Nuclear Energy Policy: Investment vs. Divestment

Asad Khaliq
March 15, 2016

Submitted as coursework for PH241, Stanford University, Winter 2016

Introduction

Fig. 1: Protestors demand the closure of Spain's nuclear plants in the aftermath of the Fukushima Disaster in 2011. (Source: Wikimedia Commons)

Nuclear power was the largest source of low-carbon electricity in OECD countries in 2013 (18% of overall generation) and the second highest at a global scale (11% of overall generation). The International Energy Agency (IEA) expects nuclear power to play a major role in lowering emissions for power sectors whilst improving security of supply at stable production costs. However, the outlook for nuclear energy has been impacted in many countries by the Fukushima nuclear power plant accident. A subsequent drop in public acceptance and momentum due to energy policy change in countries such as Germany; coupled with economic issues in others, has resulted in a lower demand for nuclear energy. This paper will explore this divestment in nuclear energy, and attempt to shine light on the future prospects at a global scale. [1,2]

Patterns in Nuclear Energy Investment

According to the IEA's Nuclear Roadmap for 2015; for nuclear deployment targets to be reached connection rates must increase from 5GW in 2014 to well over 20GW during the coming decade. In order to further the achievement of these goals, the IEA advocates for enhanced harmonization of codes, standards, and regulatory requirements, as well as an enhancement of nuclear safety culture across the whole nuclear energy sector. In addition, the IEA acknowledge the need for improved public acceptance, starting with post-Fukushima safety upgrades in existing facilities and demonstrations that nuclear regulatory bodies are strong, independent, and unbiased. [2]

After the Fukushima nuclear power plant accident in 2011, public opinion and policy toward nuclear energy shifted considerably. A 2011 poll performed for the BBC in the aftermath of the Fukushima disaster indicated that in countries with existing nuclear programs, people were significantly more opposed to nuclear energy in 2011 than they were in 2005; with many believing that improvements in renewable energy and energy efficiency were sufficient to meet needs. [3]

In OECD Europe, 25% of electricity production comes from nuclear energy; with four new plants under construction. Three countries - Belgium, Germany, and Switzerland - have pledged to phase out nuclear energy altogether. In addition, as a mature market, the average age of the nuclear plant fleet is nearly 30 years, with more than 100 units to be decommissioned by 2050. In terms of investment, the United Kingdom is planning an ambitious investment program, and Poland and Turkey are newcomers to the nuclear market. [1,2]

In the US, 19% of electricity production is from nuclear energy, with five units under construction and most reactors having been licensed for 60 years. The US is a fairly stable nuclear market. [2]

Similarly, the Russian Federation sources 17% of nuclear power from nuclear energy, with 33 current reactors and 10 more under construction. By 2030, Russia hopes to increase the share of nuclear electricity to 25-30% by 2050, with strong support for the nuclear industry as well as nuclear markets. [2]

In Asia; Japan and South Korea source 11% of electricity production from nuclear sources. However, 48 of Japan's reactors are presently idle in the wake of the Fukushima disaster, and public acceptance and a restart of the fleet still remain challenges. Japan's Prime Minister has called for a reduction of the country's reliance on nuclear energy. However, South Korea is investing into five new reactors. China sources only 2% of energy from nuclear energy, but has 29 reactors under construction and is making a push into nuclear energy sources. India has 21 reactors and 6 under construction. Bangladesh and Vietnam have also made preparations for construction, whilst Thailand and Indonesia have begun plans but remain uncommitted. Malaysia is studying the feasibility of nuclear energy and the Philippines started construction on a currently mothballed reactor. [1,2]

In the Middle East, Iran has one reactor in operation and two more units planned. The UAE has 4 planned reactors, out of which 2 are under construction. Saudi Arabia has planned up to 17GW of capacity, and Jordan and Egypt are considering investment into nuclear energy. [1,2]

Broadly; a few trends are immediately evident. Mature nuclear markets such as OECD Europe and Japan are beginning to phase out nuclear reactors and policy appears to indicate a shift away from reliance on nuclear energy. On the other hand, emerging economies such as China and those attempting to shift away from fossil fuels such as India and Saudi Arabia view nuclear power as a favorable solution, at least in the medium term.

Obstacles to Adoption

Nuclear energy, as with any other form of energy, suffers from many obstacles to implementation - strategy, policy, finance, labor and capital, as well as investment and public acceptance are key issues. However, when it comes to nuclear energy, public acceptance is more of a sticking point than with other forms of power - as >Fig. 1 shows, emotionally charged protests against nuclear power, particularly in the wake of nuclear accidents, are not uncommon. Particularly in the wake of the Fukushima disaster and several high profile countries (such as Germany and Switzerland) starting to phase out nuclear energy, public acceptance has waned and people are more concerned than ever about the safety and sustainability of nuclear energy. [1,2,4]

With this in mind, the IEA suggests several agenda items to improve public acceptance of nuclear energy:

  1. The development of education and information centers to support effective and transparent communication with regards to nuclear process and nuclear industry. [2]

  2. Operators of nuclear facilities must play a front-line communication role with stakeholders in real-time during an event, and regulatory organizations should review and monitor the strategy and performance of facility operators on a consistent basis. [2]

  3. Targeted communication programs for politicians, media, and educators to be implemented in order to improve understanding of nuclear energy in a transparent and informative manner. [2]

  4. Measures to improve sharing of information on safety events proposed by regulatory bodies. [2]

The IEA believes improving public acceptance and augmenting the role of nuclear energy in a global energy future is a long term endeavor, with agenda items expected to cover several decades. [1,2]

The Global Picture and Final Thoughts

In 2013, almost two years after Fukushima, there were 390 operating nuclear generating units throughout the world, over 10% less than before the incident, and exactly the same as 1986, when the Chernobyl disaster occurred. As of 2014, over 60% of all reactors under construction are in Asia. Nuclear energy appears to be at a global tipping point - while overall production remains fairly stable, mature markets are phasing out plans whilst emerging markets invest heavily in nuclear facilities, if only as a stop-gap solution for truly renewable energy. Nonetheless, if nuclear energy is to remain a viable policy option, stakeholders must work together to ensure open and clear communication, sustained and responsible education on nuclear process, as well as rigorous and complete safety measures. Differing views on the future of nuclear energy have the potential to cloud a vision for a global energy future. Germany has declared that existing capacity is dangerous, whilst Middle Eastern countries espouse nuclear facilities as vital low-carbon power sources. Ideally, we would want incidents such as Fukushima to steer the conversation away from sweeping statements and extreme views, and lead to a more nuanced debate on the sustainability, economics, and safety of nuclear power; ensuring a secure energy future for the world. [1,2,4]

© Asad Khaliq. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] P. Bradford, "Energy Policy: The Nuclear Landscape," Nature 483, 151 (2012).

[2] "Technology Roadmap: Nuclear Energy," International Atomic Energy Agency, 2015.

[3] R. Black, "Nuclear Power 'gets Little Public Support Worldwide'" BBC News, 25 Nov 11.

[4] B. B. F. Wittneben, "The Impact of the Fukushima Nuclear Accident on European Energy Policy," Environ. Sci. Policy 15, 1 (2012).