Geoff Candy: Nuclear’s Renaissance Still On Track

GRONINGEN – The full cost of the Fukushima nuclear disaster is yet to be established but its impact on the nuclear sector as a whole may not be as bad as was first thought – even with the loss of Germany as an active participant.

Speaking on the Metals Weekly podcast, Steve Kidd, deputy director general at the World Nuclear Association, said that while the impact of Fukushima has got to be negative “there’s still substantial growth expected because some countries are very determined to have more nuclear at the moment, particularly the large developing countries like China and India and I don’t think that Fukushima is going to cause a significant change to their plans.”

He added. “The world still needs large quantities of clean energy and nuclear is one of the possible answers to that.  Fukushima doesn’t change that overall assessment…. I guess for many countries around the world the image of nuclear might have been tarnished slightly, but eventually the industry will get over that because the reality is that it’s a very good and very safe way of generating clean electricity in large quantities.”

However, he does think that the sector could come to that realisation slightly slower than perhaps was previously thought. Currently there are 440 operating reactors with a total capacity of about 370 gigawatts.

Kidd says, pre-Fukushima estimates put generation capacity around 500gigawatts by 2020 but, given the recent decision by Germany and the likelihood of increased regulation in a number of jurisdictions, that number could be as much as 10% lower.

But, he says, “the interesting thing about the 2020s is that you do get the possibility of rather more nuclear countries coming into the equation.

It is the entrance of new players that has David Talbot, senior mining analyst at Dundee Securities rather bullish about the future of nuclear and, the fundamentals for the uranium sector.

Speaking of Germany’s decision to close all 17 of its reactors by 2022, Talbot explained that while, the closures would result in a loss of 9m pounds of demand, that only accounts for 5% of global demand and, by 2020, it would only be 3.2% of global usage. And, he says, “I think there is other demand elsewhere that can essentially fill that gap.”

One area of new demand is likely to come from Saudi Arabia, which announced last week that it plans to build 2 reactors by the end of the decade and a further 14 by 2030.

“This is the land of oil. This is the first time that they have ever talked about building reactors,” he says.

And, while he admits that Germany’s decision is a blow as it is a large, technically-proficient industrial power, he says China is really the driving force behind the recent nuclear renaissance, with India close behind, followed by Russia.

“The players that were part of the nuclear renaissance continue to be part of it.”

As for the 9m pounds the industry is losing from Germany, Talbot says the view at Dundee Securities is that Saudi Arabia will pick it up.

“And,” he says, “even if they don’t, China is already using 11.5m pounds a year , by the time we hit 2020 we think that number is going to be closer to 45 to 50m pounds. Even though they might have delayed some permits for about a year, the build continues, they have 13 reactors in operation, 27 under construction,  50 planned and 110 proposed, so their long term power goals remain along the 70gigawatt number and that is really unchanged since Fukushima.”


As a result of this demand, Talbot says, uranium prices must ultimately appreciate to provide the necessary impetus for investors to finance new projects.

“If the spot price of uranium doesn’t remain significantly above $50 a pound, a lot of the big projects that are needed to provide for the growth in demand are not going to be built and we would have even less supply than we expect.”

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