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Home > Blogs > Anthony Harrington > Japan’s nuclear disaster gives some countries pause

Japan’s nuclear disaster gives some countries pause

Nuclear industry | Japan’s nuclear disaster gives some countries pause Anthony Harrington

No one can look on as Japanese nuclear engineers struggle to prevent further radioactive leakage from the damaged reactor cores of the Fukushima nuclear plants without recognising that some serious questions have been raised over the future of nuclear power. Yet for some countries nuclear provides either the dominant base load generation capacity or such a significant portion of it that moving away from nuclear generation risks paralysing their electricity output, with huge potential costs to industry.

Pau Morilla-Giner, head of alternative investments, equities and commodities at fund managers London & Capital, and author of a forthcoming QFINANCE Viewpoint, says that it is already abundantly clear that the Japanese earthquake has created some problems for the global nuclear industry.

“Going forward, industry regulators will pay much more attention at the planning stage to issues such as the location of nuclear plants and how many of them it is sensible to put in the same locality. On older nuclear plants, which is to say plants where the basic design is more than 20 years old, governments are going to have a much more difficult job granting end-of-life extensions. I cannot for a minute think that this will be the end for the nuclear industry, but it does mean that a highly regulated industry is going to become even more intensely regulated, which adds an additional layer of difficulty for potential investors in new nuclear plant."

Morilla-Ginar points out that there are some serious questions around design issues for older plants that will make it very difficult to extend their lifespans after the Fukushima plant disasters. “We have not yet seen a great deal of technical information coming out of Japan but there were clear concerns about the ability of the elderly reactor design to provide unambiguous temperature readings at the core as the crisis developed. This same design technology has been used a great deal in Europe and if it shows real deficiencies, then that is going to pose some real problems,” he says.

Already the Italian government has ordered a one-year moratorium on its plans to revive nuclear industry as an additional part of its energy mix. The Italians took their last nuclear reactor off line more than 20 years ago, so restarting was always going to be difficult in the teeth of the Italian green party and environmentalist lobby detestation of nuclear. The country rejected nuclear power in a nationwide referendum back in 1987 on the heels of the Chernobyl disaster so the Japanese tsunami and quake have simply gingered up those fears, leaving Italy with some real thinking to do as to how it is going to meet its future fuel demands. Natural gas-fired reactors look like the obvious choice, but with Russia in oligarchic mode and insisting on a tight coupling between gas and oil prices, despite natural downward pressure on gas prices, that looks to be an option fraught with political risk.

Writing in the Telegraph, Geoffrey Lean points out that German anti-nuclear protestors were motivated by the radiation spill over at Fukushima to form a 27-mile human chain from Germany's Neckarwestheim nuclear power plant to the city of Stuttgart to protest against its government's plans to extend the life of the country's reactors. The cause of nuclear power in Germany was not helped by the need to relocate thousands of barrels of low level radioactive waste from Germany’s Asse salt dome store. The store had become unstable through being permeated by ground water, raising concerns that the containers could corrode, contaminating the water table. German Chancellor Angela Merkel had granted Germany’s ageing nuclear fleet of power stations a short extension back in September 2010 in return for new taxes on the sector. However, after Fukushima, Merkel decreed that all German nuclear power reactors which commenced operations in 1980 or earlier would be shut down with immediate effect, taking out about 10% of Germany’s generation capacity.

Lean cites the World Nuclear Association which says that there are some 60 reactors currently under construction around the world (10 in China) and another 150 were planned to come on line during the next 10 years, with a further 200 reactors further back in the pipeline. How many of those now proceed to completion must be an open question. One has to remember too, that nuclear fusion technology using deuterium and tritium (heavy water) is now moving out of the laboratory and into the demonstration stage with construction beginning on the seven nation ITER fusion plant in the South of France. That is due to start producing demonstration power in 2017 and it will be astonishing if ITER and nuclear fusion – the same power that drives the sun - does not start grabbing the popular imagination as an infinitely preferable clean power option in the not too distant future. If I was a potential investor in nuclear power, I’d watch fusion developments very closely indeed and be very tempted to close my cheque book while I pondered the potential outcomes...

Further reading on the nuclear industry and business risk:

Tags: environmentalist , Fukushima , Japan , Japanese earthquake , nuclear power , nuclear reactor , radiation , tsunami
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