By Anna Driver and Eileen OGrady, Reuters
HOUSTON — The crisis in Japan means higher costs, canceled projects and laser-like regulatory scrutiny for the global nuclear industry, signaling the likely end to its decade-long growth spurt. The unfolding disaster at Tokyo Electric Power Co.’s Fukushima complex is not yet a week old, and regulators around the world are already making policy changes sure to increase costs and limit financing for projects touted as one of the best ways to cut carbon emissions.
U.S. Secretary of State Hillary Clinton flagged her concern about industry risk on Wednesday, days after senators had asked for a review. The United States relies on nuclear energy for 20 percent of its power, and until now the Obama administration’s energy policy has been nuclear-friendly. “What’s happening in Japan raised questions about the costs and the risks associated with nuclear power, but we have to answer those,” Clinton told MSNBC. Authorities in China, the industry’s biggest growth market, ordered a safety crackdown on Wednesday that threatens a burgeoning national expansion program. Japan’s crisis will give more power to Chinese nuclear safety officials, said Mark Hibbs, an expert on nuclear policy in China and other countries at the Carnegie Endowment for International Peace. Germany went a step further, shutting down seven older reactors this week in response to the incident in Japan.
Such actions promise to trigger a ripple effect around the world, throwing up hurdles for power generation companies on the brink of huge expansion. On the drawing board are plans to more than double the number of nuclear power plants worldwide. There are 477 proposed or planned plants, compared with the 441 already in operation. China, Russia and India account for the bulk of the growth, according to data from the World Nuclear Association. A pullback to review safety, let alone impose new regulations, will affect companies such as Shaw Group, which builds reactors, uranium producers that supply fuel and those that design the piping and instrumentation. Operators in the United States will face more scrutiny from the government for new units, requiring them to spend more to build to a higher standard, analysts said. Already the capital costs to build a plant are high — more than US$4,000 a kilowatt for a nuclear plant. That’s nearly twice as much as a conventional coal-fired plant at US$2,200 a kilowatt and more than four times as much as a gas-fired plant, according to a Brattle Group study. New regulations could put some nuclear plants in jeopardy.