Mid-Term Prospects for Nuclear Electricity Generation in China, India,
and the United States
Around the world, nuclear power plants are getting renewed attention and
consideration as an option for electricity generation to meet rising demand
in the future. For many years, analysts expected nuclear power to grow
slowly in the short term and decline in the long term. More recently, however,
many countries have begun looking anew at nuclear power to displace generation
from fossil fuels, in response to both sustained high prices for oil and
natural gas and the desire to reduce carbon dioxide emissions. In addition,
concerns about energy security among those nations that rely heavily on
fossil fuel imports have made nuclear power an attractive option for electricity
production.
Still, there are barriers to the nuclear power option, including public
concerns about plant safety, disposal of radioactive waste, and nuclear
weapons proliferation—not to mention the relatively high capital and maintenance
costs of nuclear plants. Even if safety, health, and political concerns
were answered sufficiently to allow new nuclear plants to be built, the
escalating expense of building them (particularly, in comparison with capital
costs for other plant types) could prevent them from being constructed.
The costs of commodities such as iron, steel, cement, and concrete, as
well as the capital costs of energy equipment and facilities, all have
increased substantially in the past few years; and because nuclear plants
tend to be more capital intensive than fossil fuel generators, these cost
increases tended to make nuclear power less competitive despite the recent
surge in fossil fuel prices.
In at least three countries—China, India, and the United States—nuclear
power currently is positioned for strong growth (see figure opposite):
- Although China has the youngest nuclear power program of the three nations
(its first nuclear power plant began operating in 1991), it is expected
to add a net 45 gigawatts of nuclear capacity by 2030. In the IEO2008 reference
case, China’s nuclear electricity generation increases from 50 billion
kilowatthours in 2005 to 410 billion kilowatthours in 2030, an average
annual growth rate of 8.8 percent.
- India is projected to add 17 gigawatts of new nuclear capacity and increase
production by 9.4 percent annually. Although India has not signed the international
Nuclear Non-Proliferation Treaty (NPT), it is expected to forge an agreement
with the United States and the International Atomic Energy Agency (IAEA)
that will allow it to import sufficient fuel and reactor parts to achieve
the projected increase.
- The United States is projected to add 16.6 gigawatts of new nuclear capacity
and 2.7 gigawatts of capacity in the form of uprates to existing plants.
Those increases are partially offset, however, by the anticipated retirement
of several older reactors.
China
China is trying to diversify its sources of electricity, and increasing
nuclear power capacity is seen as a strategy to achieve that goal. Unlike
most of the OECD nations, China will be able to expand its nuclear program
largely without political deterrents.
At present, China has 11 commercial nuclear power reactors in operation,
6 of which have been brought on line since 2002. Another 6 plants are currently
under construction, and several more are in various stages of planning.a The Chinese government is also in the process of awarding billions of dollars
in contracts to build additional nuclear plants. France’s AREVA, Russia’s
AtomStroyExport, and U.S.-based Westinghouse all have won bids. In the
world’s largest nuclear power deal to date, China will pay $11.9 billion
to AREVA to build two nuclear reactors.
China hopes to construct 30 new reactors by 2020, increasing its nuclear
portfolio from 2.3 percent of the country’s total electricity generation in 2008 to 6 percent in 2020. By
2050, it aims to have at least 150 gigawatts of installed nuclear capacity,
providing 22 percent of the country’s projected generation mix.b In the IEO2008 reference case, China’s installed nuclear capacity reaches 35 gigawatts
in 2020, 45 gigawatts in 2025, and 52 gigawatts in 2030, which would supply
5 percent of its total electricity generation in 2030.
India
India’s first nuclear power plant became operational in 1969. Since that
time, however, the growth in operating nuclear capacity has been slow and,
at best, uneven. In 2005 nuclear power accounted for just 2.4 percent of
India’s electricity generation, and its operating nuclear capacity totaled
only 2.8 gigawatts. Because India has refused to sign the NPT, it has been
barred from importing nuclear reactors and fuel from the 45-nation Nuclear
Suppliers Group (NSG).
In response to rapid growth in electricity demand, India is intent on increasing
its generation from nuclear power. The country’s Department of Atomic Energy
has a goal of increasing nuclear capacity to 20 gigawatts by 2020, more
than seven times the current installed nuclear capacity.c
To support such an expansion of its nuclear program, India began talks
with the United States in July 2005, in an effort to build favorable conditions
that will allow it to purchase nuclear reactor parts and fuel. On the part
of the United States, negotiations are aimed at persuading India to agree
to some nonproliferation measures that would enable it to import nuclear
materials without becoming a full signatory to the NPT. The negotiations
are suspended at present because of dissent among members of some of India’s
political parties, who do not trust the political, economic, and military
relationships being developed as part of the strategic partnership between
India and the United States. The talks are expected to resume in the near
future.d
The NSG is awaiting the conclusion of the U.S.-India negotiations, as well
as a safeguards agreement between India and the IAEA, before deciding whether
to grant India an exception to nuclear import restrictions. Several countries,
including France, Russia and Australia, are already discussing nuclear
cooperation and contract deals with India in the event that an exception
to the NSG guidelines is extended to India.
In the IEO2008 reference case, India’s nuclear power capacity grows rapidly,
by an average of 8.2 percent per year, to 14 gigawatts in 2020 and 20 gigawatts
in 2030. The projection still falls short, however, of the Indian Prime
Minister’s goal of achieving 20 gigawatts of operating nuclear generation
capacity by 2020.
United States
The United States has the world’s oldest commercial nuclear power program.
The first electric power generation from nuclear energy occurred on December
20, 1951, in Arco, Idaho; and the world’s first large-scale nuclear power
plant, a 60-megawatt pressurized-water reactor, began operation on December
2, 1957, in Shippingport, Pennsylvania. The U.S. program expanded quickly
in the 1960s and 1970s. Nuclear generation supplied 2.4 percent of U.S.
electricity in 1971, 11 percent in 1979, and 20 percent at its height in
1992, when 111 U.S. nuclear generators were in operation. Today, 103 nuclear
power plants supply nearly 800 billion kilowatthours of electricity in
the United States— just under 20 percent of total U.S. generation.
In the mid- to late 1970s, U.S. public opinion started to turn against
nuclear power. The rapidly escalating costs of building nuclear plants,
including the costs of added safety measures, throughout the 1970s and
1980s contributed to large increases in electricity prices. Aside from
the costs of building and maintaining nuclear plants, the potential dangers
of plant malfunctions and the storage of hazardous radioactive wastes were
major concerns. In 1978, an accident occurred at the Three Mile Island
nuclear plant in central Pennsylvania, when a loss of coolant from the
reactor core caused a partial meltdown and some release of radioactivity
into the immediate vicinity. No new construction of a nuclear plant has
been started since the Three Mile Island accident.
More recently, nuclear energy has increasingly come to be seen as a practical
way for the United States to meet rising energy demands while releasing
less carbon dioxide into the atmosphere and, simultaneously, increasing
energy security. The Energy Policy Act of 2005 (EPACT2005) contained several
provisions designed to encourage construction of new nuclear power plants,
including a production tax credit of 1.8 cents per kilowatthour for up to
6 gigawatts of new nuclear capacity brought on line before 2021. The credit
was authorized for the first 8 years of a plant’s operation and up to $125 million for each 1,000-megawatt unit. EPACT2005
also authorized Federal risk insurance for companies building the next
six nuclear power plants. In addition, EPACT2005 Title 17 included a provision
enabling the Government to guarantee loans for the construction of new
energy technologies “that reduce or avoid greenhouse gases,” including
nuclear power plants. The Secretary of Energy was given the authority,
upon choosing a project, to guarantee a loan of up to 80 percent of the
project’s cost. Such loan guarantees could decrease the costs of nuclear
power significantly, by reducing interest rates on the debt and allowing
higher debt-to-equity ratios.
By 2010, 23 entities are expected to have submitted combined license applications
for the construction of 34 new power plants in the United States.e It may,
however, take many more years to get plants built in the United States
than in either China or India, and any negative (or positive) experiences
in those countries could have impacts on U.S. public opinion that would
affect efforts to develop new nuclear plants.
In the IEO2008 reference case, 17 gigawatts of new nuclear capacity is
projected to come on line by 2030. The nuclear share of total U.S. electricity
generation remains below 20 percent throughout most of the forecast, however,
as older nuclear plants are retired and new generators of other types,
especially coal-fired, are built.
aInternational Atomic Energy Association, “Power Reactor Information System,”
web site www.iaea.org/programmes/a2/index. html; and “China’s Nuclear Power
Aspirations,” Energy Biz Insider (December 12, 2007).
b“China’s Nuclear Power Aspirations,” Energy Biz Insider (December 12,
2007).
cWorld Nuclear Association, "Nuclear Power in India," Information Paper
(July 2008), web site www.world-nuclear.org/info/inf53. html.
d“India’s Nuclear Hopes Hit the Buffers,” Power In Asia, No. 489 (October
25, 2007), pp. 8-9.
eU.S. Nuclear Regulatory Commission, “Expected New Nuclear Power Plant
Applications,” web site www.nrc.gov/reactors/ new-licensing/new-licensing-files/expected-new-rx-applications.pdf
(updated July 9, 2008).
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