HomeMagazine ArticleThe Big Question: nuclear energy build programme

The Big Question: nuclear energy build programme

Energy security concerns and carbon emission constraints on fossil fuel have put nuclear power back on the agenda for projected new capacity in many countries. The World Nuclear Association states that at the end of 2017, 57 power reactors were under construction around the world.

However, considering the high cost of constructing and developing a nuclear power plant – the big question we pose to industry experts is:

What does it take for a country to plan and implement a nuclear energy build programme?

This article first appeared in ESI-Africa Edition 2, 2018. You can read the full digital magazine here or subscribe here to receive a print copy.

Jonathan Cobb, Senior Communication Manager, World Nuclear Association, UK

For companies in the host country to benefit from new build projects they need to have the required capabilities and a legal framework in place. The International Atomic Energy Agency (IAEA) can help countries establish regulatory infrastructure. An effective regulator will be needed to ensure the plant is built and operated in accordance with regulations.

Supply chain companies need to be able to produce components to the high standards required by nuclear projects.

Projects will also include requirements for components from the conventional supply chain. Training will be needed to develop people with the right skills to be nuclear plant operators.

Some of these tasks will need to be completed prior to the typically six years of construction required for a new plant. However some countries looking to use nuclear power technology will already have operational nuclear research reactors. These reactors, used for research, training and in some cases medical uses, are much smaller than reactors used for electricity generation. Nevertheless their operation requires a similar focus on safety culture and regulation to that needed for a nuclear power plant.

Countries seeking to use nuclear energy today can also take advantage of being able to work in partnership with nuclear vendors that have decades of operating experience. For example, such partnerships offer the opportunity for training and developing skills at the vendor company’s operating power plants.

Countries starting nuclear power projects can also draw on a global supply chain. But while the first in a series of new nuclear plants may use a high proportion of imported components, supply chain companies can gain experience allowing for subsequent plants to have a much higher share of domestic content. In some countries with new nuclear programmes, joint ventures have been agreed with experienced foreign suppliers.

Planning and implementing a nuclear energy build programme requires a firm long-term commitment investment in people, in the environment, in companies and in communities that will offer long-term benefits.

Daniel Njoroge Butti, Energy Economist Lecturer, Karatina University, Kenya

On the financial aspects, in most developing economies nuclear power plant endeavours are, and will occupy, a significant proportion of their budget. Therefore this will bring about budget constraint challenges.

Nuclear projects are characterised by uncertainties in design, time, and cost overruns, changes in regulatory approaches and public opinion as well as support. The primary difficulty in financing a nuclear power project is its high capital requirement. Depending on factors that include plant size, construction time, financing terms, and interest rates, the initial investment cost of a nuclear power plant of unit size 600MW would be $2.91 billion and 1,000MW would be $4.05 billion or even higher for projects that encounter delays during construction.

Construction periods for nuclear power plants range from 4 to 15 years. Longer construction periods result from a variety of non-technical problems (licensing, regulatory or political issues). A good average plan of the construction period for a power plant would be approximately eight years. Delays in bringing the plant on-line will have major implications for its economic feasibility. Every effort should be made in advance not to exceed the planned construction period. Unpredictable additional costs due to escalation may also be a problem, particularly when supplies come from countries with high inflation rates, or if there is a substantial part of local supply or services in countries with high rates of inflation.

Generally, lenders consider financing nuclear power projects a highly complex and risky undertaking. The characteristics listed above will be important in determining an appropriate financing model and in obtaining finance for nuclear power projects. Various financing models have been applied in the implementation of nuclear power projects around the world. Conventional models for financing nuclear power projects include equity financing, debt financing, government financing, corporate financing, and project financing.

Dr Derik Wolvaardt, Nuclear Engineering Specialist, Lesedi Nuclear Services, South Africa

Extensive studies have been performed to identify and detail the steps required for a country wishing to embark on a nuclear programme. Some excellent documents that set out the process have been produced by institutions like the International Atomic Energy Agency (IAEA).

Various vendors have done extensive assessments on potential client countries, such as was done by Areva and Westinghouse in South Africa during the Nuclear 1 process.

The IAEA even has a process for reviewing the readiness of countries for embarking on nuclear programmes.

I will briefly summarise the main components below, but I argue that there is more to it than what is identified in the existing documents.

The first step is always the establishment of a governmental policy and a legal framework in the country for the governance of a nuclear programme. This includes local laws for the establishment of a licensing authority as well as international legal agreements.

Extensive physical facilities are required, such as a nuclear power station site and sites for nuclear waste disposal. The country also needs a knowledge and human resource base for the operation of the licensing authority, the financing, contracting, construction and operation of the nuclear power stations. This in turn will require academic programmes at universities and technical institutions.

However, in-spite of all this, a nuclear programme can still fail to progress beyond a single power station. What is really required is a national will to use the nuclear programme to uplift the nation. This starts from nuclear education and training, enforcing technology transfer, establishing manufacturing facilities, and leveraging of the technological advances brought to the country by nuclear onto other industries.

A country that has achieved exactly that is South Korea. Like South Africa, South Korea took its first nuclear steps in the 1960s with the construction of a research reactor. At this time, South Korea was a third world country with much of its population living in poverty. When they launched their commercial nuclear power programme, the policy was to use the programme to uplift the Korean society on all levels.

By the time the first commercial power station started in 1978, this process was well advanced. Today, South Korea is an exporter of nuclear power stations as well as a host of other advanced technological products.

Des Muller, Supply Chain Development Subcommittee, NIASA, South Africa

On the development side, for newcomers to the nuclear industry, the International Atomic Energy Agency (IAEA) provides a detailed Integrated Nuclear Infrastructure Review, which is a 19-point assessment on the country’s readiness to build, own and operate nuclear assets. The IAEA also develops a staged approach toward getting a new country ready to embark on a nuclear programme under its supervision.

Should a country wish to participate in a nuclear build programme, its engineering, manufacturing and construction industries will need to scale up their quality and safety standards to meet international nuclear industry requirements. This will help raise industrial excellence, displace imports and create an export industry. ESI

This article first appeared in ESI-Africa Edition 2, 2018. You can read the full digital magazine here or subscribe here to receive a print copy.