America's Missed Nuclear Energy Opportunity
Increasing global power demand—coupled with high natural gas prices in Asia and Europe for electricity generation, and the alarmist climate change narrative—make the right energy generation balance a national priority for developed and developing countries. France and Russia—the current market leaders in nuclear-power-plant construction—are taking full advantage of this market demand.
France is a global leader in nuclear power generation. The world’s largest nuclear power operator, EDF Energy, together with Areva, provide great competitive leverage. The extent of Areva’s involvement worldwide is unprecedented; the company has participated in construction and maintenance of 360 reactors out of the total 440 globally. High security and safety standards and highly educated experts are the hallmark of French projects, but the prices are higher than Russia’s. Most recently, EDF and Areva signed an agreement to build two reactors in the UK totaling $26-billion, the first in Europe since the disaster at Fukushima.
Russia’s state-owned Rosatom currently has contracts to build 19 nuclear reactors worldwide. In October, Rosatom and Atomstroyexport signed a contract to build a $10 billion nuclear power plant in Jordan.
Rosatom will also build and operate Turkey’s first nuclear facility—a massive four-reactor plant expected to cost $20 to $25 billion. It will serve as the pilot project for the company’s new “build-own-operate” model.
The success can be at least partially credited to the Kremlin’s political and financial support of its nuclear flagship. Moscow allocated $32 billion over a two-year period to finance Rosatom’s expansion. Access to this cheap, long-term financing gives the Russian nuclear behemoth an unfair advantage over competing firms.
A thriving nuclear industry, including a modern nuclear arsenal, is a part of Soviet/Russian industrial history and national strategy.
Furthermore, only Rosatom and France’s Areva are full-service providers, including construction, fuel, waste management, and decommissioning. Unfortunately, due to U.S. government policy failures, American companies do not compete globally in nuclear waste management.
Russia is highly recognized for its nuclear disaster expertise and for the safety of its technology. In 2011, Russia won twice as many bids to construct nuclear plants abroad as it did the previous year and aims to maintain a leading position in the international market.
Rosatom expects to sign contracts for up to 80 reactors in the coming years.
While Russian and French companies are enjoying the nuclear power spotlight, their American competitors are struggling to keep a place in the sun. Even though the U.S. is still the largest producer of nuclear power in the world, it’s only just coming off a more than thirty year hiatus to new reactor construction.
Economic reality, driven by the shale gas boom, overregulation, a paralytic spent-fuel management system, and negative publicity surrounding events such as Fukushima, Chernobyl, and Three Mile Island, makes the American nuclear revival an uphill battle.
Jack Spencer, director of The Heritage Foundation’s Roe Institute for Economic Policy Studies summarized the situation thusly:
Nuclear power has many advantages over other power sources, but a global expansion of peaceful nuclear technology could present risks if not managed properly. While acting to mitigate these risks, U.S. policy should, as in other sectors, include pro-market regulatory reforms, foster competition, and avoid unnecessary intervention.