September 26, 2013
Mycle Schneider
In 2007, the Jordanian government announced its intentions to develop a peaceful nuclear energy program for electricity generation in order to meet the country’s energy security needs. Jordan depends on imported energy sources such as fuel and natural gas at a ratio of up to 96% of its national energy mix. This translates to around 20% of GDP and puts a heavy burden on the public budget which is already constrained by running costs and subsidies.
The nuclear energy program has been heavily criticized by a variety of Jordanian academic and civil society actors who, backed by international experts, stress that the program is not economically feasible and poses a severe environmental threat to Jordan, a country that is among the four water scarcest countries worldwide.
Heinrich-Böll-Stiftung Palestine/Jordan has been supporting the national discourse on the Jordanian energy strategy, sparked by the first public debate on the pros and cons of nuclear energy in 2011. In June 2013, two years after the first debate, hbs and a broad coalition of Jordanian civil society organizations, invited to a public panel discussion on “The Future of Nuclear Energy in Jordan and Worldwide”. Keynote speaker Mycle Schneider presented the findings of the World Nuclear Industry Status Report 2013 not only to the audience of the event, but also in a meeting with the Jordanian parliament, as well as in several meetings. His article outlines some of the main trends in the nuclear industry.
In late June 2013, I had the pleasure to visit Jordan at the invitation of the Heinrich-Böll-Foundation Palestine/Jordan. The main purpose was to present to the public, the parliament, and journalists the main findings of the World Nuclear Industry Status Report 2013 that was to be released in early July.
On 29 June 2013, two days after my departure from Amman, 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”.(1) In fact, even most recent events point to a very different situation, confirming our assessment of the long-term decline of nuclear energy’s role in the world.
In early August 2013, Duke Energy, the largest utility in the U.S., shelved plans for two reactors in Florida after having spent US$1 billion on the project. The decision came only three months after the company abandoned investment in two new units in North Carolina. Earlier in the year, three U.S. utilities decided to shut down permanently four reactors, the first closures in the U.S. in 15 years. One of the units, Kewaunee in Wisconsin, was closed despite massive backfitting investments and the fact that it just had its license extended for 20 years. The owners concluded that the power it would produce would not be competitive.
The largest nuclear operator in the world, French majority state owned utility Électricité de France (EDF), announced to entirely withdraw from nuclear in the U.S. after having sunk around US$2 billion in aborted projects. At home, EDF admitted it has to raise electricity prices on average by 5% in 2013 and another 5% in 2014 in order to cover some of the soaring costs. The national regulator calculated that EDF lost €1.5 billion last year because tariffs did not cover the costs. Hardly a recommendable policy considering that the French utility accounted for a net debt of €41 billion by the end of 2012 and over five years had lost 85% of its share value by March 2013.
The largest nuclear builder in the world, the French majority state owned company AREVA has lost up to 88% of its share value between 2008 and 2012. That is the company that had signed a uranium exploration agreement in Jordan and pulled out in a difficult world market situation when resources turned out less rich than initially announced. AREVA also would like to sell a large nuclear power reactor to Jordan. However, Jordan is lacking the fundamental ingredients for a commercial nuclear energy program: cooling water, a large power grid, finances, legal framework, independent safety authorities, and an appropriate nuclear skills base.
The World Nuclear Industry Status Report 2013 demonstrates that the latest international developments are an acceleration of a trend that started decades ago. The tragic events in Japan following the March 2011 earthquake-tsunami-triple-meltdown just exacerbate the difficulties of an industry in long-term decline. Global nuclear generation dropped by an unprecedented 7% in 2012, adding to the record drop of 4% in 2011. Nuclear power plants generated 12% less than the historic maximum in 2006. While the situation in Japan—only two of 50 units officially “in operation” are currently providing power and they have to go offline for refueling and maintenance by September 2013—contributes for about three quarters to the global decline, 16 other countries, including the world’s top five nuclear generators, decreased their generation. The share of nuclear power in global electricity generation peaked 20 years ago, in 1993, and dropped since from 17% to around 10% in 2012. Only the Czech Republic reached its historic maximum nuclear share last year.
Two thirds of the 66 reactors under construction in the world are located in just three countries, China, India and Russia, with China alone accounting for 28 of these. However, nine of the building sites have been listed for over 20 years—the Watts Bar 2 reactor in Tennessee, U.S., holding the record as construction started in 1972—and an additional four for over 10 years. In total, at least 23 units have encountered construction delays, most of them multi-year. The remaining new-build projects have been started over the past five years and therefore it is difficult to assess whether or not they are on schedule. Only three new units started up in 2012 while six where shut down. In the absence of sufficient new plants coming online, the average age of the world’s reactor fleet continues to increase steadily and now stands at 28 years average.
The comparison between nuclear power and new renewable technologies illustrates a fundamental shift in international energy policy and investment strategies. In 2012, for the first time three of the four largest economies in the world, China, Germany and Japan, as well as India, generated more power from renewables than from nuclear. In fact, in China and India, wind generation alone outpaced nuclear. Globally, since 2000, annual growth rates for onshore wind power have averaged 27 percent and for solar photovoltaics staggering 42 percent. This resulted in 2012 in an additional 45 GW of wind and 32 GW of solar being installed, compared to a net addition of 1.2 GW of nuclear. Even in the U.S., where cheap shale-gas is reshuffling the energy cards, more wind power was connected to the grid last year than gas. And in the first trimester of 2013, over 80% of new capacity was renewable in the U.S..
When the international nuclear industry launched its full-blown promotion campaign in the early 2000s with the slogan of a “nuclear renaissance”, the attention of decision-makers was captured by promises of investment costs of US$1,000 per installed kilowatt and building times of four years. Cost estimates have increased about sevenfold since, while the price per installed solar kilowatt, in Germany for example, dropped by three quarters over the past seven years alone. Nuclear power has turned out not only very expensive but extremely slow. The mean construction time of the 34 reactors started up over the past decade was close to 10 years and they contributed a total of just 26 GW, a third of what solar and wind added in one year. In Germany, up to 3,000 MW of solar photovoltaics were connected to the grid in one month.
It is impossible today to build a competitive new nuclear plant in a transparent market economy, without massive government subsidies. Existing nuclear plants are facing increasing difficulties to cope with significantly rising maintenance and, in many cases, post-Fukushima upgrading costs. Therefore rather than nuclear power making, as the IAEA has claimed, a growing contribution, the sector remains in decline or, as Vermont Law School economist Mark Cooper has called the development, a “renaissance in reverse”.(2)
The Jordanian society should have a close look at these international developments before spending additional public money in the hope to enter a technology that is being phased out by leading economies throughout the world.
Mycle Schneider is an independent international consultant on energy and nuclear policy based in Paris, France. He is project manager and lead author of the World Nuclear Industry Status Reports.
For further reading on the prospects nuclear power in Jordan, please see a commentary by Professor Steve Thomas from Greenwich University London here .
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(1): Statement by Yukiya Amano at the Ministerial Conference in St. Petersburg, Russia, 29 June 2013.