US investors have been far too focused on the domestic policy
toward nuclear power plants and the long lead time required
building new reactors. But the reality is that the nation has only
one new reactor under construction right now and nine in advanced
stages of planning. Compare that to the 27 reactors under
construction in China and the 50 additional reactors in advanced
stages of planning.
While the US has
growth stories
of its own, the growth story for nuclear power, much like the
growth story for oil and natural gas demand, is centered in the
emerging markets.
Source:
World Nuclear Association
As you can see, 61 reactors are under construction around the
world, with a total maximum capacity of 65 GW. Furthermore,
as
Jim Fink
describes in his recent
Investing Daily
article,
Investing in Nuclear Power Remains a Compelling
Choice
, in addition to the 61 nuclear reactors under construction right
now, 150 more are planned to come online over the next 10
years.
China is home to almost half of all nuclear power capacity
(measured in GW) under construction. If we add in India, Russia and
South Korea, the total jumps to well over 80 percent. The US,
France, Canada and other developed markets are building reactors,
but these projects account for only a tiny share of the 65 GW of
capacity under construction.
Emerging markets have been even more vociferous in their defense
of nuclear power. Five days after the earthquake crippled the
Fukushima Dai-ichi plant, China halted approvals for new reactors
until a safety review could be conducted and new safety plans put
in place. But inspections are already winding down, and the country
plans to release its new safety plan and resume approvals in
August. Senior Chinese officials have indicated that the country
will meet its target of 70 GW of nuclear power capacity by 2020
despite the post-Fukushima freeze.
China can rightfully claim that its fleet of reactors is among
the safest in the world because the country is building
third-generation plants such as the Westinghouse AP1000, an
advanced reactor that can be cooled without access to external
power sources. This feature would have prevented the partial
meltdown at Fukushima.
Russia also ordered a safety review of its nuclear power plants,
but the government has unequivocally stated that it will not
abandon nuclear power and will continue to build new power plants.
Russia also continues to build plants in other nations, including
planned Russian-designed reactors in Turkey and Belarus. In fact,
the latter deal was inked after the earthquake hit Fukushima
Dai-ichi.
Russian Prime Minister Vladimir Putin has long been a proponent
of nuclear power and has criticized Germany's anti-nuclear stance
on several occasions. For example, at a conference in late 2010,
Putin
chided
German business leaders about the country's plan to gradually phase
out its nuclear reactors, observing that "The German public does
not like the nuclear power industry for some reason" and adding "I
cannot understand what fuel you will take for heating." He followed
up this comment with an incisive joke: You do not want gas, you do
not develop the nuclear power industry, so you will heat with
firewood?...Then you will have to go to Siberia to buy the
firewood."
But
Germany's decision to accelerate the closure of its
nuclear plants
will have Russian gas producers laughing all the way to the bank:
Germany will need to import more natural gas to offset lost nuclear
power capacity and provide baseload power to support the country's
growing dependence on renewable energy sources. Germany already
imports more than half of its natural gas from Russia.
Russia's aggressive build-out of nuclear plants in recent years
is partly motivated by a desire to free up more natural gas for
export. Ironically, this means that Russia is building nuclear
power plants to support Germany's efforts to shut down its domestic
reactors.
Finally, India also ordered a safety review of its nuclear
reactors, but Prime Minister Manmohan Singh has emphasized
repeatedly that India must make use of nuclear power to meet its
growing demand for electricity and emissions targets. Singh stated
that safety standards for new Indian reactors would be world-class
and that the country stands by its target of increasing nuclear
capacity from about 5,000 megawatts (
MW
) today to 20,000 MW by 2020. Singh stated that further expansion
is possible after 2020, though no firm decisions have been
made.
In the immediate aftermath of Fukushima, many speculated that
the Fukushima disaster would strangle the global nuclear
renaissance. This jaundiced projection hasn't come to fruition.
Countries that were already anti-nuclear have hardened their
stance, but the growth story is intact in China, India, Russia and
other emerging markets. In short, the worst accident since
Chernobyl has had a surprisingly modest impact on the global
nuclear power industry.
Elliott Gue
is the co-editor of The Energy Strategist and is a regular
contributor on
Investing Daily
.
For more on how Elliott is playing the global energy
markets, sign up for a complimentary subscription to The Energy
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Investing in Uranium