Overview > Nuclear Power - Growth Assured
nuclear power – growth assured
Last year in the aftermath of the global financial crisis we observed that the nuclear electricity industry was resilient and that long-term growth was assured. Those comments are equally valid this year.
There are now 440 nuclear power plants in operation worldwide, providing 14% of the world’s electricity production. There are also 59 new plants under construction, 10 more than last year. 24 of the new plants are being built in China where the government has ambitious plans to operate over 180 nuclear plants by mid century. 149 plants are in the “planned” category (136 last year) including 4 plants ordered by the United Arab Emirates, which currently has no nuclear power reactors, and 20 plants planned in India which is now fully engaged in the world civil nuclear fuel cycle for the first time. Several countries are evaluating nuclear power for the first time with Poland, Jordan and Turkey each likely to make commitments for new reactors over the next year. The number of reactors in the” proposed” category has also risen significantly from 277 last year to 344 today. These are encouraging statistics which describe an industry in growth, but behind the numbers are changes of possibly greater significance.
There have been profound changes in public and official attitudes towards nuclear power which mean that the industry’s future is more certain now than at any time since its inception in the 1950’s. People today have a deeper understanding of energy and environmental issues and no longer accept at face value the objections of strident anti-nuclear advocates. It is now widely understood that nuclear power is a low-carbon energy source on a whole fuel cycle basis, ending a long running but futile campaign by opponents asserting the opposite despite the facts. Spent fuel storage and disposal is now being seen in context with the challenge of carbon capture and storage which inevitably counter balances the position of nuclear’s critics. Debates about nuclear power are now more likely to focus on costs and benefits, conceding that the industry now has an excellent environmental and safety record. The World Nuclear Association points out that the civil nuclear industry today has recorded more than 14,000 reactor-years of operation and is a mature and proven technology.
The positive attitude towards nuclear power is reflected in changing national policies. Several countries which had nuclear phase-out policies have abandoned them or are in process of modifying them (Sweden, Belgium, Spain, Germany), and countries which were ambivalent have returned to a pro-nuclear position (U.K., USA, Italy). Several countries which have no nuclear power are well advanced towards building nuclear power plants (United Arab Emirates, Turkey, Poland, Jordan). In the USA, which has the largest number of nuclear power plants but which has not ordered a new plant for over 20 years, there has been a marked shift in public opinion in favour of nuclear energy to the extent that those who “strongly favour” nuclear energy now outnumber those who “strongly oppose” by more than three to one.
Nuclear Power Worldwide
|Belgium||52%||7||0||0||0||Phase-out under reconsideration. Lifetime extension for certain plants. |
|Canada||15%||18||2||4||3||Leader in civil nuclear technology. |
|China ||2%||12||24||33||120||Target 5% nuclear by 2020. Nuclear a key climate change policy. |
|Czech Republic||34%||6||0||2||1||Firm government support for more nuclear. |
|Finland||33%||4||1||0||2||Firm commitment to nuclear on environment and cost grounds. |
|France||75%||58||1||1||1||Highly dependent on nuclear. |
|Germany||26%||17||0||0||0||Phase-out under reconsideration. |
|India||2%||19||4||20||40||Target 25% nuclear by 2050. Now under IAEA safeguards umbrella. |
|Japan||29%||55||2||12||1||Target 40% nuclear by 2017. |
|Korea||35%||20||6||6||0||Nuclear power and technology is a national strategic priority. |
|Russia||18%||32||10||14||30||Progressive target to reach 70%-80% nuclear by 2100. |
|Spain||18%||8||0||0||0||Phase-out plans uncertain but 2 plants obtained 10 year lifetime extensions. |
|Sweden||35%||10||0||0||0||Phase-out abandoned and policy now permits new plants to replace existing capacity. |
|Taiwan||20%||6||2||0||0||Taiwan is planning a 20% power up-rate and 20 year lifetime extension for existing plants. |
|United Kingdom||18%||10||0||4||6||New government supports new reactors to replace ageing fleet. |
|USA||20%||104||1||9||22||Current administration favourable to nuclear and new builds highly likely. |
|Other countries*||61||6||44||118||11 additional countries planning nuclear programs. |
|World||440||59||149||344||Potential to increase nuclear capacity by 2.5 times.|
* (Argentina, Armenia, Belarus, Brazil, Bulgaria, Egypt, Hungary, Indonesia, Iran, Israel, Italy, Jordan, Malaysia, Mexico, Netherlands, Pakistan, Poland, Romania, Slovakia, Slovenia, South Africa, Thailand, Turkey, Ukraine, UAE, Vietnam).
More reactors will require more fuel and fuel cycle services. Total world uranium production in 2009 was 50.772Mt U, an increase of 6.919Mt U (+16%) from 2008. Most of the increased production is attributable to significant growth in Kazakhstan’s output which rose from 8.521Mt U in 2008 to 14.020Mt U in 2009 as well as from the Company’s Langer Heinrich Mine in Namibia and Kayelekera Mine in Malawi. Despite the rise in production, uranium requirements in 2009 exceeded uranium supply by approximately 17.800Mt U.
The pressures on the supply industry which we have been pointing out for some time are still real and unresolved.
Uranium supply will not constrain the growth of the nuclear power industry in the long-term, but the need for a significant increase in uranium production will ensure the Company will continue to enjoy good opportunities in a vibrant and strategically important industry.
"The Company anticipates uranium price strengthening in both the spot (near-term) and the term (multi-year) market segments."
CURRENT MARKET AND LONG-TERM URANIUM OUTLOOK
Uranium prices turned in a lacklustre performance during the 12 month period. After showing a slight rise in June 2009, reaching $US52/lb U3O8 at the end of June 2009, the spot uranium price tended to drift downwards to US$44.50/lb U3O8 at year’s end then reporting at US$41.75/lb U3O8 at the end of June 2010. Compared to historical spot market volumes, monthly transactional quantities remained robust averaging close to 4Mlb U3O8 per month over the 12 month period.
The term uranium price, which generally applies to the future balance between utility uranium demand and primary uranium supply, fell incrementally during the 12 month period from its mid-year 2009 level of US$65/lb U3O8 to around US$60/lb during most of the first half of CY2009. Moreover, volumes contracted in the term market were somewhat modest especially when compared to the CY2005-2007 time period.
Looking forward, the Company anticipates uranium price strengthening in both the spot (near-term) and the term (multi-year) market segments. Annual uranium requirements will be increasing at an accelerating rate as new reactor build programmes bring more reactors into commercial operations over the next 10-20 years. Much greater primary uranium production will be needed to fuel these units and that expansion in uranium output will only be forthcoming at higher sustainable uranium prices.