Time and Money Run Out for Nuclear Revival

The prospects for expansion of the nuclear industry worldwide look worse in 2017 than at any time since the first atom stations were built in the 1950s.

Toshiba, the giant Japanese company that owns the American reactor designer Westinghouse, is the latest company to face financial difficulties due to unforeseen cost overruns and delays that run into billions of dollars.

Westinghouse Electric’s troubles began after it bought construction contractor CB&I Stone & Webster and then had to write down the value of the acquisition by billions of dollars because of problems with building four new reactors for US utilities.

Nuclear problems
Électricité de France (EDF), the French company with ambitious plans to build four nuclear reactors in Britain, is in ever-deepening financial difficulties because it has failed to build new stations on time or on budget at Olkiluoto, Finland, and Flamanville, in France.  It is also embroiled in an ongoing scandal over faulty reactor parts.

Even Rosatom, the state-owned Russian company, keen to expand sales outside its own borders, is pegging back on its building plans at home.  Alexander Lokshin, the first deputy director general, said on the company’s website that, because forecasts of energy use growth in Russia have proved to be inaccurate, the company had settled for life extensions of existing plants rather than a large program of building new ones.

While China and India continue to press ahead with nuclear projects, both countries are putting ever-greater effort into renewables, which provide much quicker returns.  China has cut back on nuclear plans, but is continuing to build both its own home-grown designs and two reactors of EDF’s new design, which are still under construction although they should already be in operation.

South Korea seems to be the one bright spot for the industry.  It now has 25 working reactors and is building more – including exporting four to be built at Barakah in the United Arab Emirates.

So while there are still plenty of reactors planned or under construction, they appear to be running late and over budget, or are in countries where state ownership and subsidy props up the industry and disguises its flaws.

The industry is in most trouble in countries where nuclear has to compete on price with renewables and gas.  Raising enough capital to build a nuclear station at market rates is no longer possible without state subsidy.  In the European Union and the United States, where a “free market” in electricity is supposed to prevail, government moves to boost the nuclear industry are increasingly controversial.

However, there are unlikely to be any bankruptcies.  The governments of Japan, France and Britain will bail out these flagship companies because they employ far too many voters to let them fail.  In addition, closing existing nuclear stations rapidly is technically difficult and would cause serious blackouts in France and possibly some neighbouring countries.

But hopes of a nuclear renaissance now appear to be a pipe dream.  This is partly because western companies have apparently failed to design new nuclear power stations that can be built on time and on budget.

Read more at Time and Money Run Out for Nuclear Revival