Nuclear Power: February 2009 Archives

Nuclear power has been poised for a huge rebirth due to worldwide concern about climate change and global warming. However, the global recession is making it very difficult for companies and governments to justify construction costs for new nuclear facilities. Recently, upfront costs for nuclear projects have quickly increased due to rising steel costs and lack of technological expertise.

France’s Areva has acknowledged industry changes, noting that the nuclear sector used to be a suppliers’ market, but the worldwide recession has changed it to a buyers’ market.

An example of the recession’s effects can be found in the December 2008 decision by South Africa to cancel its plans to construct a second nuclear reactor. Deeming the project no longer affordable, the country is expected to fill its energy needs through coal.

It is not only the costs of construction that are a deterrent for building new nuclear facilities. France’s EDF has announced the cost of power produced by their new reactor in Flamanville will be 20% higher than initially expected. Power generated by this reactor, which is expected to begin operations in 2013, will cost approximately 55 euros per megawatt hour instead of the initial 46 euro estimate.

Don’t be surprised if, by the time the recession ends, nuclear power is not the same cost-effective option it used to be. These higher costs may make people reconsider adding nuclear capacity more than the potential dangers posed by the technology.