Sixteen months after the nuclear disaster in Japan, electricity generation from nuclear power worldwide has reached record levels, with a reactor construction boom likely to push those levels steadily higher.
"Fukushima has delayed nuclear development by three or four years," as countries re-evaluate safety around nuclear power, says Luis Echávarri, the director general of the Nuclear Energy Agency (NEA). "But construction continues."
In the immediate aftermath of the March 11, 2011 earthquake and tsunami that led to meltdowns at the Fukushima Dai-ichi plant, the total global operating capacity for nuclear-generated power dipped from about 372 gigawatts of electricity (GWe) — equivalent to about 14 per cent of the world’s electricity — to roughly 304 GWe, largely due to Japan and Germany switching off their nuclear plants.
However, a year after the meltdown, the amount of electricity generated from nuclear plants worldwide had risen again and is at an all time high, according to Echávarri.
The nuclear accident at Fukushima was preventable and manmade, according to a report released Thursday by a Japanese parliamentary panel tasked with drawing conclusions from the disaster.
Fukushima "could and should have been foreseen and prevented," says Commission chairman Kiyosi Kurokawa, a medical doctor and former head of the Science Council of Japan, in the forward of the report.
The 88-page document, penned by the Fukushima Nuclear Accident Independent Investigation Commission, points a damning finger at Tepco, the company that runs the Fukushima plant, the Japanese government as well as a sense of 'reflexive obedience' ingrained in Japanese culture, for not doing more to prevent the reactor meltdowns.
The World Nuclear Association estimates that at least 73 GWe in net new capacity will be added by 2020.
The same can be said for nuclear plant construction. According to the NEA, a branch of the Organization for Economic Cooperation and Development, there are more nuclear reactors under construction now than before the Fukushima meltdown and hundreds more are planned to go into operation in the years to come.
Japan itself shut down all 50 of its active reactors for inspection after the Fukushima meltdowns, but is embracing nuclear power again.
The government report by the Fukushima Nuclear Accident Independent Investigation Commission that determined that the meltdowns were a result of human error was released just days after reactor No. 3 at the Ohi nuclear plant came back online July 1. A second reactor at Ohi was restarted hours before the report was released.
Japan's restart of its reactors is prompting widespread protest in a country not known for its public criticism of government decisions, but the country had relied on nuclear for about a third of its electricity needs before the disaster and has no immediate alternatives.
The nuclear landscape
The story is similar in other countries.
'Fukushima does not throw into question the need for nuclear power.'—Luis Echávarri, Nuclear Energy Agency
The World Nuclear Association, an industry group representing companies involved in nuclear power, says there are some 435 active nuclear power reactors operating in 30 countries.
That number is expected to grow steadily. More than 81 reactors are currently under construction or being upgraded around the world.
China, Russia and South Korea lead the pack with 26, 10 and 5 reactors under construction, respectively, all slated for completion this year.
In all, more than 150 new reactors will be completed by the end of 2016, with another 330 proposals awaiting approval, mostly in China and India. Twenty of those proposals are for reactors in the U.S., another four in the U.K.
Canada is also looking to expand its electricity generating capacity in Ontario, Alberta and New Brunswick, but it’s not clear at the moment whether the needed power will come from nuclear or other sources.
Of Canada’s five nuclear generating facilities, two new reactors are on the books for Ontario’s Darlington station. These new reactors are set to go online in 2018.
Germany swears off nuclear power
Germany is the only industrial power to swear off nuclear energy in the wake of the Fukushima meltdown, pledging to phase out all of its nuclear power plants by 2022.
In a statement made to the IAEA, then-German secretary of state Hans-Joachim Otto announced his country would be filling the void left in Germany’s power grid with renewable sources, while remaining committed to supplying the European market with "secure, affordable energy."
Seven of Germany’s oldest reactors were taken offline for safety reviews immediately after the Fukushima disaster. Those plants, as well as an eighth one that was already shut down for repairs at the time of the Fukushima disaster, will not be restarted, leaving six active reactors in the country.
However, analysts who track commodities like uranium — the key ingredient in releasing nuclear energy — look to the European market as an indication that Germany’s gesture is a long way from freeing the region from nuclear power.
"If you look at the countries bordering Germany, they are all planning to build [nuclear] generators," says Michael Wichterle, a commodities analyst with Versant Partners in Montreal.
"It's kind of ironic."
'You can’t go wrong with uranium.'—Michael Wichterle, commodities trader
The Czech Republic, Poland, Slovakia, Romania and Ukraine each have plans to build new reactors within the next decade. Finland and Sweden to the north also plan to expand their existing nuclear capacity. Wichterle says it's likely that power from these reactors will be sold to nearby markets, including Germany.
"If you look at the economics of it, those plants are being built to fill the void."
The price of uranium also indicates steady demand for nuclear power. Uranium took a nosedive in the weeks following the Fukushima meltdown, falling from a high of $75.50 U.S. per pound in February 2011.
But even a disaster on the scale of Fukushima hasn’t caused the price of uranium to bottom out. Since the meltdown, the contract price has leveled out around $50. The price in June this year averaged about $51, well above the June 2010 average of around $40.
If development of new reactors is any indication, Wichterle says the outlook for the nuclear power industry worldwide remains strong.
As an investor with a long-term horizon, "you can’t go wrong with uranium," he says.