergers and acquisitions among operators have created larger players with better industry skill pools. Financially, these amortized nuclear plants with high availability and high output became attractive to investors again.
In the United States, the strong and accelerated construction