In this issue, we highlight increased Russian cooperation with China, India, and Iran. We also focus on European approaches to the future development of nuclear energy, Japan’s policies in managing the 2011 Fukushima nuclear disaster, and China’s recent expansion of its civil nuclear capacity. Finally, we draw attention to various reports discussing the role of nuclear power in addressing carbon emissions and climate change.
Climate Concerns Open Opportunities on Nuclear Finance
Rising concerns about a warming planet are sustaining support for the financing of nuclear power projects, despite cost concerns about building large plants in economically developed nations. The European Union, United States, and Canada have all recently taken steps to preserve space on the zero-carbon agenda for existing and next generation reactors. The ability of these key countries to effectively compete with the state-backed financing of Russia and China for nuclear exports is critical for supporting geopolitical goals and global security.

In a somewhat contentious decision , the European Investment Bank’s (EIB) board of directors agreed to cease funding for fossil fuel projects by the end of 2021. Taking aim at coal, oil, and natural gas, the EIB’s energy funds now will be directed at “clean energy innovation, energy efficiency, and renewables.” EIB’s board agreed to include funding for new nuclear power projects in Europe as part of the suite of clean energy technologies. This reinforced a decision that it made years earlier . But the bank indicated that it would take a “ cautious approach ” to these projects.

Still, the EIB decision is significant and could set a precedent for other national export credit agencies and international finance banks.

One impact could be on the future lending mandate of the new U.S. International Development Finance Corporation (DFC). It is the successor to the Overseas Private Investment Corporation (OPIC). Six U.S. Senators recently wrote to the head of DFC asking that the new agency not replicate OPIC’s “categorical prohibition” against supporting civil nuclear energy projects. To underscore their concern the Senators noted that, “Russia and China are increasingly using nuclear reactors as a tool for geopolitical purposes” and noted the importance of American “technologies and safeguards.” U.S. military, policy and business leaders also urged Congress to support the long-term reauthorization of the Export-Import Bank as part of a strategy to counter the geopolitical influence of Russia and China, noting the vital importance of exerting U.S. influence on global nuclear safety, security, and non-proliferation.

In a highly divided U.S. political landscape, the future of nuclear power and its financing has been one notable area of bipartisan agreement. Two important pieces of legislation have already been signed into law that support the development of next generation reactors. Other legislation that would move the process further, faster is still pending but supported by both sides of the aisle. Developing advanced nuclear reactors is a priority in the U.S. energy department budget.

In the meantime, Canada is forging ahead with the implementation of its SMR roadmap which is designed to make Canada a hub of small modular reactor research. Canadian Nuclear Laboratories (CNL) recently announced that it has selected four recipients of the Canadian Nuclear Research Initiative (CNRI). This initiative allows CNL to co-fund research and development on the selected technologies. The CNRI is in addition to CNL’s process of preparing for small modular and advanced reactor demonstrations at one of its sites.

The continued global increase of greenhouse gasses has also provoked the U.S. Federal Reserve into considering the impact of climate change on its mission to ensure stability in the U.S. economy. The Federal Reserve Bank of San Francisco hosted a first-ever conference on the need for climate related research under its mandate. Speakers at the conference noted the impact of severe weather events on bank stability, power production, and economic growth.

In considering this new research, the Fed is already well behind some of its global counterparts. The Bank of England is stress testing its financial system against different climate scenarios. The European Central Bank is considering using environmental stability as a criterion for bond purchases. There also is already a Central Banks and Supervisors Network for Greening the Financial System. Global Green Bonds, which raise capital for projects with environmental benefits, have already exceeded $100 billion. However, none of those bonds have yet been used for nuclear projects. This is consistent with World Bank policy not to fund nuclear projects despite its objective of providing complete global access to electricity by 2030.

Export credit agency and World Bank prohibitions on nuclear project financing may historically have been easy to defend as the technology is undeniably controversial. But climate and geopolitical realities are beginning to overtake past rationales. The potential climate-induced destabilization of national economies and the global economy is a risk that central banks have embraced as a significant danger. Key countries including the U.S. and Canada, and the EU are defining nuclear power as part of a green response to the global zero-carbon objective. The government-financed nuclear industries of Russia and China are rapidly expanding their reach into all developing regions and nations, undercutting democratic country influence. 

In the current international environment, placing the entire burden of nuclear financing on the private sector is a prescription for failure for the individual projects and for achieving global climate and security objectives. There must be government support paired with private sector funding if these technologies are, along with renewable energy, going to form the core of the green energy future. Some governments seem to finally be waking up to this reality.

Ken Luongo, Partnership for Global Security

“Nuclear innovation is essential in the 21st century, a period of powerful technological evolution and intensifying global competition. The challenges posed by climate change and to global nuclear security must be addressed in a strong and effective manner. Advanced reactors are an important response to both of these critical issues.”
Nuclear Collaboration
Rosatom subsidiary TVEL Fuel Company has signed a contract with subsidiaries of China National Nuclear Corporation (CNNC) to provide a nuclear fuel supply for future power units at China’s Xudapu nuclear power plant (NPP).

Rosatom is interested in partnering with India in producing small- and medium-sized reactors. Rosatom is also interested in jointly developing a floating NPP with India.

As African nations seek to reduce their dependence on hydroelectric power, India has been active in promoting nuclear energy as an alternative. Eager to act as an alternative to China’s Belt and Road Initiative, India has encouraged African countries to adopt its nuclear reactor models, which it views as complementary to the needs of these nations. 

Iran and Russia have begun work building a second reactor at Iran’s Bushehr NPP. Russia will provide Iran with the fuel to power these nuclear reactors.

Germany and Brazil have agreed to renew their nuclear cooperation agreement in which Germany would assist Brazil in building NPPs. This, however, has faced criticism and scrutiny from the German Green Party, who wish to cancel the agreement and make Germany as a model for the global phase out of nuclear energy.
Nuclear Policy, Governance, and Geopolitics
The U.K. government has provided £18 million to a Rolls-Royce-led consortium to design mini nuclear power stations. This initiative is expected to contribute to the government’s pledge for the U.K. to be carbon emissions neutral by 2050, while also boosting the economy.  

At the New Nuclear Watch Institute’s first annual forum, nuclear experts discussed the state of nuclear energy use and development in Europe. The consensus was that current nuclear energy capacity building is failing to keep apace with nation- and EU-wide targets.

The European Investment Bank (EIB), in a move to reduce greenhouse gases, will eliminate future financing for fossil fuel energy projects but will consider lending for nuclear energy projects in Europe if they are technically, environmentally, financially, and economically justified. Among the various eligible projects are power generation, full fuel cycle, waste management, safety upgrades, lifetime extensions, and research and development.

Canada is moving aggressively to establish its role as a hub for next generation reactor research and development. It has chosen Kairos Power, Moltex Canada, Terrestrial Energy Inc., and UltraSafe Nuclear Corporation to collaborate with Canadian Nuclear Laboratories (CNL) on small modular reactor (SMR) research and technology.

France’s EDF has cut its nuclear power generation target--the second time this year--by just over 4 percent due to a temporary suspension of power at the country’s Cruas NPP after an earthquake. EDF has reported no structural damage at the plant and will continue to be monitored. 

EDF wants to optimize its European Pressurized Reactor (EPR) to be cost-competitive with gas-fired power stations. EDF’s CEO, Jean-Bernard Levy, suggests that nuclear energy is a superior form of renewable energy than solar or wind, due to its availability and carbon emissions-free output.

The Czech Republic plans to build a new nuclear unit at its Dukovany plant by 2036. The country’s prime minister, Andrej Babis, has viewed France as a model for reducing carbon emissions and wants to increase the share of nuclear power in the country’s energy mix.

In a bid to join the Organization for Economic Co-operation and Development (OECD), Brazil is considering to join one of the organization’s specialized agencies, the Nuclear Energy Agency. Being a member of this agency will allow Brazil to participate in the sharing of nuclear technology.

Japan plans to convert abandoned areas around the Fukushima NPP site into a renewable energy hub, with solar plants and wind farms. This project is expected to be completed by March 2024 and will cost $2.7 billion.

Japan’s Ministry of Economy, Trade, and Industry (METI) has said that it is safe to dump the radioactive water from the 2011 Fukushima nuclear disaster into the ocean. Despite concerns of the potential environmental impact and damage to the local fishing industry, ministry officials cite estimates of minimal exposure to radiation in an attempt to mitigate public concern.

China has begun operations of its first commercial nuclear heating project at its Haiyang NPP. This project is expected to provide heating for all of Haiyang city by 2021. China is just the latest country to adopt commercial nuclear heating, after Russia, Romania, Switzerland, and Sweden, among others. 

China has begun building two new nuclear reactor units on the island of Hainan. Set to be operational in 2025 and 2026, they are just two of 15 nuclear reactor units under construction. This news comes as recent estimates show that nuclear growth in the country has slowed.

Saudi Arabia is set to complete the construction of its first nuclear reactor, a development that has the U.S. Congress concerned. They fear that the crossing of the nuclear threshold and the Saudi desire for additional large power reactors may lead to the development of nuclear weapons.

U.S. Secretary of State Mike Pompeo has announced that the U.S. will cancel one of four sanctions waivers concerning Iran’s Fordow uranium enrichment facility, which allowed Russian, Chinese, and European companies to work there. Meanwhile, some Congressional lawmakers have called for the end of all sanctions waivers, saying that outside assistance gives Iran the technology that could be used to develop nuclear weapons.

With the successful completion of the IAEA’s Integrated Nuclear Infrastructure Review (INIR), Egypt can now move forward in the construction phase of its first NPP. This planned NPP will be built by Rosatom.

The UAE’s Sheikh Mohammed bin Zayed has celebrated the work of a group of newly certified Emirati engineers who will operate the country’s first NPP at Barakah. The plant is expected to begin operations in early 2020.
Domestic Civil Nuclear Developments
Senate Energy and Natural Resources Chairman Lisa Murkowski (R-Alaska) and five other Senators have petitioned the U.S. International Development Finance Corp. to end a ban on nuclear energy financing abroad. The lawmakers assert that this policy change will enhance the U.S.’ position as an attractive partner for countries seeking financial assistance for large-scale energy projects.

The U.S. Department of Energy (DOE) will provide the Advanced Research Projects Agency-Energy (ARPA-E) with up to $30 million in funding to establish a new program on developing fusion energy.  

A bipartisan group of U.S. representatives has called into question a recent contract between the DOE and Centrus Energy Corporation to produce high-assay low-enriched uranium (HALEU). As Centrus president and CEO, Dan Poneman, previously served as a deputy at the DOE, Lawmakers state that the DOE has not “presented adequate justification” for this no-bid contract.

The Nuclear Regulatory Commission (NRC) is deciding whether to create a “generic environmental impact statement,” that would help streamline the environmental review process for advanced nuclear reactor designs. Instead of reviewing and analyzing all of the environmental effects of each reactor design application, the proposed plan would allow regulators to assess such effects on all designs.
Nuclear Security and Emerging Technologies 
The IAEA has carried out a training course focused on preparing for and protecting against cyberattacks on nuclear facilities. The International Training Course (ITC) was composed of a mock scenario in which participants acted as members of an NPP’s national computer security incident response team. This exercise comes on the heels of a recent North Korean cyberattack on an Indian NPP.

Battelle Energy Alliance, the contractor that operates the Idaho National Laboratory, is seeking private partners to construct the Versatile Test Reactor (VTR). The VTR will create “the conditions necessary to see how fuels, materials, and sensors endure when battered with radiation in the form of fast neutrons.” If the DOE moves forward with this plan, construction could begin in 2022.   
Noteworthy Research
A new IAEA report outlines the challenges facing the world’s energy sector in the decades to come. In Adapting the Energy Sector to Climate Change, the nuclear watchdog lists the tasks of transforming the world’s energy supply system into a low-carbon one and ensuring a secure and reliable energy supply.

S&P Global Ratings has argued that nuclear power should remain a part of the global energy mix, given that it is carbon emissions-free, reliable, and promotes grid stability, but does not see a substantial growth trend. These arguments are laid out in two reports: “The Energy Transition: Nuclear Dead and Alive” and “The Energy Transition: Different Nuclear Energy Policies, Diverging Global Credit Trends”.

In the new edition of the International Energy Agency’s (IEA) World Energy Outlook 2019, the agency discusses the current state of global energy production and expectations for decades to come. In terms of nuclear, the agency predicts that the share of nuclear energy will decrease, but in absolute numbers will increase, due to expanded production in developing countries.

The Center for Climate and Energy Solutions has published a report on how the U.S. can achieve net-zero emissions by 2050. It expresses concern at the trend in the U.S. of closing NPPs and argues for the importance of investment in small and advanced nuclear reactors.

In U.S.-ROK Cooperation on Nuclear Energy to Address Climate Change, the Nuclear Innovation Alliance assesses the future role of nuclear power in making both countries’ energy mix carbon emissions-free. With each countries’ nuclear reactors nearing the end of their lifespan and few measures being taken to replace them, it is critical that the United States and South Korea increase their cooperation to address this predicament.
The Nuclear Conversation
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