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Analysis

Global and Mexican Nuclear Industry Trends

Wed, 02/19/2014 - 15:45

The future development of the nuclear power industry is largely dependent on the balance that will be struck between enhanced safety and efficiency through technological advancement and the actual and perceived risk associated with nuclear power stations. Third generation nuclear reactors have proven to be more efficient and safer than previous iterations. The use of new types of fuel has increased the quantity of nuclear fuel reserves available, providing an alternative source of base energy for global markets. As of December 2012, there were 437 nuclear power stations in operation worldwide with a total installed capacity of 372.1GW. During 2013, total capacity increased by 3.3GW, due to new projects in China and Korea and two reconnections in Canada. However, the impact of the accident at the Fukushima Daiichi nuclear power plant continued to impact the industry, which was most notable in the small number of reactors that broke ground during 2012 and 2013. Despite the fallout from Fukushima, the total quantity of newly installed capacity surpassed the nuclear industry’s 2011 performance. The number of reactors under construction remains high at 67 globally, with long-term growth prospects focused on Asia, particularly in China which seems undeterred by the potential risk.

At the end of 2012, the global leader in nuclear power generation was the US, with 104 units and a total installed capacity of over 102GW, followed by France that has 58 units operating with a total capacity of 63GW, and Japan with an installed capacity of 44GW distributed across 50 units. However, expansion in the nuclear sector is led by China, with an aggressive increase of 28GW under construction, and Russia with 9GW. The International Atomic Energy Agency has published two potential scenarios for nuclear energy, with one being more conservative and the other more ambitious. The scenarios vary from envisaging a 23% increase in installed capacity to a 100% increase by the year 2030. The more modest prediction is to be expected if current trends continue, only minor changes to policies affecting the nuclear energy sector are made, and not all countries fulfill their nuclear power objectives. The higher projection is to be expected if the economic crisis passes, electricity demand resumes and strict policies to mitigate climate change are enforced. In the first scenario the predicted installed capacity will reach 430GW, while in the second scenario it is predicted that nuclear power will reach a total installed capacity of 740GW globally.

Most of the growth of the nuclear industry is expected to take place in countries that already operate nuclear power plants. The strongest growth will take place in Asia, which still widely sees nuclear energy as an important alternative to fossil fuels, that can enable countries to reach their clean energy targets. Asia’s capacity will grow from 83GW at the end of 2012 to between 153GW and 274GW by 2030. On the other hand, Western Europe shows the largest differences between low and high projections, and will either see its capacity reduced from 114GW to 70GW, or slightly increased to 126GW.

Conventional uranium reserves are estimated to be at 5.3 million tonnes at a recoverable cost of less than US$130/ kg; there are also an additional 1.8 million tonnes at a recoverable cost of between US$130/kg and US$260/ kg. Following the Fukushima incident, greater measures have been taken to ensure safety at nuclear reactor sites, and to strengthen the global nuclear safety framework. Operationally, nuclear power plant safety around the world is still high and steady improvements have been made.

In Mexico nuclear power is generated by CFE’s Laguna Verde plant, with 1,530MW of installed capacity, in Veracruz. According to the National Energy Strategy, in order to be able to reach the target of generating 35% of Mexico’s electricity from non-fossil fuels by 2024, increasing the proportion of nuclear energy in the country’s energy mix is key. Due to the availability of skilled human resources, the current operating framework, and the experience that has been acquired, expanding the nuclear sector in Mexico is viable. Laguna Verde could be expanded but important challenges still exist, such as the lack of available information about the future role of nuclear energy in the Mexican energy mix. The National Energy Strategy praises nuclear energy as an important driver in mitigating climate change in Mexico, and as a reliable source of base load energy for the Mexican energy grid.

Energy demand will continue to rise, while climate change must be properly mitigated in line with the General Climate Change Law, and nuclear energy offers reliable, emissionfree, low-cost electricity. Laguna Verde has proven itself to be a cost-effective and reliable project over the course of many years, which makes expanding Mexico’s nuclear capacity a feasible option that will be considered in the discussions surrounding the development of Mexico’s energy mix and the expansion of its power generation capacity.