International Energy Outlook 1999

Nuclear electricity generation remains flat in the IEO99 reference case, representing a declining share of the world’s total electricity consumption. Net reductions in nuclear capacity are projected for most industrialized nations.

In 1997, a total of 2,276 billion kilowatthours of electricity was generated from nuclear power worldwide, providing 17 percent of the world’s electricity generation. Among the countries with operating nuclear power plants, national dependence on nuclear power for electricity varies greatly (Figure 53). Ten countries met at least 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 2.5 percent per year in total electricity demand through 2020. Over the long term, of the regions shown in Figure 53, 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.

Source: International Atomic Energy Agency, Nuclear Power Reactors in the World 1997 (Vienna, Austria, April 1998).

In the IEO99 reference case, worldwide nuclear capacity is projected to increase from 352 gigawatts in 1997 to 356 gigawatts in 2010. After 2010 it begins to decline, reaching 311 gigawatts in 2020. Aggressive plans to expand nuclear capacity, mainly in the Far East, drive the near-term increase. Plant retirements in the United States and other countries exceed new additions, contributing to the decline later in the forecast (Figure 54). Developing Asian countries are projected to add 30.6 gigawatts by 2020, but the industrialized nations overall lose 69.9 gigawatts. Nuclear generation in the reference case remains flat over the forecast period, representing a declining share of electricity consumption.

Sources: History: International Atomic Energy Agency, Nuclear Power Reactors in the World 1997 (Vienna, Austria, April 1998). Projections: Based on detailed assessments of country-specific nuclear power programs.

Three nuclear capacity scenarios were developed for IEO99, to provide a range of outcomes reflecting the uncertainty surrounding future investment in nuclear technology (Figure 55 and Table 16). The reference case reflects a continuation of present trends; the low and high cases present more pessimistic and 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 if the economics do not justify continued operation, resulting in the retirement of almost one-quarter of current units before their licenses expire. Six units are projected to receive license renewals for an additional 20 years, but the remainder are assumed to retire at the end of their current licenses. 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 Appendixes A, B, and C.

The low growth case projects a more significant decline in nuclear capacity orders, along with additional retirements of existing units. In the United States, reactors are assumed to face higher aging-related expenses, leading to more early retirements. The forecast for worldwide capacity in 2020 is 178 gigawatts, a 49-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 aging effects will be limited, causing more reactors to seek license renewals. The high growth projections generally are 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 retirement dates. IEO99 does not address the Kyoto Protocol agreement; however, if there are limits on carbon emissions in the future and, in particular, fees associated with carbon emissions, the relative economics of operating nuclear power plants could improve (see discussion on "Nuclear Power and the Kyoto Protocol").

Nuclear generation in the reference case remains fairly flat, with a declining share of the world’s electricity consumption (Figure 56). Some key developments affecting the nuclear power industry in 1998 include:

Sources: 1996: Energy Information Administration (EIA), International Energy Annual 1996, DOE/EIA-0219(96) (Washington, DC, February 1998). Projections: EIA, World Energy Projection System (1999).

Countries in developing Asia currently operating nuclear power plants include China, South Korea, Taiwan, India, and Pakistan, and all expect some growth in the future. At the end of 1997, the five countries had 18.6 gigawatts of nuclear capacity on line. By 2020, nuclear capacity in the region is projected to be between 30.0 and 76.9 gigawatts, including at least one nuclear unit in North Korea, and—in the high growth case—new programs in Indonesia, Thailand, the Philippines, and Vietnam.

The current Asian economic crisis may cause financing concerns in the short term and, possibly, delay orders of nuclear plants. Recovery is expected for the region’s national economies over the next several years, however, along with a return to baseline projections for long-term economic and energy demand growth. South Korea, currently the largest operator of nuclear power in the region, with 12 operable units totaling 9.8 gigawatts, is projected to have between 10.7 and 21.9 gigawatts on line by 2020. China’s expected growth is even more striking: by 2020 China is projected to have at least 8.7 gigawatts of nuclear capacity operating, four times the current capacity; and in the high nuclear growth case, China’s nuclear capacity is projected to reach 11 times its current level.

Several new units were completed in South Korea during 1997 and early 1998. Wolsong 2, a 650-megawatt pressurized heavy water reactor (PHWR), began commercial operation in July 1997, and a third unit at the site was completed a year later [16]. The fourth and final unit at the Wolsong site should be brought on line during 1999. The Wolsong units were built and designed by Atomic Energy of Canada Limited (AECL), but all remaining units under construction are of the designated Korean standardized design. The third unit at the Ulchin site, a pressurized light-water reactor (PWR) of standard design, entered service in 1998 [17].

The dramatic fall in the Asian stock market 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. The Korean government’s Long-term Power Development Plan was delayed by 8 months as a result of the economic crisis, and forecasts of electricity demand growth were scaled back. As a result, the schedule for new power plants was pushed back to accommodate slower growth [18]. A further problem in developing new nuclear power plants in South Korea could be siting. In late 1998, the president of Korea Electric Power Corporation (Kepco) decided to reopen the site selection process—disregarding a list of potential sites prepared by his predecessor [19]. Nuclear proponents argue that this will make it more difficult to find new sites, but Kepco claims the decision was made to include the communities in the process, making it more democratic.

China also has ambitious plans to build additional nuclear power plants to meet rapid growth in electricity demand. Construction is underway for the next two units at the Qinshan site, 600-megawatt PWRs of a Chinese design. Two additional units to be constructed at the site will be 700-megawatt PHWRs supplied by AECL. Construction has also begun on two PWRs of French design at Lingao. Russia and China finally signed a contract for two 1,000-megawatt units based on a modernized Russian design [20]. The project, which has been under discussion for several years, was delayed when China changed the proposed location. The units will be built in Jiangsu Province, on China’s northeastern seaboard, where there is a pressing demand for electricity.

In Taiwan, two 1,350-megawatt advanced boiling water reactors (ABWRs) are under construction at the Lungmen power station. Currently, there are no plans for any further nuclear investment in Taiwan, and there is strong opposition to nuclear power from the public. The Taiwan state utility has stated, however, that increasing nuclear energy would be the most effective method to reduce carbon dioxide emission without sacrificing economic development [21]. Government officials have said that no new nuclear plants will be built before 2020.

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, Iran, Egypt, and Turkey. Argentina’s two nuclear units provided 11 percent of the country’s electricity in 1997. Brazil’s one nuclear unit supplied just 1 percent of total electricity generation. South Africa has two nuclear units currently operable, which provided 7 percent of the country’s electricity generation in 1997. No new nuclear units are planned in South Africa. Argentina has one unit under construction, and Brazil has two units in the construction pipeline. Given the uncertainties, there is a wide range of possible capacity outcomes (1.9 to 12.4 gigawatts) between now and 2020.

Most of the other developing countries do not have the capital for large nuclear programs, and it is likely that they would need financial and technical assistance before undertaking nuclear power construction. Successful completion of Cuba’s Juragua station will require international assistance. Russia has agreed to complete two units for Iran, at the Bushehr site, where construction was started in the 1970s.

A Turkish utility is in the process of evaluating three bids from suppliers for Turkey’s first nuclear station. Bids were received from Nuclear Power International (Siemens design), AECL, and Westinghouse. Turkey has twice previously requested bids but has yet to follow through with an order. While the new generating capacity is needed in Turkey, the political parties have not shown much support for nuclear projects [22].

In the industrialized countries of Asia, only Japan has a well-established nuclear program, with 54 units totaling 43.8 gigawatts of operable capacity at the end of 1997. Japan’s nuclear share of electricity in 1997 was 34 percent. A 1,315-megawatt boiling water reactor (BWR) was brought on line at the Kashiwazaki Kariwa site during 1997; this is the seventh and final unit planned for the site. In March 1998, Japan’s first nuclear unit—Tokai 1, a 159-megawatt gas-cooled reactor—was permanently shut down [23].

Japan has ambitious plans for further nuclear expansion, mainly to help achieve energy independence; however, the uncertainties surrounding the financial market in Asia, as well as increases in public opposition to nuclear power in Japan will affect new construction decisions. In the IEO99 reference case, Japan’s nuclear capacity is projected to increase by 9.7 gigawatts between 1997 and 2020. The capacity forecasts for 2020 range from 28.1 gigawatts in the low nuclear growth case to 65.8 gigawatts in the high growth case. The current expansion plan includes 10 units assumed to be completed by 2010 in the reference case. After 2010, the reference case assumes that the current level of nuclear capacity will be maintained through 2020 either by the operation of existing units past 40 years or by replacing retired units with new nuclear capacity. The low growth case assumes that all construction plans will be deferred, and that no new construction will be completed by 2020.

Japan’s nuclear power future is uncertain not only because of the economic crisis. After decades of public acceptance of nuclear power, public opinion has begun to turn, apparently as a result of a recent series of accidents and coverups. A fire and explosion at the Tokai-mura reprocessing plant, although resulting in negligible impacts on and off site, was a significant event. Power Reactor and Fuel Development Corporation (PNC) officials allegedly tried to cover up elements of the incident, leading to criminal charges and investigations, and negative publicity in Japan. Concern with PNC started after the 1995 Monju reactor sodium leak, when company officials were alleged to have altered video footage showing the damage from that event. A final event in 1998—a low-level radiation leak at PNC’s Fugen Advanced Thermal Reactor, which went unreported for more than 24 hours—further eroded public confidence in the company [24]. Government plans still call for future development of nuclear power, especially as a means to cut greenhouse gas emissions, but whether the plans can be completed without strong public support remains to be seen.

Western Europe relies heavily on nuclear power to satisfy its electricity demand. In 1997, nuclear generation from Western European countries represented 37 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. Overall, however, the trend in Western Europe is away from nuclear power builds, and most countries in the region have frozen all nuclear construction plans. In the reference case, only France is projected to bring one new nuclear unit on line between 1997 and 2020. Eight other West European countries are projected to have net decreases in total nuclear capacity as a result of plant retirements.

In France, Chooz-B2, a 1,455-megawatt PWR of a new French design, was connected to the electricity grid in April 1997. Another unit of the same design, Civaux 1, was brought on line just before the end of 1997 [25]. After the completion of one more unit, no further units are planned for construction in France. In the Netherlands, the 55-megawatt Dodewaard plant was shut down permanently in March 1997. The small BWR had operated well for 28 years, but it could not compete economically with other generating units [26]. Finland may become the next European country to order a new nuclear unit. Two nuclear utilities in Finland have undertaken environmental impact assessments for additional nuclear units at their respective sites [27]—an essential prerequisite under Finnish law before any new development can be considered. Two units at the Loviisa site recently received approval for increases in output, as well as 10-year extensions of their operating licenses.

Both the Swedish and German governments have voted for eventual phaseout of all nuclear power capacity. The Swedish government is in the midst of trying to force the first closure at Sydkraft’s Barsebaeck plant. The utility is pursuing a number of legal actions to save the reactor from forced closure; however, it is also negotiating with the government on various compensation plans in return for the shutdown of the plant.

The new German government has also called for a phased shutdown of all 19 German nuclear stations, which currently provide more than 30 percent of the country’s electricity [28]. The new coalition partners, the Social Democratic Party (SPD) and the environmentalist Green Party, disagree on the progress of the phaseout, with the SPD suggesting it will occur over several decades and the Greens originally demanding that all stations be shut down within 5 years. The coalition agreement does set a deadline of 1 year to complete talks with the nuclear industry on future energy policy, after which legislation will be put in place to close plants without compensation. The German power industry has threatened to sue the government for damages if plants are shut down without their consent [29].

The three nations of North America—the United States, Canada, and Mexico—all have nuclear power programs. The U.S. program is by far the largest in the region. In 1997, the nuclear share of electricity generation in the United States was 18 percent; in Canada it was 14 percent; and Mexico’s two units supplied 7 percent of the country’s electricity. Total nuclear capacity in the region is expected to decline over the forecast in all cases, as existing units age and are removed from service. By 2020, U.S. nuclear capacity is projected to decrease by 51 percent from the 1997 level in the reference case, due to retirements and the lack of new orders. In Canada, with no new orders projected in the reference case, capacity decreases by 4.0 gigawatts by 2020. Projected capacity in the region in 2020 ranges between 35.1 and 96.5 gigawatts under the different retirement assumptions of the low and high nuclear growth cases.

Ontario Hydro (OH), the operating utility for the majority of the nuclear units in Canada, has begun an extensive program to improve the performance of its nuclear plants. As part of the plan, OH shut down seven of the oldest units—three at the Pickering A site (where a fourth unit has been dormant since 1996) and four units at Bruce A. Five of the seven were off line by the end of 1997, and the remaining two were shut down in the spring of 1998. The units may be refurbished and brought back on line eventually. The first priority for the utility, however, is to improve performance at the units that remain operable. OH has budgeted $3.5 billion (Canadian) for fossil fuel and purchased power to make up for the planned 5-year shutdown of the older units [30].

The deregulation of the electricity industry in the United States is affecting the Nation’s commercial nuclear industry in several different ways: some units have been shut down prematurely; others have been sold; and still others are expected to continue operating beyond current retirement dates. Several units were retired during 1997 and 1998. In August 1997 both the Maine Yankee and Big Rock Point reactors were shut down permanently [31, 32]. In 1998, Commonwealth Edison permanently closed its two Zion units, and the Millstone 1 unit was retired in Connecticut. The two utilities applying for license renewal are Baltimore Gas and Electric and Duke Power, for the Calvert Cliffs and Oconee plants, respectively. A decision from the Nuclear Regulatory Commission is not likely for 3 to 5 years, after an extensive review of technological and environmental issues.

Low-cost nuclear units are competitive with other technologies, and reductions in costs may be possible through improved management. In the first deal of its kind, GPU Incorporated sold its Three Mile Island 1 unit to the U.S.-British joint venture AmerGen Energy Company. AmerGen was created to buy U.S. plants that may be struggling and improve operations so that they become competitive and commercially successful in the restructured market. It is a partnership between British Energy (operators of 15 nuclear reactors in the United Kingdom’s deregulated electricity market) and PECO Energy, operators of the Peach Bottom and Limerick stations in Pennsylvania.

There were 69 nuclear units operating in the EE/FSU region during 1997, producing 250.7 billion kilowatthours of electricity; 75 percent of the electricity from nuclear plants in the region was generated in the FSU. Reliance on nuclear power varies in this region, with Lithuania supplying 82 percent of its electricity from nuclear power, Russia 14 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 are likely to limit new nuclear builds. With the potential for future projects uncertain, the region’s nuclear capacity is projected to decline by 5.5 gigawatts between 1997 and 2020. The low and high growth cases forecast a range of outcomes, from a loss of 25.5 gigawatts to a gain of 23.9 gigawatts in total nuclear capacity by 2020.

Romania’s first full year of operation of the Cernavoda nuclear station produced 10 percent of total national electricity production in 1997, and the reactor, a Canadian-designed PHWR, achieved a capacity factor of 87 percent [33]. Construction of Mochovce 1 in Slovakia was near completion in 1998. Several teams of international experts planned to inspect the reactor before startup to review safety improvements. The project was completed by Czech and Russian engineers, with limited German and French involvement [34]. The upgraded design attempted to incorporate all essential safety modifications recommended by the International Atomic Energy Agency. Kazakhstan has completed feasibility studies for a plant in the southern part of the country and was expected to make a decision by yearend 1998 on whether to build the three-unit nuclear station [35]. The proposed plant would be designed and constructed with Russian help. Kazakhstan is considering nuclear power expansion because it has substantial uranium reserves, and the main alternative, coal, is very expensive.

Russia is in the midst of an economic crisis, causing potential investors to leave the market and delaying new nuclear construction, which is dependent on private financing. A further concern is that the utilities have been unable to pay workers for several months, driving morale down and causing threats of worker strikes. Additionally, reactor maintenance and repairs have been delayed because of a lack of funds, causing ongoing concerns over reactor safety. Safety of older reactors is also a concern in the Ukraine, where debate continues regarding when the final operating unit at the Chernobyl site will be permanently closed. An agreement was made by the Ukraine to close the station by 2000 in exchange for financing to complete two new nuclear reactors currently under construction. The financing has not come through as promised, however, and Ukraine officials have threatened to keep the Chernobyl unit running until the new reactors are completed and able to replace the power currently provided by the older unit.