Nu­clear gen­er­a­tion ex­pands in Asia; slows in US and Europe

Financial Mirror (Cyprus) - - FRONT PAGE -

China and South Korea have the most sup­port­ive poli­cies on nu­clear en­ergy, with sig­nif­i­cant new nu­clear con­struc­tion pro­grams un­der way in both coun­tries, ac­cord­ing to a Moody’s survey.

In ad­di­tion, Ja­pan has been sup­port­ive of restart­ing some of the coun­try’s nu­clear re­ac­tors, de­spite pub­lic op­po­si­tion since the 2011 Fukushima nu­clear ac­ci­dent.

“De­spite gov­ern­ment support for nu­clear gen­er­a­tion in most ma­jor economies, low prices for nat­u­ral gas have put nu­clear power in a less com­pet­i­tive po­si­tion,” said Pa­trick Mis­pagel from Moody’s In­vestor Ser­vice.

“As a re­sult, nu­clear gen­er­a­tion is grow­ing only in a few ma­jor mar­kets, most no­tably China and South Korea,” added Mis­pagel.

The rat­ing agency’s lat­est re­port ex­am­ines the prospects for nu­clear gen­er­a­tion in China, South Korea, Ja­pan, the US, the UK, France and Ger­many, and the ef­fect nu­clear gen­er­a­tion has on the credit qual­ity of the util­i­ties op­er­at­ing within them.

The Moody’s re­port notes that while most of th­ese coun­tries support nu­clear en­ergy, Ger­many is tak­ing an ag­gres­sive stance against nu­clear power with the grad­ual phase-out of its re­ac­tors.

In ad­di­tion, low nat­u­ral gas prices in the US and the push to­ward re­new­able en­ergy in Europe are slow­ing down nu­clear ex­pan­sion in th­ese re­gions.

Only in some of the ma­jor Asian coun­tries, such as China and South Korea, where nat­u­ral-gas prices are rel­a­tively high, is new nu­clear gen­er­a­tion be­ing pur­sued to a sig­nif­i­cant de­gree against a back­drop of strong de­mand for elec­tric­ity.

China Gen­eral Nu­clear Power Cor­po­ra­tion and China Na­tional Nu­clear Cor­po­ra­tion are build­ing a num­ber of new nu­clear units that will dra­mat­i­cally in­crease the coun­try’s nu­clear gen­er­a­tion out­put, which to­day stands at about 2% of China’s to­tal en­ergy mix. Mean­while, South Korea has tar­geted a more mod­est in­crease in nu­clear gen­er­a­tion. The gov­ern­ment’s con­tin­ued support of nu­clear power is no­table given the dis­cov­ery of sub­stan­dard parts at sev­eral of Korea Hy­dro and Nu­clear Power Company’s nu­clear re­ac­tors in 2013.

How­ever, the Korean gov­ern­ment re­sponded to the dis­cov­ery by in­sti­tut­ing in­creased over­sight of the re­ac­tors, rather than by low­er­ing its over­all support for nu­clear power.

In Ja­pan, the shut­down of all nu­clear re­ac­tors fol­low­ing the Fukushima ac­ci­dent in 2011 has led to the most dra­matic drop in nu­clear gen­er­a­tion out­put. Out­put fell from 29% of to­tal power gen­er­a­tion in 2010 to just un­der 2% in 2013 and to zero now, with all nu­clear re­ac­tors cur­rently out of ser­vice.

As a re­sult, the coun­try’s util­i­ties have higher fuel costs, given their in­creased re­liance on nat­u­ral gas, oil and coal to gen­er­ate elec­tric­ity, lead­ing to sub­stan­tial op­er­at­ing losses.

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