Global Energy Crisis Spurs a Revival of Nuclear Power in Asia

(Bloomberg) -- Asia is giving the once-shunned nuclear power industry a second lease on life, thanks to the global energy crisis.

Governments in Japan and South Korea are removing anti-nuclear policies, while China and India are looking to build more reactors to avoid future supply shortages and curb emissions. Even developing nations across Southeast Asia are exploring atomic technology.

The embracing of nuclear energy comes after the prices of natural gas and coal, the two fossil fuels used to generate most of Asia’s power, shot to records this year as Russia’s invasion of Ukraine upended markets. As the world shifts away from Russia, a major fuel exporter, supply will remain tight and prices high well into the future. 

That’s making clean and reliable nuclear power very attractive for policymakers and utilities eager to rein in inflation, achieve green goals and curb dependence on overseas energy suppliers.

“Old resistances are crumbling surprisingly fast,” said David Hess, a policy analyst at the World Nuclear Association. “Existing nuclear plants produce some of the cheapest electricity. The skyrocketing natural gas price has made these obvious economic advantages all the more obvious.”

It’s a dramatic turnaround for the nuclear industry, which spent the last few decades beset by cost overruns, competition from cheaper fossil fuels and stricter regulations. Delays to major nuclear projects resulted in the bankruptcy of industry pioneer Westinghouse Electric.

While the nuclear power comeback is global, gaining proponents from the UK to Egypt, the shift is perhaps most surprising in Asia, considering it had the closest view of the catastrophe that struck Japan more than a decade ago. 

The future of nuclear was still looking bright until March 2011, when a massive tsunami hit the Fukushima Dai-Ichi plant in Japan, resulting in the worst meltdown in decades. The incident convinced some governments that nuclear power’s risks far outweighed its benefits, with Germany and Taiwan deciding to set deadlines to close down their fleets of plants. Mammoth costs of building new facilities, and frequent delays, also served as deterrents. 

Now, as power bills surge and nations deal with fossil fuel-induced inflation, governments are again looking to nuclear. It requires little uranium to operate, which is currently abundant, and it produces power around the clock, unlike intermittent renewable energy projects such as wind and solar. 

Also boosting the industry are advances in producing smaller and cheaper nuclear technology, including small modular reactors -- or SMRs -- which may become attractive alternatives as tools to tackle climate change. 

“Fear-based objections that grew from Fukushima have faded, as the extent of that accident was tempered by a decade of scientific research, and Asian countries face more acute – and deadly – threats from energy shortages,” said Brandon Munro, chief executive officer of Bannerman Energy Ltd., an Australian-listed uranium development company.

That explains why Japan, which depends on imported fuel to produce most of its electricity, said this week that it will explore development and construction of next-generation reactors, while also pushing for the restart of more idled nuclear reactors. It’s a complete turnaround for Japan, which for the last decade said it wouldn’t build new units or replace old one. 

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“Russia’s invasion changed the global energy situation,” Prime Minister Fumio Kishida said on Wednesday.  “Nuclear power and renewables are essential to proceed with a green transformation.”

Japan’s public is even warming up to nuclear. Some 58% of residents favored restarting nuclear power in a Yomiuri poll conducted earlier this month, representing the first time support has outweighed opposition since the newspaper began the survey in 2017.

A similar shift is taking place in South Korea. Voters this year elected a pro-nuclear president who wants atomic energy to account for 30% of total energy generation, reversing the previous government’s plan to ditch reactors. He also vowed to make the nation a major exporter of nuclear equipment and technology, and integrate atomic power and renewable energy to push for carbon neutrality.

China, which is currently grappling with a historic heat wave that’s resulted in power shortages in parts of the country, said this week that it will accelerate nuclear power and hydro projects.

The nation is in the midst of the largest build-out of reactors in the nuclear industry’s history to meet its insatiable energy demand, while also curbing dependence on dirty coal-fired power plants. China currently has nearly 24 gigawatts worth of nuclear power capacity under construction, and another 34 gigawatts planned, according to WNA data. If all of that comes to fruition, China will become the world’s top nuclear power producer.

Prime Minister Narendra Modi’s expansion into atomic energy is also gaining momentum as India’s largest power producer looks to develop two massive nuclear power projects. The country currently generates about 70% of its electricity using coal and around 3% from nuclear, but Modi is aiming to more than triple its nuclear fleet over the next decade.

Even cash-strapped nations across Southeast Asia are looking at nuclear power. Philippine President Ferdinand Marcos Jr. told Congress last month that he will explore nuclear plants to bring down power costs and boost energy sufficiency. Indonesia plans to start its first nuclear plant in 2045, part of an ambitious goal to reach net-zero emissions by 2060.

The island state of Singapore said earlier this year that next-generation nuclear or geothermal technology could make up 10% of its energy mix by 2050. While the details are hazy, that’s a shift from a decade ago when the country concluded that conventional reactors weren’t suitable.

Not all governments in Asia are convinced. Taiwan hasn’t changed its position to phase out nuclear power. It plans to shut its reactors at the end of their 40-year lifetimes through 2025, the Ministry of Economic Affairs said earlier this week, according to the Taipei Times.

And Europe has shown that even having an enormous fleet of reactors doesn’t always ensure power supply. France, one of the world’s top nuclear power producers, is grappling with record-high electricity prices due in part to a litany of reactor outages.

Meanwhile, next-generation projects such as SMRs are still years or even decades away, and don’t present an immediate fix to the current energy crunch. But governments and companies are moving to endorse the technology now to avoid the crises of tomorrow.

South Korean conglomerate SK Group said this month it will invest $250 million in Bill Gates-backed TerraPower LLC. In March, the Japan Bank for International Cooperation invested $110 million in Nuscale Power, which is developing SMRs.

“Each country faces its own individual challenges in implementing its nuclear program,” said WNA’s Hess. “But recent events have seen these obstacles disappear or shrink considerably.”

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