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Nuclear power dead and alive

Nuclear Monitor Issue: 
Jim Green ‒ Nuclear Monitor editor

S&P Global Ratings has published a glum assessment of the prospects for nuclear power, in 'developed' countries at least. It states:1

"The global nuclear industry, accounting for 10% of global power generation, faces many challenges as governmental and regulatory policies have shifted toward renewables, especially after the 2011 Fukushima nuclear accident. Concerns about the safety of nuclear plants and nuclear waste storage solutions, an aging global nuclear fleet, and massively escalating costs for many new projects have added to the industry's woes.

"Several developed countries, including Germany, Belgium, Switzerland, and Spain, are planning to phase out nuclear. Others, such as South Korea, Sweden, and even France aim to reduce it. In the U.S., the continuity of nuclear plants and future life extensions are under threat from prevailing low power prices. ...

"In developed markets, we see little economic rationale for new nuclear build. Renewables are significantly cheaper and offer quicker payback on scalable investments at a time when power demand is stagnating. New nuclear construction requires massive upfront investments in complex projects with long lead times and risk of major cost overruns. Returns over nuclear assets' long useful life are exposed to fundamental uncertainties about the global energy transition, technology development, regulatory shifts, and increasingly volatile electricity markets. …

"Most of the existing reactor fleet was built in the 1970-1980s. Notwithstanding the recent uptick in nuclear construction globally after 2014, the global trend in energy investments shows a clear preference for renewables, and investments in nuclear generation are several times smaller than renewable investments. This is fundamentally because public policies do not consider nuclear to be clean energy due to safety concerns and long-term nuclear waste issues, even though it results in zero direct CO2 emissions. In addition, new nuclear reactors require vast amounts of capital investment upfront and have high execution risks, long lead times, and very long asset lives. This makes private investors cautious about investing in nuclear amid lower and increasingly volatile power prices across major markets, and rapid and continued changes in the global energy system."

Thus the S&P report expects nuclear generation to gradually decline in the US and it notes that most Western European countries plan to reduce or phase out nuclear power, South Korea has been shifting toward renewable energy sources from coal and nuclear since 2017, the road ahead for Japan's nuclear industry "is likely to be long and challenging, and so on.

Small modular reactors are quickly dismissed: "they are still far too expensive and less scalable than renewables, and do not address fundamental nuclear safety and nuclear waste issues."

The report notes that even assuming investment costs come down significantly to US$4,500/kW, nuclear power would cost around US$100/MWh and its economic competitiveness would be "clearly questionable". The assumed $4,500/kW construction cost is "much lower than actual first-in-kind projects that have experienced large cost overruns" (and much lower than the US$6,900 ‒ $12,200 estimate in the latest Lazard report.2)

Dead and/or alive?

Despite the glum assessment outlined above, the S&P report predicts that nuclear power output is set to increase marginally over the next two decades. Questionable assumptions leading to that conclusion include the following.

Reactor lifespan extensions

Lifespan extension licenses are given undue weight in the S&P report. The escalating cost of continuing to operate aging reactors, relative to more competitive energy sources, isn't given due weight. The risks of continuing to operate aging reactors are ignored altogether (as are the connections between nuclear power and weapons).

The S&P report asserts that "a too fast nuclear phaseout" would have a "huge impact on CO2 emissions". Only if you assume that gas and coal are the replacement energy sources, and ignore renewables and energy efficiency altogether ‒ which is what the report does.

Emerging economies

The S&P report anticipates nuclear decline across developed countries but growth in 'emerging economies', with China taking the lead. China will need to "accelerate" the construction of new nuclear power plants to achieve its ambitious 2020 target of having 58 gigawatts (GW) of nuclear capacity in operation (from 45 GW in 2019) and 30 GW under construction (from 11.2 GW as of Nov. 20193).

But no credible acceleration could possibly see China meet its 2020 targets. Recent years have seen a sharp deceleration ‒ just one reactor construction start since December 2016. A World Nuclear Industry Status Report briefing states:4

"China National Nuclear Corporation (CNNC), on 16 October 2019, announced the construction start of Zhangzhou-1, a Hualong or HPR-1000 design. ... This is the first new construction start for the Hualong design reactor ‒ and the first construction start of any commercial reactor ‒ since 23 December 2016 ... With the latest construction start, a total of 11 reactors are now under construction in China. This is significantly below the figure of 16 in 2017, and of 20 in 2016. This new-build decline is a clear demonstration of the slowdown of the Chinese nuclear power program. With currently 45.5 GW in operation and 10 GW under construction, China will be far from achieving its 5-year target of 58 GW operating and 30 GW under construction as of 2020."

According to the S&P report, China's nuclear program benefits from an economic learning curve effect, a complete supply chain, and "good project management that reduces execution risks". But the economic case for nuclear clearly isn't compelling ‒ hence the go-slow in recent years. Moreover, renewables have expanded far more rapidly ‒ wind already generates more power than nuclear and solar is catching up fast.

And there is a trade-off between safety and economics ‒ a trade-off ignored in the S&P report. Accidents ‒ large and small ‒ are all the more likely because of China's inadequate nuclear safety standards, inadequate regulation, lack of transparency, repression of whistleblowers, world's worst insurance and liability arrangements, security risks, and widespread corruption.6


1. Elena Anankina et al., 11 Nov 2019, 'The Energy Transition: Nuclear Dead And Alive', S&P Global Ratings, or

2. Lazard, Nov 2019, 'Lazard's Levelized Cost of Energy Analysis ‒ Version 13.0',


4. World Nuclear Industry Status Report, 19 Oct 2019, 'China: First Commercial Reactor Construction‑Start in Three Years',


6. Nuclear Monitor #796, 19 Dec 2014, 'China's nuclear power plans: safety and security challenges',