Part One of Two Parts
It should be clear to anyone who reads this blog that I am not a great fan of nuclear energy. For my one thousandth post, I laid out forty reasons that nuclear power is not a good idea. (it has since grown to forty-five reasons.) The arguments for and against nuclear energy production are being played out in the press, legislatures and board rooms around the world. The pro and con arguments play out on several different levels. There are arguments that nuclear power should or should not be used. And then there are arguments that nuclear power will or will not be used in the coming years. Recently an article was published that laid out five reasons why the author thought that the nuclear power industry was going to “rebound” in 2018. I decided that I would present those five reasons and my reactions to them today.
- Nuclear construction boom
There are more than fifty new nuclear power plants under construction in the world today and one hundred and fifty more are being planned. This year fourteen new power plants will be connected to power grids including next generation Westinghouse AP1000 and Framatome’s EPR. Korea is building its first APR1300 reactor in the UAE which is on time and on budget.
This sounds really positive, but it turns out that both the Westinghouse AP1000 reactor in China and the Framatome EPR in Finland and France have encountered serious problems and are behind schedule and over budget. Both Westinghouse and Framatome have serious financial difficulties to deal with that may affect the construction of these reactors. There are also ongoing investigation of French and Japanese nuclear reactor component companies falsifying quality control records for their products that are used in reactors around the world. The Korean reactor in the UAE may be on schedule and on budget now but let’s see what the situation is when it finally completed and connected to the grid. Every single nuclear power reactor built in the U.S. in the last sixty years has come in late and over budget. The price of nuclear power reactors just keeps going up and will probably continue to do so which will cool off enthusiasm for this power source.
- Nuclear industry reorganization
Some of the biggest members of the nuclear power industry are reorganizing to be more efficient and profitable. The former French Areva was split up into Framatome and Orano. The French utility, EDF, the biggest nuclear plant operator in the world, is taking over Framatome which is focused on reactors, nuclear fuel and nuclear services. Orano will focus on uranium mining, recycling and decommissioning. Brookfield Asset Partners of Canada are going to buy Westinghouse Electric Company from Toshiba. China National Nuclear Company is China’s second biggest nuclear power company. It is merging with China Nuclear Equipment Company. Now that the board has been reshuffled, some pending nuclear reactor projects should be able to move forward.
Once again, this sounds really good. However, the companies that have been reorganized, bought or merged have all had serious financial problems which prompted the changes. It is well known that just reorganizing, being bought or merging in themselves are not necessarily solutions to anything. Sometimes, problems result from poor management and sometimes they result from external market factors that put companies in difficult financial situations. Unless new and more competent managers are installed and/or market situation change, the new companies may find themselves with many of the same problems that the old companies had.
Please read Part Two:
