Nuclear power’s renaissance in reverse

www.mareeg.com
9 May 2013

PARIS-Last June, Yukiya Amano, the director general of the International Atomic Energy Agency (IAEA), declared that "nuclear power will make a significant and growing contribution to sustainable development in the coming decades". But, as this year's World Nuclear Industry Status Report highlights, recent trends paint a very different picture.

Duke Energy, America's largest utility, has shelved plans to build two reactors in Florida, after having spent $1 billion on the project. The decision came only three months after the company abandoned investment in two new units in North Carolina.

In fact, this year, four American utilities have decided to shut down a total of five reactors permanently-the first closures in the United States in 15 years. One of the units-Kewaunee Power Station in Wisconsin-was abandoned after massive investment in upgrades and a 60 year license renewal; it simply could not generate power at competitive prices. For the same reasons, Vermont Yankee, another plant with a license to operate through 2032, is now scheduled to close in 2014.

Similarly, the world's largest nuclear operator-the French state-controlled utility Electricite de France-announced its impending withdrawal from nuclear power in the US, after having sunk roughly $2 billion into aborted projects. And, in order to help offset soaring operating costs, which resulted in losses of €1.5 billion ($2 billion) last year, EDF Energy will raise electricity prices this year for its French customers by 5%, on average, and by another 5% next year.

Over the five years ending in March 2013, EDF Energy lost 85% of its share value. Likewise, the world's largest nuclear builder-the French state-controlled company AREVA-lost up to 88% of its share value between 2008 and 2012. Not surprisingly, investors have welcomed new strategic plans by both companies, as well as EDF Energy's withdrawal from the US market; the downward pressure on their share prices has eased, though for how long remains to be seen.

The nuclear power industry's decline began decades ago. But, since the March 2011 triple-meltdown at Japan's Fukushima Daiichi plant, the pace of the decline has accelerated significantly. Indeed, in 2012, annual nuclear generation worldwide dropped by an unprecedented 7%, exceeding the previous year's record-breaking drop of 4% and bringing total annual nuclear power generation to 12% below its historic maximum, achieved in 2006.

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