Antinuclear

Global nuclear power market is in for a very hard time

About a dozen world governments are currently watching the global nuclear market as they remain on the fence with regard to nuclear energy’s future. This uncertainty, furthermore, persists against a background of the falling prices of oil, gas, and coal, and, in addition, problems that are mounting for the world’s major nuclear companies.

Survival of the fittest? World’s major nuclear builders are in for a long stretch in the red, Bellona, May 18, 2015 by Vladimir Slivyak, Translated by Maria Kaminskaya MOSCOW – Judging by the numerous reports on negotiations under way over new reactor construction projects, 2015 should be a pivotal year for nuclear power development across the world. The most vigorous efforts toward expanding their presence on the international markets are applied by the Russian Rosatom and France’s Areva. But all is not so rosy with both companies’ balance sheets. In free market conditions, without generous subsidies from state budget, the industry is as good as paralyzed, and it’s no wonder that its leaders are made of those with access to state coffers. Will the largest nuclear competitors find salvation in their governments’ support?

Tightening belts

In mid-January, the international ratings agency Fitch downgraded 13 of the largest Russian companies. Among them was Atomenergoprom, part of the vast structure of the Russian State Atomic Energy Corporation, Rosatom. The “BBB-“ rating is the lowest within the category of investment-grade ratings, and the negative outlook – the minus in the “BBB-” – means that it can be revised downward yet, which, in this case, means re-classification down to one of the speculative-grade ones. In other words, as per Fitch’s definitions, from a category characterized with “adequate” capacity for payment of financial commitments – with adverse business or economic conditions more likely to impair this capacity – the companies may be further “demoted” to a category with “an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.”

Rosatom’s English website describes Atomenergoprom as a “nuclear power holding company established in 2007 to consolidate over 80 [of] Rosatom’s civilian facilities operating in all segments of the nuclear fuel cycle.” The slightly expandedRussian version adds that Atomenergoprom’s goals are large-scale development of nuclear energy in Russia and promotion of Russian nuclear technologies on the international markets.

Fitch’s negative forecast for Atomenergoprom is perhaps the only example to date of the impact that the downgrade of the country’s credit rating and that of its leading strategic companies has had on the nuclear energy industry……..

Let’s assess the positions of the nuclear industry’s major players and see what’s in store for the nuclear technologies market. Should we be expecting a spectacular rise in nuclear energy development – which, experts in the industry insist, will be upon us any minute, because the world has supposedly already forgotten Fukushima?

No one’s forgetting

Four years have passed since the catastrophe at the Japanese nuclear power plant (NPP) Fukushima Daiichi. Despite big business doing its lobbying best to put pressure on the Japanese government, Japan has still not taken its 50 reactors back online. The reason for that is that the Japanese public is actively protesting against a re-launch. As a compromise, the government plans now to decommission for good 11 reactors, including six that are already shut down at the destroyed Fukushima Daiichi plant. And hinging now on whether the Japanese nuclear industry succeeds in having the remaining 39 units re-launched are both the development path that the energy sector in this country may take in the future and, to an extent, the fate of nuclear construction projects in other countries.

About a dozen world governments are currently watching the global nuclear market as they remain on the fence with regard to nuclear energy’s future. This uncertainty, furthermore, persists against a background of the falling prices of oil, gas, and coal, and, in addition, problems that are mounting for the world’s major nuclear companies.

After the Japanese nuclear accident, second in its staggering scope only to the 1986 disaster at Chernobyl, a number of European countries declared their decision to abandon nuclear power and announced phase-out plans. The undisputed leader here is Germany, which not only shut down nine reactors and made the commitment to gradually shut down the remaining eight approximately by 2022, but also managed to compensate for the outgoing capacity with renewable sources. Furthermore, the nuclear phase-out is proceeding without a rise in greenhouse gas emissions: Quite the contrary, Germany pledged even tighter emissions reduction targets. The country’s newly assumed commitment to a nuclear-free future both pulled the rug out from under the national nuclear industry and had its significant effect felt internationally. The largest German energy companies – such as Siemens, RWE, and E.On – chose not to invest in nuclear projects any longer. In other countries, government-level decisions opposing further development of nuclear energy were also taken by Belgium, Switzerland, and Italy.

Still, a number of European nations dared not change the course. Hardly anyone expected such a drastic turn from France, where 58 reactors are in operation and, according to the World Nuclear Association’s information, just over 73% electricity was produced by nuclear power plants in 2013. France’s company was joined by Finland, as well as Hungary and a few other countries of the former Communist Bloc, which have already received – or expect to receive – substantial financial support from Russia. In a situation where European private investors all show uniform skepticism toward nuclear energy, the only source of funding that remains is the state budget. In this case, Russia’s.

If France is the formal leader in nuclear energy in the European Union, Russia here is something of a grey eminence. The European company Areva expectedly controls the European market. But Rosatom, which is actively working in the French giant’s shadows, today has as strong a grip on the strings to the future of nuclear energy as the formal leader. Aside from striving to keep the market for the nuclear corporation itself, the Russian government also desperately needs allies in the European Union that would help hold off new sanctions against Russia’s embattled economy……..http://bellona.org/news/uncategorized/2015-05-survival-fittest-worlds-major-nuclear-builders-long-stretch-red

May 20, 2015 - Posted by Christina Macpherson | Uncategorized