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A Worldwide Nuclear Slowdown Continues

Aftershocks from Fukushima shake political confidence in nuclear—and provide a boost for renewables.

The bad news from Japan’s Fukushima Daiichi nuclear power plant continues to reverberate around the world, dimming nuclear energy’s future and boosting the fortunes of low-carbon power sources. Last week’s decision by Japan’s prime minister to scrap plans for 14 new reactors is just the latest sign of a global nuclear slowdown, and the technology faces renewed scrutiny even in countries with pronuclear governments, including the U.S., China, and France.

Waste land: A site in Victoria, Texas, where Exelon has proposed constructing a new nuclear plant.

“Due to both the time needed for integrating the lessons learned from Fukushima in new reactor designs and the likely hesitations of the public and decision makers, the deployment of nuclear power will be delayed,” says Jan Horst Keppler, principal economist at the Nuclear Energy Agency, a Paris-based arm of the Organization for Economic Cooperation and Development.

What has not changed, says Keppler, are the drivers that were fueling new reactor construction: concerns over energy security and climate change. In the past, nuclear technology has been perceived as the cheapest option. But with nuclear on hold, governments are looking to accelerate renewable-energy development, and the latest cost estimates from the U.S. Energy Information Agency provide support for that position.

The agency’s Annual Energy Outlook, released this month, estimates that new reactors starting up in 2016 will produce power at a cost of $114 per megawatt-hour. Onshore wind turbines, geothermal, and biomass power plants all beat that price, according to the agency’s figures (as do gas-fired power plants that capture and sequester their carbon emissions underground).

The potential for renewable energy technologies to scale, meanwhile, was affirmed this month by the U.N.’s Intergovernmental Panel on Climate Change, which issued a special report predicting that renewable sources could satisfy up to 80 percent of global energy needs by 2050.

U.N. Secretary-General Ban Ki-moon also highlighted nuclear energy’s comparatively troubled position last week with his call for a high-level debate on nuclear energy’s costs, risks, and benefits. “Twenty-five years after Chernobyl and in the aftermath of Fukushima, I believe it is high time to take a hard look at … strengthening nuclear safety and security,” he told reporters at a press conference in Geneva last Wednesday. The discussion by world leaders is scheduled for September’s General Assembly meeting in New York.

Japan is taking the hardest look at nuclear, as Tokyo Electric Power—Fukushima Daiichi’s operator—continues to wrestle with dangerous radiation levels in its bid to cool the reactors and spent fuel pools at its stricken plant. Last week it was revealed that nuclear fuel in one reactor had melted and sunk to the reactor’s bottom, and that Tokyo Electric Power had withheld radioactivity readings in the first days of the crisis, keeping the government and public in the dark and putting plant workers at risk.

Japan’s prime minister, Naoto Kan, is looking to renewable power and energy efficiency to replace some nuclear energy. But in the short term, he faces a power-supply crisis that got worse last week when two reactors at the coastal Hamaoka nuclear plant, southwest of Tokyo, were shut down at Kan’s request pending tsunami-protective upgrades.

Chubu Electric Power, the utility that owns Hamaoka, may struggle to meet peak demand this summer without the reactors, which generate over 3,600 megawatts of power. Tokyo Electric is counting on 1,000 megawatts from Chubu to meet its own summer peak, and even with that help, it is facing at least a 5,000-megawatt supply shortage this summer, according to the Institute of Energy Economics, Japan.

Germany is also moving to shut down nuclear plants and transition to greater reliance on renewable energy. In 2010, Chancellor Angela Merkel pushed legislation through the parliament extending the operating lives of Germany’s 17 nuclear plants—then slated to be shut down by 2022—by an average of 12 years. But Merkel quickly reversed course after Fukushima, ordering the immediate shutdown of Germany’s seven oldest plants. Her government is now working to pass legislation that would shutter those plants permanently and reinstate phase-out plans for the rest. “Merkel wants this issue out of the political limelight before the summer recess,” says Andreas Kraemer, director of the Berlin and Washington-based Ecologic Institute, an environmental think tank.

The German government has already identified renewable energy as the future, setting plans to boost renewable generation to 50 percent of electrical consumption by 2030 (from 17 percent last year) and to 80 percent by 2050. But which form of renewables will win is still in question.

Under last summer’s legislation, a new nuclear-power tax was expected to subsidize large offshore wind farms. But with last summer’s nuclear extension on the rocks, Merkel’s legislation could now shift support to more distributed forms of renewable energy, says Kraemer. This includes onshore wind turbines and power generation from biogas (methane produced from manure, food wastes, and biomass).

Germany’s accelerated nuclear phase-out may also threaten plans in Eastern Europe by undermining support for subsidies. As Kraemer notes, German taxpayers contribute a third of European development funds, and may balk at contributing to new reactors on their borders.

The deepening nuclear debate over nuclear energy in France, meanwhile, may have global implications. France generates 80 percent of its electricity with nuclear, and its state-owned firms are world leaders: Paris-based EDF is the largest operator of nuclear power plants worldwide, while Areva is the largest provider of nuclear services and technology.

Even France’s allegiance to nuclear appears to be loosening, however. Late last month, Paris-based oil and gas multinational Total announced that it would invest $1.38 billion in solar power by purchasing 60 percent of U.S.-based solar-panel producer SunPower.

EDF says it is moving forward with plans to build a reactor in Normandy. But even EDF is hedging its bets, observes Emmanuel Guérin, a climate and energy expert at Sciences Po, France’s elite university of political science and economics. As Total was buying SunPower last month, EDF was securing the remaining shares that it didn’t own in subsidiary EDF Renewable Energies. “It’s clearly an indication that EDF doesn’t want to be outside the bet on renewable energies,” says Guérin.

At the same time, France’s Socialist Party, previously staunchly pronuclear, is debating its position. Several candidates vying to take on Nicolas Sarkozy in the presidential election next year have called for France to begin shifting from nuclear to renewable energy.

China and the U.S. are also showing signs of strain over the issue. China’s government has temporarily suspended approval of new reactors, and is talking about shifting the balance between its nuclear and renewable energy plans. Chinese officials have said that they may double their goal for solar power from five gigawatts to 10 gigawatts by 2015.

In the U.S., nuclear investment plans are wavering. Last month, NRG Energy wrote off its $481 million investment in a two-reactor project in Texas, blaming potential delays in nuclear approvals and competition from power generators fueled by cheap natural gas. This month, an Areva subsidiary halted construction of a facility in Newport News, Virginia, that was to forge large components for nuclear reactors, while North Carolina legislators rejected a bill to streamline the financing of new reactors. In a conference call with financial analysts earlier this month, the CEO of Duke Energy, a utility proposing to build new reactors in the state, blamed the nuclear crisis in Japan for the political defeat.

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