Nuclear Energy Out Look Report

8/12/2019 Nuclear Energy Out Look Report

1/5

Nuclear Energy Outlookin 2014: Strong Growthin a More Global Sectorby Peter Bachsleitner & Darren Glynn & Sean OBrien

FC Business Intelligence


2/5

Nuclear Energy Outlook in 2014:Strong Growth in a More Global Sector

www.nuclearenergyinsider.com

It is so easy to believe that the nuclear industry has reached its peak: The continuing

fallout at Fukushima will remain an on-going reminder of the high risks associated with

past and current nuclear technologies. New discoveries and technologies in oil and gas

have further extended the reserve base and helped keep energy prices at reasonablelevels. Renewable energy generation is still heavily expanding across the globe and

volume has helped drive down cost to allow reduction of subsidies and the ever increas-

ing bill for the decommissioning of legacy nuclear power plants.

So why should nuclear be seen as an attractive market for talent, suppliers, or investors?

In the coming year we expect attractive opportunities for sustainable growth in all three

subsectors: new build, operations, and decommissioning.


3/5



Country Specifics

Although the outlook for nuclear power in some OECD countries seems weaker than

pre-Fukushima, the International Energy Agency (IEA) still expects global nuclear capac-

ity to rise - in their central new policies scenario - by 60 percent to 2035. Over 60 reactors

are currently being constructed in 13 countries, mostly in Asia and Russia, leading to a

new reactor starting around every 25 days in the upcoming years, and that doesnt cover

the predicted acceleration in energy demand in Asia, Africa, or South America. Even

oil-rich United Arab Emirates has awarded a $20.4 billion contract to a South Korean

consortium to build the countrys first reactors by 2020. Especially with the growing

demand for clean energy, nuclear appears to remain a viable alternative to fossil fuelsas a strong base load companion to renewables - maybe not in all Western countries, but

certainly on a global scale.

Even though countries like Germany have recently decided to opt out of nuclear and

others, such as the United States, have put a hold or a more critical review on lifetime

extensions, it is not unlikely that in times of increasing budget pressure, some will follow

the Swedish pattern. In Sweden a public referendum following the Three Mile Island

accident in 1979 led to a decision to phase-out nuclear by 2010; but the demand for

affordable base load power and investments in improving security standards have more

than doubled the share of nuclear in the energy mix since then. A 2010 Parliament

decision allowed new construction at existing sites to replace the present 10 units.

Accepting life-time expansion of existing nuclear plants as a means of preserving employ-

ment or to prevent industries migrating to countries where low energy costs are seen

as a prime way of attracting investment should not be ruled out. Even in anti-nuclear

democracies the majority of taxpayers might opt back into nuclear over time - particu-

larly in times of tight budgets and ever increasing taxes - to mitigate huge upfront spend

in renewables plus required infrastructure. In countries with largely unresolved decom-

missioning, on-plant site storage without utilization of the fuels cash generation poten-

tial could soon be black-marked as a waste of taxpayers money - especially when new

nuclear is being built just a few kilometers away across the border.

The third nuclear subsector, decommissioning and waste management, is also on the

edge of an impressive growth agenda through a number of drivers: the dismantling,

treatment, transport, and storage of material from a growing fleet of retired plants; a

more progressive drive to minimize low, medium, and high level waste in the first place

(in line with the waste hierarchy); and an increasing demand for improvement to state-of-

the art operations and risk management, leading even to the decommissioning of old

decommissioning sites.

But the biggest challenge and opportunity, in our opinion, is a substantial cultural change

towards developing stronger leadership and increased transparency and communica-

tion in managing the complex problems that surface in this highly regulated industry

with an increasingly diverse arena of stakeholders.


4/5



In many countries nuclear decommissioning has become

the Achilles heel for the future of the whole sector, which

cant be protected simply by fences or excellence in

engineering anymore. Therefore, state-of-the-art opera-

tions will not only need further privatization, but also a

new breed of leader and manager who can inject lessons

learned and best practices from other industries around the

globe.

Aside from the current country-specific standing of the

nuclear segment, Pcubed sees three major trends continu-ing to shape the overall agenda of nuclear regulators,

suppliers, and operators in 2014 and beyond.

Further Globalization of the Nuclear Supply Chain,

Operations, and Regulation

After more than 50 years of operation the time has come

to further accelerate the standardization of reactor design

and the harmonization of regulatory standards. Historic

national diversity is not only a cost driver, but also comes

with a higher operational risk for humanity if best practic-

es in safety arent continuously explored and implement-

ed across the globe. A nuclear accident anywhere is an

accident everywhere.

In this respect, watch for on-going global consolidation of major industry players as well

as cross-national co-investments. An example: The recent announcement in the United

Kingdom about various consortia participants from France, China, Japan, the United

States, and (possibly) Russia and Finland working hand in hand. This practice will not only

help reduce investor risk but will also contribute to safety in nuclear construction and

operations, especially in countries that are just beginning to introduce nuclear power.

With its approach to new build and also the privatization of the management of decommis-

sioning sites to international consortia, the United Kingdom has become a test bed watched

worldwide, where a more standardized and sustainable future of nuclear power may evolve.

Pair this with a drive for a stable, harmonized international regulatory framework as we have

recently seen it with the EU stress test and the growing respect for the Western European

Regulators Association (WENRA) and the European Nuclear Safety Regulators group.

Together, these shifts in practice could have the power to attract more direct investment

from infrastructure funds and increase public acceptance of nuclear energy.

Upgrading of the IT landscape To Improve Safety and Security

IT is playing an ever more important role in nuclear plant operation and decommission-

ing, driven by the needs to further improve safety and adapt to on-going regulatory


5/5



changes. In the space sector wed expect always to find the latest technology. However,

the long planning period and life span of space missions often leads to massive delays in

deployment of state-of-the-art technology in operations. Changes to core systems accel-

erate the risk of mission failure and loss of massive investments.

In a similar way, any changes to core operating systems of a nuclear power plant or

decommissioning site requires balancing the risks from the perceived improvements

delivered by new tech. But technologies are becoming essential enablers of improved

health, safety, and environment (HSE) and security. Getting technical license renewal

these days requires the replacement of outdated systems and upgrades to effective low

risk, full scope systems for plant/site operation and automated emergency measures,simulation and operator training or structural health and seismic warning. Even more, the

strategic integration of newer technology should be viewed as an opportunity to regain

wider public acceptance of current nuclear technology.

Although seen as less critical in the shadow of massive spends on core energy systems,

the deployment and use of state-of-the-art systems for document and enterprise project

management are important tools to support another major trend, the improvement of

project and program management (PPM) standards.

Improvement of PPM Standards

PPM enables the organization to deliver new investment projects on time and on budget

and drive cultural change more effectively. Finnish utility TVO and its two primary

contractors for the Olkiluoto 3 reactor, AREVA and Siemens, are facing a major compen-

sation suit related to a potential seven-year completion delay as a result of deficiencies in

stakeholder and risk management.

New build investments and decommissioning programs and projects are facing increas-

ing pressure to provide better value for taxpayers. (For evidence read the latest report by

the UK National Audit Office on deficiencies in project delivery at the Sellafield reprocess-

ing site as a recent example.)

We have found that a strong focus on security and engineering has led to strong resistance

to change or transparency. Organizations in the nuclear segment risk a further decline in

nuclear acceptance if they dont address the cultural aspects of change management and

substantially improve their PPM maturity, particularly in a world where social media and

citizen journalists are increasingly driving the conversation.

Documents

Nuclear Energy Out Look Report