Security of supply and climate change considerations have created a turning point in the fortunes of the nuclear industry. However, its expansion faces substantial constraints, most notably limited construction capacity. All the major cost components of newbuild are rising: fuel costs, raw materials, EPC contracts and interest rates. And behind all this is the question of the uranium resource.
Growth in energy demand and the perceived need to reduce carbon dioxide and other greenhouse gas emissions have together given a new lease of life to the nuclear industry. Russia, China and India have all announced large-scale programs for nuclear newbuild, driven by the desire to improve or maintain diversity, security of energy supply and, in China and India's case in particular, to help meet the massive growth in energy demand their dynamic economies are experiencing.
Nuclear stalwarts Japan and South Korea retain targets of producing 40% of their electricity from nuclear, while there are also strong signals that in some other OECD countries, where no nuclear plant has been built for decades, governments are willing to support a new generation of plant. Some countries are even considering nuclear for the first time. Only a few have taken the opposite route; Belgium, Sweden and Germany, for the moment at least, have rejected the possibility of newbuild, favoring instead the total phase out of nuclear generation.
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