The expression “no-surprise scenario” is, at some level, inaccurate:
most decisions, economic and political, are made under uncertain conditions and
with the knowledge that such uncertainty exists. Thus, in many cases (and where
possible), uncertainties are hedged. The no-surprise scenario is not a single scenario,
but a set of boundaries on what is considered reasonable and to be planned for.
Below, we describe what might be considered the generally accepted view of the course
of future events, the view that underlies, for instance, the assumptions of national
and international government agencies, utilities, and vendors.
The present is an unusually uncertain time for nuclear power for two main reasons.
The first relates to economics. To a varying extent, the developed countries
in North America and Europe that use or are considering using nuclear power are
facing high unemployment along with high public debt. There is little agreement
among those countries about how to face these difficulties: their responses
involve different mixtures of economic stimulus, austerity measures, and other policy
tools. Moreover, there is no assurance that changes in government will not affect
The second uncertain factor is government action on climate change. If governments
at the city, state, or national level impose some form of a price on greenhouse
gas emissions, this development will affect the future of nuclear power and that
of the other means of providing energy; similarly, “green” subsidies
will make some investments more attractive and others less. As of this writing,
a climate bill remains stalled in the U.S. Senate, presumed dead. Other major greenhouse
gas emitters lack coherent and effective plans to reduce emissions, and despite
progress at the Cancun Climate Summit in Winter 2010, no strong international consensus
has yet emerged.
Those two uncertainties are already reflected in different ways in some national
plans for investing in nuclear energy: for example, China has accelerated its nuclear
plans, while the United States has slowed its nuclear development. These differences
point to the challenges inherent in defining a single global nuclear
future. The current state of the nuclear industry is somewhat fragmented, depending
strongly on local political and economic conditions. Most energy forecasts rely
on a complicated array of economic, social, environmental, and political factors.
Assessing the place of nuclear energy in the future mix brings with it an additional
set of complications. Waste, reactor accidents, proliferation and security threats,
and changes in public perception are dealt with differently in different regions.
A serious accident, while unlikely to bring about a lasting shutdown of the 20 percent
of electricity generated by nuclear in the United States, let alone the higher numbers
in France, Japan, and South Korea, could prevent or seriously delay expansion. Conversely,
accidents are unlikely to impose more than a temporary delay in the plans of China,
India, and Russia, where public opinion is not as determinative and the need for
electric power growth is greater than in developed countries. A continuing or deepening
recession could induce a major downward trend globally by reducing both demand and
financing. However, because different regions have weathered the recession
with varying degrees of success, the post-financial crisis landscape for nuclear
power will likely be regional in character.
However, it is not impossible to talk sensibly about a no-surprise scenario on a
global scale. The rapid development of communications technology would surprise
even the most prescient observers of the 1970s, and business, politics, and social
activism have globalized in ways once unimaginable. The economic, political, and
technological aspects of nuclear power have components that do not respect national
boundaries. It is therefore useful to consider a global picture, albeit one constructed
as a sum of disparate parts from scenarios at the national and regional levels.
This piecewise approach can help differentiate those factors that affect nuclear
power within the country or region from those that are likely to transcend boundaries.
In the following sections, we build the global scenario from its regional components,
focusing not on specific projections but on the current conditions that create
assumptions used in building models. We do not dispute that other forecasts consider
different scenarios, and these may indeed turn out to reflect future reality
more accurately than the scenarios discussed below. After all, nearly everything
is predicted by someone. In defining the no-surprise scenario, we are not
interested in predicting the future with any degree of accuracy, but in collecting
the conventional wisdom with respect to the nuclear sector in the regions we consider.
The United States
While the recession slowed investment plans, the medium-term situation
in the United States appears relatively favorable to nuclear power. Although the
outcome of specific U.S. DOE loan guarantee reviews is uncertain, the DOE
has available, as of January 2011, $10.2 billion in guarantee authority.12 The timescale for new reactors could continue to
be delayed depending on politics and the length of the current economic downturn:
consider, for instance, that demand for electricity in the United States has gone
down in the past three years. If the increases in energy demand projected earlier
are realized,13 the no-surprise scenario
foresees nuclear power persisting at roughly 20 percent of U.S. electric generation.
This scenario assumes that the current nuclear generating capacity is extended14 and that currently planned
new coal- and gas-fueled generators come online in approximately the current proportions.
The United States generates about 30 percent of the world’s nuclear power;
given current plans, this share is expected to decrease.
The U.S. situation at the front and back ends of the nuclear fuel cycle is also
changing. While the United States was the world’s largest nuclear exporter
in the early decades of the nuclear age, there is no longer a purely U.S.owned nuclear
reactor exporting company, though there are extensive commercial agreements: for
example, between Toshiba, the majority owner of the former U.S. reactor builder
Westinghouse, and the Shaw Group, a U.S. engineering and construction firm.15 The United States continues to be active in other
areas of the international nuclear market, including with respect to nuclear fuel.
AREVA, URENCO, and the U.S. Enrichment Corporation are either building or planning
to build new enrichment facilities in the United States. At the back end of the
fuel cycle, there is at present no approved final disposal method for civilian
nuclear spent fuel in the United States. Yucca Mountain has been closed, and a Blue
Ribbon Commission on America’s Nuclear Future has been appointed to provide
recommendations for developing a safe, long-term solution to manage the nation’s
used nuclear fuel and nuclear waste.16
A game changer would be an event or trend that either entirely shuts
down new nuclear plans or drastically increases the role of nuclear in the U.S.
energy mix. For either outcome to materialize, new investments in the tens of billions
of dollars over and above what is now planned, whether in alternative generation
if nuclear power were to be shut down or in additional nuclear generation if it
were to be increased, would have to be made. These investments would be required
of the utilities and industry, the universities that educate the kinds of engineers
needed, and, directly or indirectly, the government. At present, such excursions
are not part of the no-surprise scenario. Rather the U.S. “game” is
to extend the lifetime of current reactors as much as possible and, if loan guarantees
hold up, to build a few new ones.
Despite current administration and congressional support, and aside from concerns
about slowed demand, the domestic U.S. market regarding nuclear power is characterized
by extreme caution: nuclear power, as one longtime observer has remarked, is nobody’s
favorite—or at least no politician’s or investor’s favorite. Growing
concerns about climate change have led influential environmental campaigners
to reluctantly support nuclear energy. Secretary of Energy Steven Chu, representing
the Obama administration’s view and that of a significant group in Congress,
has repeatedly said a clean energy standard could include clean coal and nuclear
along with renewables.17 Nevertheless,
the future of nuclear power remains vulnerable to a serious safety or security incident,
particularly if it affects any new facility.
The European nuclear landscape is as diverse as Europe itself. The
proportion of electricity generated by nuclear power ranges from none in Austria,
Denmark, Greece, Ireland, Portugal, and Norway to more than 80 percent in France
and close to 100 percent in some small Eastern European countries. The political
and economic situations, as well as popular attitudes to nuclear power, differ widely
among EU member states. This diversity means that there is no single European no-surprise
scenario. However, as with the global scenario, we can construct a picture of the
expected European nuclear future as the sum of disparate parts. In the short term,
investment and licensing activities indicate that the role of nuclear power is poised
to remain roughly constant over the next few decades. In those countries that currently
utilize nuclear power, there are no immediate plans for substantially increasing
the rate of investment. Countries may, of course, change their future energy policies
by eliminating or adopting nuclear power: Germany, Sweden, and Italy have recently
reversed course. However, the overall European scenario is unlikely to change by
any large percentage.
Several European states have long been major nuclear exporters. France is a large
exporter mainly through the AREVA Corporation; Germany and the United Kingdom also
participate in exports on their own and via URENCO, a British-Dutch-German jointly
owned enrichment facility that provides about a quarter of enrichment services in
Nuclear power provides about a third of total electricity for the European Union,
amounting to nearly 30 percent of the world’s nuclear power. Under the no-surprise
scenario, this world share is expected to decline. As with the United States, upward
departures from this scenario are not now considered likely. The vulnerability of
the nuclear power industry to serious incidents varies by country. The same uncertainties
that affect the United States—concerns about the length of the current recession,
its impact on demand, and the lack of global policy agreement regarding climate
change—also affect many European states.
Japan has increased its nuclear power generation, opening eight
new plants last year. The contribution of nuclear to total power production is about
30 percent, constituting about 9 percent of total nuclear power generated worldwide.
Japan has a complete fuel cycle facility and supporting technology. Japan’s
nuclear exports are carried out mainly through two major Japanese-Western owned
companies, the General Electric-Hitachi and Toshiba-Westinghouse combines. The country
has very recently decided to support nuclear exports more actively than in the past,
in particular to India, Vietnam, and, controversially, Middle Eastern countries.
The 30 percent domestic share of total power is slated to increase to 40 percent
under present plans. These plans are likely to be carried out in part because the
cost of nuclear power is expected to decline in Japan relative to hydrocarbon-fueled
power, and in part because an increased competition for those hydrocarbons from
developing countries will heighten the strategic value of nuclear electricity. Those
factors have in the past overridden shorter-term economic concerns—nuclear
investments continued at reduced levels through the long Japanese economic slowdown—and
they are likely to continue to do so in the future. In view of the Fukushima accident,
however, any prediction about the Japanese nuclear future is more than usually uncertain
at this time.
Nuclear power provides about 40 percent of South Korea’s electricity,
amounting to roughly 6 percent of world nuclear electricity production. This share
is slated to increase to 60 percent of South Korea’s electricity generation
under the no-surprise scenario. Like Japan, South Korea has a strong nuclear infrastructure
and track record, and this projection appears reasonably well assured. Many of the
same economic and strategic arguments that apply to Japan also apply to South Korea.
There has been little serious political opposition to the program in the last thirty
years, and such opposition as exists has been caused by seeming incompetence or
carelessness, not by fundamentals. A major factor in South Korea’s plans is
positioning the country to become a leader in exporting nuclear technology; to this
end, South Korea recently won an order to build four reactors in the United Arab
Emirates. South Korea has also shown a strong interest in acquiring enrichment and/or
reprocessing facilities. It is currently negotiating on this subject with the United
States, whose permission is needed under existing arrangements. South Korea has
been less affected by the current economic downturn than most of its fellow advanced
India currently has nineteen nuclear power plants (two of which
began commercial operation in 2010) and more than 3 GWe of nuclear capacity under
construction. As part of a major development push involving the entire energy sector,
India plans nearly to double this nuclear capacity in the next twenty years. Under
present plans, this increase will comprise indigenously developed pressurized heavy
water reactors; light water reactors from France, Russia, and other suppliers; advanced
heavy water reactors based on the thorium cycle; and fast breeder reactors, the
first of which is anticipated to come online in 2012. Therefore, the official
scenario for India is one of rapid development, but there is considerable uncertainty
regarding these ambitious plans. Given four different reactor technologies, a new
fuel cycle based on thorium, and an R&D and industrial infrastructure still
being developed, many view these government plans as an upper limit for the expansion
of the nuclear sector in India. If the plans are realized, India would produce more
than 1 percent of the world’s nuclear electricity. India has also continued
to grow during the current recession and is increasingly participating in the international
nuclear market. The Fukushima disaster has raised India’s concerns about regulatory
effectiveness and tsunamis in particular and may result in reform of the regulatory
China’s nuclear power plans are both larger in scope and more
assured, based on past performance, than India’s plans. The 12th Five-Year
Plan anticipates growth from the present 13 GWe to about 40 GWe (from eleven to
twenty-five plants) by 2015,18 and
plans thereafter are much more ambitious.19
Financing and approval exist for at least the initial stages of this growth, and
the necessary infrastructure is developing and keeping pace with the construction.
Nuclear expansion is part of both a move away from the dominance of coal and an
emphasis on strategic industries, which include new energy technologies such as
nuclear power, as well as contributing industries such as materials R&D. Nevertheless,
the pace of development has raised flags of caution, not least from the State
Council Research Office (SCRO), which makes independent policy recommendations
to the State Council on strategic matters. “Going too fast could threaten
the long-term healthy development of nuclear power,” the SCRO has said.20 The SCRO also noted that introducing a safety culture
takes longer than technical training, that China has fewer nuclear regulators per
reactor than other countries, and that regulators in China are less well paid than
others in the industry.21 In
partial response, some Chinese organizations, notably the Guangdong Nuclear Power
Corporation, are extending and standardizing the training of nuclear reactor operators.
Because of the ambitious scope of China’s plans (China’s 2030 target
of 200 GWe is about half the world’s total nuclear power capacity today),
the size of its current effort, and the relative newness of its nuclear industry,
it is difficult to call any projection in China’s case a no-surprise
scenario: the government scenario itself is surprising, yet no particular deviation
from it is any more probable. The scenario represents an upper limit on what could
be accomplished. If that ambitious upper limit is approached, China would become
the most important global actor in the nuclear power sector.
Russia now generates about 16 percent of its electricity from nuclear
power and plans to increase that share to 25 percent in the next two decades, a
goal that would require doubling the existing number of reactors. While timescales
are uncertain, Russia’s past record, along with the existing infrastructure
and financing, makes it likely that those plans will be realized, although
perhaps not on the officially declared schedule. If they are, Russia will
produce around 10 percent of the world’s nuclear power, a share that will
probably decrease in light of India’s and China’s plans.
Russia has a full fuel cycle facility and has been a strong international civilian
nuclear supplier. A recent memorandum of understanding between Siemens, the German
high-technology industrial supplier, and Rosatom, the state corporation controlling
nuclear activities in Russia, could presage a stronger entry into that field.
The Rest of the World
More than 90 percent of the world’s nuclear power is generated
in the countries listed above, with the United States, the European Union, and Japan
alone accounting for 70 percent of the total. If nuclear energy begins to appear
attractive and feasible for many other countries, this picture of dominance could
change. Developing countries that have expressed interest in nuclear power include
Algeria, Cameroon, Chile, Egypt, Georgia, Ghana, Indonesia, Iran, Jordan, Kenya,
Malaysia, Mexico, Mongolia, Morocco, Namibia, Nigeria, the United Arab Emirates,
and Vietnam. While these countries are often ignored in discussions of the global
nuclear future, the expansion of nuclear power to the developing world has the potential
to change drastically the debate surrounding nuclear issues.
It is difficult to make detailed predictions about such a diverse group of
countries, but the energy sectors in many developing countries have certain aspects
in common. Access to reliable electricity is limited, particularly in rural and
impoverished areas. Important sources of energy include hydro power and biomass,
both of which have deleterious environmental impacts. Finally, the transmission
and distribution infrastructure is weak compared to that in more developed countries,
leading to losses of 15 to 30 percent compared with 7 percent reported in OECD countries.
These differences mean that efficiency and conservation measures are highly
cost-effective investments in developing countries, while at the same time, an ever-increasing
demand not present in the West requires the constant introduction of new capacity.
Additionally, financial constraints may favor solutions that are inexpensive
in the short term even though they may not make the most economic sense in the long
term. Given the high up-front cost of nuclear power and often limited grid capacity,
the no-surprise scenario vis-à-vis nuclear energy in the developing world
will likely involve increased discussion and expressions of interest, with relatively
few serious building commitments.
Technology transfer agreements, efficiency improvements, and indigenously
developed solutions will all play a part in the future energy mix of the developing
world. Nuclear energy may enter the picture for reasons of political prestige or
competition, cooperation agreements with regional powers, or a desire to add value
to domestic uranium or thorium resources. It may become more attractive if lower-cost
suppliers with few political demands enter the market, or by suppliers that offer
“cradle to grave” nuclear power programs, thus relieving their customers
from concerns over acquiring fresh fuel and disposing of spent fuel. Developing
countries that wish to adopt nuclear power could also look to regional leaders for
guidance, assistance, or examples of how to develop a program. The nuclear sectors
in South America and Africa are dominated by Brazil and Argentina, in the former,
and South Africa, in the latter. The decisions of these regional leaders could have
ramifications for the energy policies of their regions. It is fair to say
that the no-surprise scenario for the developing world is prone to more variations
than that in the developed world.
The Global Picture
These regional scenarios, some aspects of which are summarized in
Table 1, can be used to assemble a global no-surprise scenario. This projection,
based on current investments and the political and economic factors that underlie
them, is one of growth by tens of reactors in India, China, and South Korea over
the next twenty or thirty years, slower growth in Japan, and replacement, alongside
some growth, in the United States and the European Union. However, we note that
given the large nuclear power fleet in the United States and EU countries,
the replacement market there over the next several decades could be quite large.
Table 1: Generation of Nuclear Electricity, in Terawatt-Hours (TWh), by State
or Group of States, in 2009
TWh Generated (2009)
Replacement, some growth
No disposal policy
Replacement, some growth
Some states changing policies
Increase from 30% to 40%
Increase from 40% to 60%
Major export program envisaged
Rapid rate of increase
Triple in 10 to 20 years, export program
Rapid but less sure rate of increase
Double in 20 to 30 years
May increase to 50%
Rest of the World
Source: Table compiled by the authors based on data from various public sources,
including the U.S. Energy Information Administration, the International Energy Agency,
the International Atomic Energy Agency, and the World Nuclear Association. This
table represents the pre-Fukushima no-surprise scenario. Changes to date have been
marginal, but more changes may be on the way.
The resulting nuclear picture is one of reawakening from the nearly dormant situation
of recent decades, with many new reactors and increased interest in different designs.
This should not, however, be confused with the vaunted “nuclear renaissance”
predicted by enthusiastic observers. Other sources of electric power generation
are slated to grow in tandem with the increase in nuclear (or in the case of renewables,
perhaps more quickly). While nuclear generation will increase, the share of total
electricity generated by nuclear is not likely, in the no-surprise scenario, to
change significantly. In particular, the spectacular growth of nuclear capacity
in China must be seen in the context of rapid overall development. Even if China
were to attain its mid-century nuclear energy goal, its total electric generating
capacity would also grow. As a result, nuclear will be a much larger fraction of
the total than the present 1 to 2 percent and coal would come down from roughly
75 percent to 50 percent of the total, which is approximately the present fraction
in the United States.
In order to construct an accurate picture of the world landscape, it is important
to understand how changes in one region affect others. How do trends catch on? How
do technological innovations spread, and how are they adapted for different purposes? What are the effects of policy changes
in one country for its neighbors and for the world as a whole? A piecewise approach
can emphasize regional trends, but it fails to capture the connections among countries
in a globalized world. In searching for game changers, we hope to examine how localized
events may propagate and the effects they may have on the global nuclear future.
Studying game-changing effects may lead to a positive feedback loop, in which analysis
of the event may lead to a more integrated picture of the no-surprise scenario,
which may in turn refine the assumptions creating that scenario.
http://www.huffingtonpost.com/2010/12/07/steven-chu-clean-energy-s_n_793382.html. See also the reports on the bipartisan Millennium Energy Summit
held December 7, 2010: for example, http://www.nucleartownhall.com/blog/tag/new-millenium-nuclear-energy-summit/.
The 12th Five-Year Plan guidelines were published in September 2010, and the plan
is slated to come into force in March 2011.