17 July 2012

Financial Chronicle (India): India’s nuclear march of folly

by Praful Bidwai, Financial Chronicle, 11 July 2012

Financial Chronicle, 11 July 2012

India’s nuclear march of folly

by Praful Bidwai

Blind to the perils of nuclear reactors, India continues its ‘March of Folly’, even as it seeks untested reactors, with potentially dangerous consequences, such as the disaster in Fukushima All those, including Indian policymakers, who nurture the illusion that nuclear power is the energy source of the future and will flourish despite the Fukushima disaster, increasingly adverse atomic economics, and widespread social and political opposition, would do well to read the just-released World Nuclear Industry Status Report (WNISR) 2012 (http://www.­worldnuclearreport.org). This annual publication, with independent energy consultant Mycle Schneider as its lead author, has over 20 years evolved into the most reliable, strikingly original, comprehensive and penetrating assessment of the global nuclear industry.

What WNISR depicts is an industry that has repeatedly failed to deliver on its always-hyperbolic promises, and which is in deep crisis thanks to the Great Recession, the triple meltdown at Fukushima, formidable and growing competition (especially from renewable energy sources), and “its own planning and management difficulties”. The crisis could well become terminal in the industrialised countries, nuclear power’s heartland. The OECD countries account for 70 per cent of the world’s 429 reactors. The total rises to 80 per cent if Russia and Ukraine are added.

Contrary to the illusion of a “nuclear renaissance”, the number of operating reactors worldwide peaked 10 years ago at 444, and installed capacity peaked in 2010 at 375 gw (or 1,000 megawatts). It’s now down to 364 gw. Nuclear power’s share of global electricity generation has declined relentlessly, from the peak of 17 per cent (1993) to about 11 per cent. In the past 18 months, only nine reactors started up, while 21 were shut down. Right now, only one of Japan’s 44 reactors is operating despite unusually strong public protests. Ten reactors have been definitively taken off the grid, and the fate of the others remains uncertain.

Four countries have announced time-bound nuclear power phaseouts: Germany, Belgium, Taiwan and Switzerland. At least five countries (Egypt, Italy, Jordan, Kuwait and Thailand) have abandoned their nuclear plans. Not one of the other countries in the “potential newcomers” list (Bangladesh, Belarus, Indonesia, Poland, Saudi Arabia, Turkey, the UAE and Vietnam) has put financing arrangements in place for building reactors. Iran alone newly started commercial nuclear generation — for the first time since Romania, in 1996. France, the world’s most nuclear power-dependent country, is reeling under excess capacity, and has only one reactor (a European pressurised reactor — EPR) under construction, and that too plagued by numerous problems.

The average age of the world’s nuclear reactors is 27 years. Assuming a 40-year lifespan, an additional 67 reactors, with a capacity of 35 gw, would have to be ordered, built and commissioned by 2020 just to maintain the status quo. This is highly unlikely given that worldwide, it took an average of 9.5 years to build the five reactors that began operating in 2010. Construction time got lengthened to 13.8 years for the seven units commissioned in 2011.

Only 13 countries are building nuclear plants, compared with 15 a year ago. At least 18 of the world’s 59 reactors described as being “under construction” have witnessed multi-year construction delays. The situation of the remaining 41 projects is indeterminate. Nine of them have been listed as “under construction” for 20 years, and another four for 10 years or longer

Only China, Russia and India plan to expand nuclear power generation significantly. They together have 43 of the world’s 59 reactors described as “under construction”. But China is going slow on nuclear expansion and lowering targets. It didn’t start any new construction in 2011. Russia completed only three projects in the past 10 years, with construction periods ranging from 20 to 27 years. Indian leaders alone stand out for their zeal — or their ‘Nuclear March of Folly’.

Three other major trends have become apparent. First, reactor construction costs are going through the roof, having globally risen threefold or more over a decade. In the case of the now-notorious EPR, designed by the French company Areva, estimated costs (adjusted for inflation) have risen fourfold over 10 years. This is perhaps the most troubled nuclear reactor design in the world, with serious problems with its instrumentation and control systems. The world’s first EPR, in Finland, is five years behind schedule and 100-120 per cent over budget. Delays and cost overruns at France’s own EPR are increasing even faster than in Finland. Yet India wants to import six EPRs.

Second, rating agencies consider nuclear power highly risky: A nuclear project is liable to push a utility “over the edge”. Standard and Poor’s has downgraded two-thirds of assessed nuclear companies and utilities. All but one of a dozen nuclear companies assessed has performed worse than the FTSE-100 index. Since 2007, Areva’s share value has fallen by 88 per cent, EDF’s by 82 per cent, and Fukushima operator Tepco’s by 96 per cent. The writing on the wall couldn’t be clearer.

Third, global investment in renewable energy totalled $260 billion last year, up fourfold since 2004. Cumulative investment in renewables since then grossed $1 trillion, eight times higher than in nuclear power. Renewable costs are falling dramatically — by one-half for solar-photovoltaics over just one year. Last year, wind turbines alone produced four times more electricity compared with nuclear reactors worldwide. Renewables is where the future lies. But blind to it, India continues its ‘March of Folly’, even as it seeks untested reactors, with potentially dangerous consequences.

(The writer is an independent commentator on political and economic issues)