Nuclear power to remain vital in post-Fukushima era

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19 September 2011, Nuclear, Solar, Wind

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There is little doubt that the explosion in mid-September at the Marcoule Nuclear Site in France that killed one worker and injured four others will lead to another steep drop in support for nuclear power in opinion polls. Indeed, there are those that argue that the political fallout from events in Japan and France spells the end for the nuclear industry in the long term. However, Datamonitor disagrees.

In its recent report, "Nuclear Power Generation: Situation and Outlook Across Key Markets" (July 2011, EN00037-003), Datamonitor found that nuclear power and its role in the wider energy mix are not at risk, at least not on environmental or safety grounds. Until recently, shifts in political, environmental, and technical landscapes had drawn out the comparative advantages of nuclear power. Renewable power and energy efficiency measures will not be able to compensate for a widespread shelving of nuclear power in the coming years. Neither will they be able to address the need for global carbon abatement and security of supply from their current low levels of deployment, which is why nuclear power has recently been the subject of so much interest.

In the immediate term, it is inevitable that nuclear plant and turbine manufacturers will be challenged by concerns about nuclear safety by a media quick to publicize negative developments. The German government's drastic change of policy that resulted in the closure of seven nuclear reactors and the planned phasing out of all nuclear reactors by 2022 is often touted as a sign of things to come, but for those in the know, it is clear that Germany's knee-jerk reaction is one of a kind and is extremely unlikely to be replicated.

Germany's principled attempt to sideline nuclear power for a greater focus on renewable energy is classic small-world thinking that has put the country in a difficult position from both a geopolitical and technical standpoint. It has given rise to a dangerous game of brinkmanship between RWE and Gazprom (Germany and Russia's largest energy players, respectively) with wide-ranging implications for gas supplies across the region, giving the German government a reason to rethink its position and Brussels a reason to feel very uneasy. It also raises questions over whether the country will have enough spare conventional power capacity to meet its peak power needs and whether power imports into Germany will rise as expected over the coming months, in part from nuclear power stations in France.

In France, given public sentiment and the country's entrenched position on nuclear power, it is unlikely that political pressure will result in the refusal of life extension grants to nuclear plants that are scheduled for closure. This is, after all, a country that generates in excess of 75% of its power output from nuclear and that is responsible for meeting an often significant percentage of neighboring countries' power needs. It is also a country that hand-picked nuclear power as its preferred technology, with the long-term cost and infrastructure development implications that this entailed, over 60 years ago.

In the UK, such is the importance of nuclear power in delivering security of supply across the country that the current coalition government has placed a Contract for Difference Feed in Tariff (CFD FIT) at the very heart of its Energy Market Reform proposals. This CFD FIT provides a new market environment designed largely to support existing nuclear power generators and facilitate the building of new nuclear plants, without which a supply crunch would be all but guaranteed.

Datamonitor's report concludes that the need for large amounts of reliable baseload power generation is greater than ever, as are concerns about climate change, and that despite the incident at Fukushima and the more recent accident in France, nuclear power must and will remain a growing part of Europe's and the world's energy mix.

Source: Datamonitor

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