NICK BUTLER: The challenge for nuclear is to recover its competitive edge. The global industry considers its future this week as renewables gain ground. At the annual meeting of the World Nuclear Association this week in London, the mood will be mixed at best. There is some good news. Although the pace of development has slowed, the Chinese nuclear construction programme continues. Of the 53 nuclear new reactors under construction in 2017 globally, 20 were in China. Beijing’s commitment to building an industry with international reach is as strong as ever. In Japan, the sector has survived the Fukushima disaster and much public hostility, and the slow programme of bringing back on stream the stations closed in 2011 continues. The other good news for the industry comes from France, where persistent pressure from the powerful nuclear lobby has forced the resignation of energy and environment minister Nicolas Hulot, a longstanding sceptic. France is a key test case for the sector as its existing fleet of reactors comes to the end of its life and requires replacement. But, against this, there are too many negatives for comfort. Nuclear’s share of global electricity production has fallen from 16.5 per cent 20 years ago to barely 10 per cent today. Financing issues are clouding the future of nuclear in Britain. Indecision on the part of the government is adding to the uncertainties facing prospective investors and opposition to direct Chinese control of a reactor within the UK remains strong. The dramatic fall in the costs of renewable energy supplies – with solar down 86 per cent over the past eight years and wind by 67 per cent according to the latest figures from Lazard’s – means that alternative sources are available at previously unattainable prices. The fact that major economies such as Germany can contemplate the elimination of nuclear – and at least a reduction in coal use- demonstrates that the old market structures are changing. The nuclear industry has lost more than a third of its market share over the past 20 years and cannot take what remains for granted. The failure of the nuclear industry to reduce costs is a profound weakness. Attempts to transfer the construction costs and the risks to the public sector balance sheet – so in the end the taxpayer or consumer pays — are unlikely to work when national spending is under heavy constraint. The energy market worldwide is open and fiercely competitive, and that should be the main issue on this week’s agenda. If the nuclear industry cannot respond, its future is dark.
FT 3rd Sept 2018 read more »