World Nuclear Industry Status Report 2017

The 2017 edition of the World Nuclear Industry Status Report (WNISR) has been released. It includes:

• a comprehensive overview of nuclear power plant data, including information on operation, production and construction.
• an assessment of the status of new-build programs in current nuclear countries and in potential newcomer countries.
• an assessment from an equity analyst view of the financial crisis of the nuclear sector and some of its biggest industrial players.
• a Fukushima Status Report with an update on onsite and offsite issues, and the latest cost evaluations of the disaster.
• focus chapters providing in-depth analyses of the nuclear industries in France, Japan, South Korea, the United Kingdom and the United States (while an annex provides country-by-country overviews of 25 other nuclear countries).
• a Nuclear Power vs Renewable Energy chapter providing global comparative data on investment, capacity, and generation from nuclear, wind and solar energy.

Here are some highlights drawn from the report:

Global overview:

• Global nuclear power generation increased by 1.4% in 2016, due to a 23% increase in China.
• Ten reactors started up in 2016, of which half were in China. Two reactors were connected to the grid in the first half of 2017 ‒ one in China, one in Pakistan (by a Chinese company) ‒ the first units to start up in the world whose construction started after the Fukushima disaster began.
• Three construction starts in the world in 2016 ‒ two in China, one in Pakistan (by a Chinese company) ‒ down from 15 in 2010, of which 10 were in China. One construction start in India in the first half of 2017, none in China or in the rest of the world.
• The number of units under construction declined for the fourth year in a row, from 68 reactors at the end of 2013 to 53 by mid-2017, of which 20 are in China.
• There are 31 countries operating nuclear power plants. These countries operate a total of 403 reactors (excluding 33 reactors in Japan, and six in other countries, classified as Long-Term Outages), 35 fewer than the 2002 peak of 438. The total installed capacity of 351 GW is down 4.6% on the 2006 peak of 368 GW. Annual nuclear electricity generation reached 2,476 TWh in 2016 ‒ about 7% below the historic peak of 2006.
• The nuclear share of the world's power generation remained stable over the past five years, at 10.5% in 2016 after declining steadily from a historic peak of 17.5% in 1996. Nuclear power's share of global commercial primary energy consumption also remained stable at 4.5% ‒ prior to 2014 the lowest level since 1984.
• The average age of the world operating nuclear reactor fleet continues to rise, and by mid-2017 stood at 29.3 years. Over half of the total, or 234 units, have operated for 31 years or more, including 64 that have run for 41 years or more.
• Only two newcomer countries are actually building reactors ‒ Belarus and UAE. Further delays have occurred over the year in the development of nuclear programs for most of the more or less advanced potential newcomer countries, including Bangladesh, Egypt, Jordan, Poland, Saudi Arabia, and Turkey. Vietnam abandoned its new-build project due to slowing electricity demand increases, concerns over safety and rising construction costs.

Lifetime Projections:

• If all currently operating reactors were shut down at the end of a 40-year lifetime ‒ with the exception of the 72 that have passed the 40-year mark ‒ by 2020 the number of operating units would be 11 below the total at the end of 2016, even if all reactors currently under active construction were completed. In the following decade, between 2020 and 2030, 194 units (179 GW) would have to be replaced ‒ almost four times the number of startups achieved over the past decade.
• If all licensed lifetime extensions were actually implemented and achieved, the number of operating reactors would still increase by only five, and adding 16.5 GW in 2020. By 2030, 163 reactors would have to be shut down and the loss of 144.5 GW would have to be compensated for.

Closures, Construction Delays and Cancellations:

• Russia and the U.S. shut down reactors in 2016, while Sweden and South Korea both closed their oldest units in the first half of 2017.
• Election of a new President in South Korea, who closed one plant and suspended the construction of two more, puts hopes of the national nuclear industry to expand and export into jeopardy.
• Thirteen countries are building new reactors, one less than in WNISR2016, as the construction of Angra-3 in Brazil was abandoned following a massive corruption scandal involving senior project management.
• There are 37 reactor constructions behind schedule, of which 19 reported further delays over the past year. China is no exception, at least 11 of 20 units under construction are behind schedule.
• Eight projects have been under construction for a decade or more, of which three for over 30 years.
• WNISR2016 noted 17 reactors scheduled for startup in 2017. As of mid-2017, only two of these units had started up and 11 were delayed until at least 2018.
• Between 1977 and 1 July 2017, a total of at least 91 (one in eight) of all construction sites were abandoned or suspended in 17 countries in various stages of advancement.

Deep Financial Crisis for Nuclear Utilities:

• After the discovery of massive losses over its nuclear construction projects, Toshiba filed for bankruptcy of its U.S. subsidiary Westinghouse, the largest nuclear power builder in history.
• AREVA has accumulated US$12.3 billion in losses over the past six years. French government has provided a US$5.3 billion bailout and continues break-up strategy.
• The large quality-control scandal at AREVA's Creusot Forge further erodes confidence in the industry.
• Share-value erosion and downgrading by credit-rating agencies of major nuclear utilities. In Europe, energy utilities Centrica (U.K.), EDF, Engie (France), E.ON, and RWE (Germany) have all been downgraded by credit-rating agencies over the past year. As of early July 2017, compared to their peak values during the past decade, the utilities' shares had lost most of their value: RWE –82%, E.ON –87%, EDF –89%, Engie –75%.
• In Asia, the share value of TEPCO as of early July 2017 was 89% below its February 2007 peak value. Toshiba saw its share value shrink to a quarter of its 2007 peak level. Chinese utility CGN over the past year and a half never recovered from the 60% loss of its share value compared to the peak in June 2015. The Korean utility KEPCO, the only major nuclear utility to reach its peak share value in 2016, has lost 37% of its value over the past year following tariff cuts, increased operating expenses and the temporary shutdown of four reactors.

Fukushima Status Report:

• Six years after the Fukushima disaster began, the Japanese Government started lifting evacuation orders in order to limit skyrocketing compensation costs. The total official cost estimate for the catastrophe has doubled from US$100 billion to US$200 billion. A new independent assessment has put the cost at US$444–630 billion (depending on the level of water decontamination). Only five reactors have been restarted.

Renewables Distance Nuclear:

• Globally, wind power output grew by 16%, solar by 30%, nuclear by 1.4% in 2016. Wind power increased generation by 132 TWh, solar by 77 TWh, respectively 3.8 times and 2.2 times more than nuclear's 35 TWh. Renewables represented 62% of global power generating capacity additions.
• New renewables beat existing nuclear. Renewable energy auctions achieved record low prices at and below US$30/MWh in Chile, Mexico, Morocco, United Arab Emirates, and the United States. Average generating costs of amortized nuclear power plants in the U.S. were US$35.5 in 2015.

Small Modular Reactors:

• WNISR2017 provides an update of the 2015 assessment of the status of Small Modular Reactor (SMR) programs around the world. While one SMR in China is scheduled for startup in 2018, global interest in the technologies has faded. Some of the most promising designs (SMART in South Korea and mPower in the U.S.) have not found any buyers. While SMRs were meant to solve the size issues (capacity and investment) of large nuclear plants, they are affected by the general decline in interest in nuclear new-build.

Nuclear Finances:

• In 2017, an increase in electricity-generation overcapacity in developed economies is expected, with demand not fully recovering, electricity prices should continue in a backwardation curve, as future prices are below current levels until 2019.
• Renewable investment is expected to continue, focusing on offshore wind for Europe, while onshore wind and solar for the U.S., and developing economies seem dominating.
• Demand on mature markets is not expected to increase fast enough ‒ if growing at all ‒ to cover the additional capacity to be installed, increasing the market oversupply.
• Hence, lower prices would put further pressure on nuclear operators in 2017 as their margins should continue to decrease given that their production is normally hedged for the year at a lower price level, reducing the profitability of the assets. Due to this, on the nuclear side, all operators expect lower profits in 2017 from a reduction in the hedging prices (at constant production levels).
• Going forward, 2017 will be an interesting year as multiple decisions (both financial and regulatory) are expected on nuclear reactor developments with Flamanville EPR (France), NuGen (U.K.), KEPCO's APR1400 (UAE), CGN's EPR (China), SCANA's and Southern Co's AP1000s (USA), Hinkley Point C EPRs (U.K.), and Olkiluoto-3 EPR (Finland). The path 2017 may bring to nuclear operators could reveal what can be expected for the sector in the coming years: whether a brighter light shines at the end of the tunnel or whether that's the headlight of an oncoming train.

Mycle Schneider, Antony Froggatt et al., 12 Sept 2017, World Nuclear Industry Status Report 2017, www.worldnuclearreport.org/-2017-.html

Full report online: www.worldnuclearreport.org/The-World-Nuclear-Industry-Status-Report-2017...

PDF: www.worldnuclearreport.org/IMG/pdf/20170912wnisr2017-en-lr.pdf