Report#: DOE/EIA-0484(98)

Nuclear Power

Regional Overview

In 1996, 2,280 billion kilowatthours of electricity was generated by nuclear power worldwide, to provide 17 percent of total electricity generation. Among the countries with nuclear power, national dependence on nuclear power plants for electricity varies greatly (Figure 65). Nine countries—five in Eastern Europe and the former Soviet Union (EE/FSU) and four in Western Europe—met over 40 percent of their total electricity demand with generation from nuclear reactors.

The prospects for nuclear power to maintain a significant share of worldwide electricity generation are uncertain, despite projected growth of 2.7 percent per year in total electricity demand through 2020. Over the long term, of the regions shown in Figure 66, only the developing nations and Japan are projected to have net additions to nuclear power capacity. In other regions, countries that are operating older reactors and have other, more economical options for new generating capacity are expected to let their nuclear capacity fade as current nuclear units are retired.

Figure 65. Nuclear Shares of National Electricity Generation, 1996

Source: International Atomic Energy Agency, Nuclear Power Reactors in the World 1996 (Vienna, Austria, April 1997).

In the IEO98 reference case, worldwide nuclear capacity is projected to increase from 351 gigawatts in 1996 to 354 gigawatts in 2005, then begin to decline, reaching 302 gigawatts in 2020. Aggressive plans to expand nuclear capacity, mainly in the Far East, drive the near-term increase, whereas plant retirements in the United States and other countries exceed new additions later in the forecast. Developing Asian countries are projected to add 32.4 gigawatts by 2020, but the industrialized nations overall lose 83.4 gigawatts.

As noted earlier (see page 18), no attempt has been made to assess the impacts of the Kyoto Climate Change Protocol on the projections that appear in IEO98. The Protocol could create new incentives for the use of nuclear power, which does not produce carbon emissions. There were, however, two alternative cases developed for this report (Figure 67 and Table 22). Whereas the reference case for nuclear power reflects a continuation of present trends, the low and high growth cases present more pessimistic and more optimistic views of the future of the nuclear power industry. For the United States, the reference case assumes that the current trend of early reactor retirements will continue, with almost one-quarter of currently operating units being retired before their license expiration dates. The remainder are assumed, on average, to continue operating for their full 40-year lifetimes. For foreign nuclear projections, the reference case takes into account announced schedules for completion of units under construction and any announced retirement dates. Also considered are political environments, national energy plans, construction management experience, and financial conditions. Complete country-by-country listings of the projections for the reference, low, and high nuclear cases are provided in Tables A48, A49, and A50 in Appendix A.

Figure 66. World Nuclear Capacity by Region, 1970-2020

Sources: History: International Atomic Energy Agency, Nuclear Power Reactors in the World 1996 (Vienna, Austria, April 1997). Projections: Based on detailed assessments of country-specific nuclear power programs. For some countries, the World Integrated Nuclear Evaluation System (December 1997 run) was used to supplement the 2020 capacity projection.

Figure 67. World Nuclear Capacity in Three Cases, 1970-2020

Sources: History: International Atomic Energy Agency, Nuclear Power Reactors in the World 1996 (Vienna, Austria, April 1997). Projections: Based on detailed assessments of country-specific nuclear power programs. For some countries, the World Integrated Nuclear Evaluation System (December 1997 run) was used to supplement the 2020 capacity projection.

The low growth case projects a more significant decline in nuclear capacity orders, and additional retirements of existing units. In the United States, all reactors are assumed to be retired after an average 30 years of operation. The forecast for worldwide capacity in 2020 is 172 gigawatts, a 51-percent decline from current capacity. The high growth case reflects a slight revival for the nuclear power industry, with net capacity growth of 1 percent annually over the forecast period. In the United States, the high growth case assumes that all plants will operate 10 years longer than in the reference case, except for units with announced firm retirement dates. The high growth projections are generally based on assumptions that construction times for new units will be shorter, and that provisions will be made to extend the operating lives of existing units beyond current estimates.

Nuclear generation in the reference case remains fairly flat, with a declining share of the world’s electricity consumption (Figure 68). Among the most significant factors shaping the outlook for nuclear power are the following:

• Changes in electricity industries worldwide, introducing more competition in the generation sector. Nuclear power plants require relatively large amounts of capital and more time to build than other technologies (natural gas units, in particular). This will make nuclear power less attractive to investors in a competitive environment, where recovery of capital is not guaranteed. Competition may also affect how long current reactors will operate. In the United States, three reactors were permanently closed in the first half of 1997, all before their licenses expired, and all, at least in part, due to an inability to compete with the other available generating technologies. On the other hand, in the United Kingdom deregulation is further along, and British Energy (BE), the new private company created to operate the newest nuclear units, is expected to show a profit for the financial year 1996-1997. Average capacity factors have increased, and operating costs have decreased. BE is showing an interest in investing in overseas projects to improve performance of nuclear plants in newly deregulated markets [1]. In general, U.S. utilities operating nuclear power stations have already begun to reduce costs and improve performance. In 1996, more than two-thirds of U.S. nuclear stations generated power at costs below 2 cents per kilowatthour [2].

Figure 68. World Nuclear and Total Electricity Consumption, 1995-2020

Sources: 1995 Energy Information Administration (EIA), International Energy Annual 1995, DOE/EIA-0219(95) (Washington, DC, December 1996). Projections: EIA, World Energy Projection System (1998).

Table 22. Historical and Projected Operable Nuclear Capacities by Region, 1995-2020
(Net Gigawatts)

• Public acceptance. The perceived risks of nuclear power continue to be an issue in technology choices for new generating capacity. Recently in Taiwan, funding to build a fourth reactor was approved by the government, but only after the objections of opposition parties were overcome [3]. In Sweden, the legislature voted to decommission two operating nuclear units, despite arguments from the operating utility and local members of parliament that the plant operates safely and economically [4].
  

• Nuclear waste issues. A central off-site facility is generally considered necessary for long-term storage of nuclear waste. But choosing a site for a facility can prove difficult. In the United States, it is unlikely that new nuclear construction will be considered before a solution to the nuclear waste problem is found. Taiwan has faced public opposition to all sites proposed. The European countries are performing research to determine the best site characteristics, but none has a permanent facility operating.
  

• Operating performance. Nuclear power plants generally have high fixed costs but low variable costs. As they increase output they become more economical. If significant time is lost in either planned or unplanned outages, their costs per unit of output will rise. In 1996, the average capacity factor of the world’s nuclear power plants was 73 percent [5]. Nine countries operated nuclear programs with average capacity factors above 80 percent, including Finland, whose four units maintained an average 91.5 percent capacity factorfor the year. In recent years, the worldwide average has been improving.

Regional Overview
Developing Asia

Countries in developing Asia with currently operating nuclear power plants include China, South Korea, Taiwan, India, and Pakistan. With the exception of South Korea, these programs are small, but all expect some growth in the future. At the end of 1996, these five countries had 18.0 gigawatts of nuclear capacity on line. By 2020, nuclear power plants are expected to be operable in North Korea as well (see box on page 92), andnuclear capacity for the region is projected to be between 31.9 and 75.7 gigawatts. South Korea, currently the largest operator of nuclear power in the region, with 11 operable units totaling 9.1 gigawatts, is projected to have between 11.9 and 28.0 gigawatts on line by 2020. The dramatic drop in Asian stock markets toward the end of 1997, and the resulting economic crisis in South Korea in particular, could reduce the likelihood of investment in new nuclear construction. Indeed, in the IEO98 low growth and reference cases, only the units already planned are projected to be built. China’s expected growth rate leads the region, reaching 9 times the current capacity by 2020 in the reference case.

At the end of 1996, 18 units were under construction in developing Asian countries, and as many as 16 more were in the planning stages. Seven of the units actively under construction at the end of 1996 were in South Korea, and one of those was connected to the grid during 1997. Wolsong 2, a 650-megawatt pressurized heavy-water reactor (PHWR), began commercial operation in July 1997. Two units remain to be completed at the Wolsong site [6]. The units under construction at other sites are all of the Korean standardized design, based on an advanced version of the ABB Combustion Engineering Nuclear Systems (ABB-CENS) System 80 pressurized-water reactor (PWR). ABB-CENS will provide design engineering and components for the new units [7].

China also plans to build additional nuclear power plants to meet rapid growth in electricity demand. The next two units at the Qinshan site are 600-megawatt PWRs of a Chinese design, although foreign companies have been contracted to supply major components. Construction began on Qinshan 2 and 3 in 1996, and the units are expected to be complete in 2003. Two additional 700-megawatt PHWRs supplied by Atomic Energy of Canada Limited will also be constructed at the site [8].

In Taiwan, GE Nuclear Energy was selected to provide two nuclear reactors for the Lungmen power station. Construction on the two 1,350-megawatt advanced boiling-water reactors (ABWRs) is not expected to begin until late 1998, with prospective dates for entering commercial service set at 2003 and 2004 [9]. Public opposition to new nuclear construction has been a problem in Taiwan, as has finding sites for low-level waste disposal. The Taiwan government has signed a deal to ship nuclear waste to North Korea for final disposal, which has raised concerns with several international groups. North Korea is not a member of the International Atomic Energy Agency, and there would be no way to monitor the handling of the waste [10].

Other Developing Countries

Other developing countries that currently operate nuclear power plants include Argentina, Brazil, and South Africa. Countries with the potential to have nuclear programs in place by 2020 include Cuba and Iran. Argentina’s two nuclear units provided 11 percent of the country’s electricity in 1996. Brazil’s one nuclear unit supplied just 1 percent of total electricity generation. South Africa has two nuclear units currently operable, which provided 6 percent of the country’s electricity generation in 1996. No new nuclear units are planned in South Africa.

Most of the other developing countries do not have the capital for large nuclear programs and, in fact, will likely require financial and technical assistance before undertaking nuclear power construction. Successful completion of Cuba’s Juragua station, where construction was abandoned after reaching 75 percent completion in the mid-1980s, will require international assistance. Russia has agreed to complete two units for Iran, at the Bushehr site, where construction was started in the 1970s.

Industrialized Asia

In the industrialized countries of Asia, only Japan has a well-established nuclear program, with 53 units totaling 42.4 gigawatts of operable capacity at the end of 1996. Japan’s nuclear share of electricity in 1996 was 33 percent. Two new nuclear units were brought on line during 1996: Kashiwazaki Kariwa 6 in January and Genkai 4 in November. A seventh unit was brought on line at the Kashiwazaki Kariwa site during 1997.

Japan has ambitious plans for further nuclear expansion, mainly as a means of reducing its dependence on imported fossil fuels. However, the uncertainties surrounding financial markets in Asia, as well as increases in public opposition to nuclear power in Japan, will affect new construction decisions. Japan’s nuclear capacity is projected to increase by 11.7 gigawatts—to a total of 54.1 gigawatts—by 2020 in the reference case. The low and high case capacity forecasts for 2020 are 42.9 gigawatts and 69.3 gigawatts. The expansion plan includes 11 units, totaling 12.5 gigawatts, in the construction pipeline at the end of 1996. One unit was near completion at year’s end; the other 10 units are in the planning stages. The reference case assumes that the 11 units will be completed by 2020, but that no additional units will be built. The low growth case assumes that no new construction will be completed by 2020.

Western Europe

Western Europe relies heavily on nuclear power for electricity. In 1996, nuclear generation from Western European countries represented 36 percent of worldwide nuclear generation. In France and Belgium, 77 and 57 percent, respectively, of the national demand for electricity was supplied from nuclear power plants. However, the overall trend in Western Europe is away from nuclear power builds. In fact, most countries in the region have frozen all nuclear construction plans. In the reference case, only France and Turkey are projected to have net increases in nuclear capacity between 1996 and 2020. Eight other West European countries are projected to have net decreases in total nuclear capacity due to plant retirements.

In France, Chooz-B1, a 1,450-megawatt PWR, supplied electricity to the grid for the first time on September 30, 1996. A second unit, Chooz-B2, was connected to the grid in April 1997. The two reactors are touted as the first wholly French designed PWRs, created by the French company Alsthom. The output from the two new reactors will be shared between France (75 percent) and Belgium (25 percent). France’s remaining two units under construction are more than 50 percent complete and are expected on line by 1998. No further nuclear expansion has been announced. In the Netherlands, the 55 megawatt Dodewaard plant was shut down permanently in March 1997. The small boiling-water reactor had operated well for 28 years but could not compete economically with other generating units [15]. The Swedish government, which has long discussed plans to phase out nuclear power, has voted to retire the two units at Barsebaeck, the first in 1998 and the second in 2001 [16]. It is expected that the operating state utility, Sydkraft, will fight the decision.

Competition in the electricity markets of Western Europe may be one cause of declining nuclear capacity in the future. The European Union energy ministers have agreed to open up the electricity market to competition, although it will affect only a small fraction of consumers in the next few years. The trend to deregulate and privatize electric utilities requires nuclear plant operators to focus on the competitiveness of their current operating costs, as well as future costs to build new reactors. In Spain, for example, the government and utilities have agreed to lower electricity rates by 8 percent over the next 5 years to prepare for competition [17]. The latest French study analyzing costs to build new technologies shows that new nuclear capacity would be the cheapest technology under a variety of scenarios; however, nuclear loses to natural gas combined-cycle units in the lowest natural gas price scenario [18], which assumes natural gas prices below $2.70 per million Btu and an exchange rate of around 5 French francs per U.S. dollar. (Because France imports all its natural gas, these scenarios must make assumptions about both gas prices and international exchange rates.) Nonfuel operating and maintenance costs at existing nuclear units in France have declined by 2 percent per year since 1992 [19].

North America

In North America, the United States, Canada, and Mexico all have nuclear programs. Although the United States has by far the largest amount of nuclear capacity in the region, reliance on nuclear power is similar in the United States and in Canada. In 1996, the nuclear share of electricity in the United States was 19 percent; in Canada it was 16 percent. Mexico’s two units supplied 5 percent of the country’s electricity during 1996. In the United States, one new unit (Watts Bar 1) came on line in 1996. There are no other U.S. projects actively under construction or planned, and no growth in nuclear capacity is expected in the region for the remainder of the forecast. By 2020, U.S. nuclear capacity in the IEO98 reference case is projected to be 51 percent lower than the 1996 level. In Canada, with no new orders projected in the reference case, nuclear capacity falls by 6.3 gigawatts from 1996 to 2020 as a result of retirements. Capacity projections for the region in 2020 range between 5.6 and 92.0 gigawatts in the low and high growth cases, based on different retirement assumptions.

In Canada, Ontario Hydro (OH), the operating utility for the majority of the country’s nuclear units, released an independent review of the management and operations of its nuclear power plants, showing poor performance and inefficient management throughout. OH later announced its intention to mothball seven of the oldest units—three at the Bruce A site and four at the Pickering A site. They will be taken out of service over the next year. The seven units may be refurbished and brought back on line eventually, but the first priority for the utility is to improve performance at the units that will remain operable. Increased generation from coal-fired plants will replace the electricity generation lost from the mothballed nuclear units [20].

Nuclear Power Reactors in North Korea

Source: Energy Information Administration, Office of Integrated Analysis and Forecasting.

In the United States, several nuclear units have recently been retired before their operating licenses expired. In Connecticut, Haddam Neck was shut down during 1996 for refueling and maintenance, and in January 1997 it was announced that the plant would remain closed permanently. The decision was based on an economic analysis which showed that replacement power would be cheaper than continued operation [21]. On August 6, 1997, the board of directors of the Maine Yankee plant voted to close the plant permanently. It was agreed that they could not run the plant economically, and after attempts to sell the plant were unsuccessful, they decided to shut it down [22]. Big Rock Point, the oldest and longest running reactor in the United States, was retired in August 1997. Its small size (67 megawatts) made it too expensive to operate in a competitive environment [23].

Deregulation of the U.S. electricity industry will be a major factor in the future for nuclear power in North America. Until decisions are made about stranded cost recovery and the future recovery of decommissioning costs, there will be little incentive to invest in new nuclear capacity. And decisions about the future of currently operating nuclear plants will increasingly be based on the competitiveness of their operating costs. Data compiled by the Utility Data Institute (UDI) show that the average cost of electricity from nuclear generation in the United States was 1.89 cents per kilowatthour in 1996, and that it has declined by 4 percent per year since 1993 [24]. Capacity factors for nuclear power units in the United States have also been improving. The average annual capacity factor for 1996 was 76.4 percent, down slightly from 1995, but still much higher than just 5 years ago, when it hit 70 percent for the first time in history. Worldwide, 5 of the top 10 units for 1996 (based on capacity factor) were U.S. plants, as were 23 of the top 50 [25]. Continued improvements in cost and performance will be needed if nuclear units are to remain competitive in the deregulated environment.

Eastern Europe/Former Soviet Union

In the EE/FSU region, 69 nuclear units produced 264.9 billion kilowatthours of electricity in 1996. More than 75 percent of that amount was generated in the FSU. Reliance on nuclear power varies in the region: Lithuania gets 83 percent of its electricity from nuclear power, Russia 11 percent, and Kazakhstan less than 1 percent. Several countries in the region have ambitious plans for additional nuclear capacity, but there are many challenges that will likely limit new nuclear builds. With the potential for future projects uncertain, the region’s nuclear capacity is projected to decline by 1.3 gigawatts between 1996 and 2020 in the reference case. A loss of 25.5 gigawatts is projected in the low growth case and a gain of 12.5 gigawatts in the high growth case. Russia and the Ukraine have 13 units in the construction pipeline, of which 7 are at least 50 percent complete. The prospects for their completion depend on the ability to obtain financing.

During 1996 Romania brought on line a Canadian-built reactor at Cernavoda—the first Western-designed nuclear power plant in Eastern Europe. In the Ukraine, the Chernobyl 1 unit was shut down in November 1996; early in 1997 it was announced that this closing would be permanent. The Ukraine has signed a Memorandum of Understanding that all units at Chernobyl will be permanently shut down by 2000, and it was determined that repairs necessary to keep unit 1 operating would not be cost-effective, given that it would soon be closed. There are still two units operable at the Chernobyl site, and the government has suggested it may need to continue operating them after 2000 to meet electricity demand. The Energy Minister has expressed frustration with the lack of funds promised to aid the Ukraine in completing two units under construction, and has suggested that the Chernobyl units can not be shut down until new units are operable and able to provide replacement power [26].

The lack of indigenous energy resources in many countries of the EE/FSU, combined with the problems in financing new nuclear projects, is resulting in continued operation of reactors that are considered unsafe by Western standards. Russia has significant fossil fuel resources, but significant amounts of its coal, natural gas, and oil supplies are being exported in exchange forhard currency. The Ministry of Atomic Energy (Minatom) of Russia had announced ambitious plans to begin bringing the next generation of nuclear reactors on line shortly after 2000 to replace older units that would be shut down. More recently, however, Minatom has announced that plans to build new reactors have been delayed due to lack of funds, and no new reactors are expected to be operable until at least 2010. As a result, the operation of existing units may be extended by 5 to 10 years [27]. The Ukraine is facing huge energy debts to foreign suppliers of natural gas and oil. Nuclear power satisfied 44 percent of total electricity in the Ukraine in 1996, and the country is counting on completion of new units to help provide energy independence. Armenia’s one unit provided 37 percent of the nation’s electricity in 1996, and Lithuania’s two units provided 83 percent of its total electricity. Both countries are operating older Soviet-designed reactors that, according to many experts, are unsafe and would never be licensed in the West [28].