The Banking Executive Magazine - June 2022 Issue

Nuclear Energy the construction of six new reactors, adding to the 54 already in operation and 19 under construction. Chinese firms are reportedly negotiating to develop 40 new reactors around the world. A Chinese-built reactor in Karachi, Pakistan, was commis- sioned on March 31, and China signed a deal earlier this year to build another new nuclear power station in Argentina. True, Germany began to shut down its nuclear capacity in 2011 and is scheduled to close its three remain- ing stations by the end of this year. Elsewhere in the European Union, however, there is significant interest in the potential of nuclear power to replace the Russian natural-gas sup- plies on which the EU has depended for the past 40 years. French Presi- dent Emmanuel Macron announced before the recent presidential elec- tion that France would build up to 14 new nuclear reactors, starting in 2028. And Poland submitted plans in March for the construction of six new reactors. Supporting this trend, firms such as Rolls-Royce in the United Kingdom and NuScale in the US are develop- ing a new generation of small modu- lar reactors (SMRs) that can be built and commissioned in under ten years. SMRs can be built in series and should attract private investors deterred by the long lead times, es- calating construction costs, and risks associated with complex large-scale plants such as Flamanville. But a nuclear renaissance is far from certain. Today, more reactors are at risk of closure and decommissioning than are being built. Although public sentiment has become more favor- able to nuclear power in most coun- tries, entrenched resistance, underpinned by environmental and safety concerns, continues to impede a renaissance. Local planning processes are extensive and bitter. Construction takes time, not least be- cause of the extensive safety assess- ments required, and time costs money. As a result, projects will pro- ceed only where there are credible guarantees regarding future pricing and power purchases. The future of nuclear energy is inseparable from public policy, which, as ever, is un- certain and a further source of risk. Moreover, there is no guarantee that natural-gas prices will remain high when new fields in regions such as North Africa or Central Asia come on stream, or that the EU will deliver on its pledge to reduce its gas imports from Russia by two-thirds by the end of this year. Equally, the nuclear in- dustry is still failing to deal effectively with the problem of waste disposal. At plants such as Sizewell in eastern England, there is the additional chal- lenge of securing sufficient water supplies to operate the reactors. Given the prospect of a long conflict in Ukraine limiting trade with Russia, and with electrification likely to be- come increasingly important as we move to a low-carbon world, the po- tential for nuclear power is huge. Be- cause of the lead times involved, nuclear energy cannot offer an in- stant solution to today’s challenges. Within a decade, however, nuclear, alongside wind and solar, could un- dermine the global gas market. The question is whether civil nuclear power can now finally fulfill the promise it has shown since it was first developed in the 1950s. the BANKING EXECUTIVE 34 ISSUE 162 JUNE 2022