Japan’s Nuclear Export Struggles Narrow the Field of Suppliers

Japan is struggling to find viable foreign buyers for its
reactor technology in an expensive and competitive global nuclear
market.

Only half a dozen nations currently have credible nuclear export
capabilities. And besides Japan, the true export potential of at
least two — the U.S. and France — is in doubt.

A recent report in the Japanese daily Mainichi
Shimbun
said a government strategy to export nuclear power
technology had “run aground amid rising safety costs and
deteriorating prospects for project profitability.”

Proposed projects in Turkey and the United Kingdom had both hit
roadblocks, the Mainichi Shimbun noted. The report cited an expert
who predicted Japan might have to import Chinese-made reactors
within a couple of decades.

Press coverage of the issue last month prompted Mitsubishi Heavy
Industries (MHI), one of three conglomerates with nuclear export
hopes in Japan, to say it was still pursuing a reactor deal in
Turkey.

“The feasibility study report is currently under evaluation by
the Turkish government and the Ministry of Energy and Natural
Resources, and MHI will continue to support this effort,” said
the company in a press
note

But Edward Kee, principal consultant at the Nuclear Economics
Consulting Group, said other potential buyers, such as the United
Arab Emirates, are shunning Japan’s boiling water reactor (BWR)
technology in favor of pressurized water reactor (PWR)
designs. 

“The market seems to prefer PWR designs, so the Japanese BWR
designs seem to be at a disadvantage,” Kee told GTM. “The UAE
was the most recent large nuclear build and had a preference for
PWR designs.”

Similarly, recent nuclear procurement programs in Saudi Arabia
and South Africa have been restricted to PWRs, he said.

Japan’s nuclear setback

Besides touting an unpopular technology, Japanese nuclear
vendors face two other hurdles in selling their expertise abroad.
One is that new reactor construction stopped in Japan after the
Fukushima Daiichi nuclear disaster in 2011, so developers’
new-build credentials are starting to look a little dusty.

Japan’s experience in building early Advanced BWR projects,
such as Hamaoka 5 and Kashiwazaki Kariwa units 6 and 7, “is now
decades old,” said Kee.

Also, and perhaps more importantly, Japanese nuclear vendors are
not state-owned like developers from China, Russia and South Korea.
That puts Japanese firms at a disadvantage in terms of accessing
finance and accepting risk.

These problems are not restricted to Japanese firms, though.
They also apply to U.S. vendors.

Struggles in the U.S. nuke sector

While Japanese nuclear is at least enjoying something of a
gradual recovery at home, with nine reactors back online after
Fukushima and a further 17 looking to restart, in the U.S. the
domestic sector is a mess. 

This month saw Dominion Energy
absorbing Scana
Corporation after the latter failed to keep
construction of two reactors at the Virgil C. Summer Nuclear
Generating Station afloat.

A little over 100 miles away, Georgia state lawmakers
have expressed concerns
that a couple of new reactors at the
Alvin W. Vogtle Electric Generating Plant, which are already half a
decade behind schedule, could see further delays.

Six reactors out of a total of 104 have shut down across the
U.S. since 2012,
according to
the Center for Climate and Energy Solutions, and a
further 13 are due to close before 2025.

Meanwhile, a 2017 study
by the Massachusetts Institute of Technology found two-thirds of
U.S. nuclear power capacity could become unprofitable over the next
few years.

When publicly owned U.S. nuclear developers do not even have a
viable domestic market to play in, it is hard to see how they might
compete overseas. There are efforts underway to revive the U.S.
nuclear industry
, but industry advocates say much
more support
is needed.  

U.S. nuclear export prospects are thus beginning to look a lot
like those in Japan — and also those in France, which
has been struggling to launch
 its Evolutionary Power Reactor
technology. Like the U.S. and Japan, France seemingly has little
appetite to attach state guarantees to nuclear projects abroad.

Given enduring concerns over reactor costs and delays,
increasingly only state-held entities from China, Russia and South
Korea are in a position to jostle for foreign reactor contracts.
And surprising though it may seem to U.S. observers, there is
plenty to jostle for.

Despite the precarious state of the American market, 10
gigawatts of new nuclear build came online worldwide in 2018, said
Dr. Jonathan Cobb, senior communication officer at the World
Nuclear Association. 

“And around 15 gigawatts [are] expected in 2019, which is the
highest level seen since the 1980s,” he said. “As the world
seeks to shift away from fossil fuels, this growth in nuclear new
build should continue, so governments should support their
industries if they want to benefit.”

Source: FS – GreenTech Media
Japan’s Nuclear Export Struggles Narrow the Field of Suppliers