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Nuclear power will fade unless it becomes more competitive

Nuclear power is in danger of fading away as a significant source of electricity supply. The fade will be gradual but is already evident in Germany and the US and the trend is likely to be followed in France, South Korea, Spain, Switzerland and Belgium. In many other areas, existing plants are ageing and while the working lives of some stations will be extended many may not be replaced.

In some cases the process will take decades — in France it will start in the 2030s and South Korean plans stretch to 2060. The rate of decline in the US will be determined by court action against subsidies to the nuclear sector and by attempts to change existing legislation to limit support for renewables.

These shifts will be balanced in part by growth in China and India and perhaps in the Middle East. In Japan, the industry will recover some market share as plants closed after the Fukushima disaster reopen. However, the trend is clear: nuclear will provide a gradually reducing share of total global energy demand.

The authors of a new report from the International Energy Agency spell out what is happening in detail and regard the fade (their phrase) as deeply regrettable — a surprising conclusion from an organisation that is usually impeccably neutral between different technologies.

Their view is driven by the assumption that nuclear power is essential to the energy transition and the move to a lower carbon economy. Nuclear could certainly be part of that process but, as the report makes clear, there are several good reasons why neither consumers nor investors are rushing to take the nuclear option.

Serious accidents from Three Mile Island in the US in 1979 to Fukushima in 2011 raise the perception of risk. In normal operations nuclear is a safe source of power. But the record of accidents, each accompanied by confusion and poor communication by industry and governments, has undermined public confidence. The new drama documentary on Chernobyl being screened by Sky Atlantic will only reinforce the concerns.

The sector’s problems are not limited to fear — rational or irrational. Economics are equally important. The imposition of gold-plated regulations that fail to recognise different levels of risk is one barrier.

But the real issue lies with the industry. Standardised programmes of nuclear development using relatively simple reactors can be very cost effective and have provided the basis for the success of the industry in France in the past and now in China. Those in the business have, however, been tempted into developing large-scale reactors such as the European Pressurized Reactor whose construction is complex.

Read full article at Financial Times